The IRS announced rules that should prevent the divorced and legally
separated
from being held accountable if their former spouse cheated on taxes,
didn't
pay or made mistakes calculating their bill.
These innocent-spouse rules provide relief for
spouses who can establish they didn't know taxes were not being paid
and for scenarios with divorced or separated couples where it is clear
the other spouse was responsible for the tax debt.
It is now possible to apply for three distinct
types of relief: innocent spouse relief, separation of liability and
equitable relief.
- Innocent spouse relief can be sought when you
did not know and had no reason to know of errors on a joint return.
- Sorting out liability does not require total
innocence; you will be responsible only for any portion that you forgot
to report. That's far easier to claim.
- Equitable relief comes into play if you don't
qualify for either of the above.
You can qualify for relief from an understatement
of tax or underpayment if, when all the facts are taken into account,
it is clear that it would be unfair to hold you liable. To request
relief, you must
file
form 8857 , Request for Innocent Spouse Relief.
You must file the form no later than two years
after the IRS first tried to collect the tax from you. After you file,
you can ask the U.S. tax court to review your request if you disagree
with the IRS decision, or if the IRS has not sent you a notice of their
decision within six months after you filed the form.
