When a married couple files a joint federal income tax return, they are jointly and severally liable to the IRS for any taxes owed for that year. Typically, when a couple is divorced and they owe taxes to the IRS, the divorce court divides the assets and liabilities among the parties, including the federal tax liabilities. In some cases, the court may order one of the ex-spouses to be responsible for the payment of the joint liabilities. However, this only gives one spouse the right to seek payment by the other spouse in divorce court, it has no effect on the IRS. The IRS, generally, has the right to collect against either spouse no matter what the divorce court says.
Under the innocent spouse procedures, one spouse can be relieved of the joint tax liability and require the IRS to only pursue collection against the other spouse. Innocent spouse relief requires the filing of a Form 8857, Request for Innocent Spouse relief, with the IRS. There are three avenues under which a taxpayer can seek this relief, Section 6015(b), (c), and (f) of the federal tax code.
There are some big differences between these three theories, and some taxpayers will not qualify under any of these theories, while other will qualify under one or more theory. As usual when it comes to taxes, time is of the essence. Under (b) and (c), the taxpayer has two years to seek the relief from the date of the IRS’s first collection action. The two year limit does not apply to (f). Among other factors that come into play in determining which type of relief is applicable are marital status, whether the tax liabilities were from an audit or from a self-assessed return, the taxpayer’s knowledge of the understatement or underpayment, and equitable considerations.
The Wilson Tax Law Group has significant experience in handling innocent spouse requests and appeals in U.S. Tax Court. Call (949) 397-2292 to schedule a consultation.