Am I Eligible for Innocent Spouse Relief?

Tax liabilities can create undue burdens, especially when you are not at fault. 

In cases where a spouse or former spouse is responsible for inaccurate reporting or fraudulent activities, innocent taxpayers may find themselves held accountable for unpaid taxes. However, the IRS offers a potential solution known as Innocent Spouse Relief.

What is Innocent Spouse Relief?

Innocent Spouse Relief is a special rule the IRS uses to help taxpayers who filed joint tax returns, but shouldn’t be held responsible for any mistakes or problems on those returns. It’s a way for innocent spouses to be exempt from the taxes, interest, and penalties that were caused by their spouse or ex-spouse’s mistakes. 

Eligibility Criteria

If you want to qualify for Innocent Spouse Relief, you’ll have to meet certain criteria:

Filing Status: If you want to qualify for Innocent Spouse Relief, you’ll need to have filed a joint tax return with your spouse or ex-spouse. The reported amount on that joint return should have been lower than what it should have actually been.

Lack of Knowledge: When you signed your joint return, you should not have known about the tax understatement. You didn’t have any awareness that the tax amount reported was inaccurate.

Unfair Burden: It would be unfair to expect you to be held responsible for the tax understatement, especially when you consider the specific circumstances and how assets and liabilities were divided between you and your spouse or ex-spouse.

The Three Types of Innocent Spouse Relief

The IRS offers three types of Innocent Spouse Relief:

Traditional Innocent Spouse Relief: This relief applies when you can demonstrate that you had no knowledge or reason to know about the understatement of tax on the joint return.

Separation of Liability Relief: With this relief option, your tax understatement would be allocated between you and your spouse (or former spouse). It is based on your individual contributions to the income, deductions, and credits on the joint return.

Equitable Relief: If you don’t meet the requirements for the relief options above, you might still qualify for Equitable Relief. Equitable Relief is a special consideration that’s used in situations where it would be unfair to hold you responsible for the tax understatement. The IRS considers different factors and circumstances to decide if you are eligible for Equitable Relief. 

How Do I Get Innocent Spouse Relief?

If you want to apply for Innocent Spouse Relief, you need to submit an IRS Form 8857. This form is called the Request for Innocent Spouse Relief. You’d also need to give supporting documentation that substantiates your claim. You should provide a detailed explanation of why you believe you qualify for relief.

Navigating Innocent Spouse Relief is difficult. That’s why if you consult with a qualified tax professional who specializes in Innocent Spouse Relief, you can significantly improve your chances of getting a successful claim. A professional can guide you through the process, assist with gathering necessary documentation, and make sure your rights are protected…

A professional like Ben Butterfield. 

Ben Butterfield, CEO and founder of BPB Tax Resolutions, is an accomplished tax professional who specializes in tax services like Innocent Spouse Relief. 

With over 25 years of experience in accounting and finance, Ben is a trusted expert in helping you with your IRS problems. 

He’ll guide you through the eligibility evaluation for Innocent Spouse Relief and find the best solution to your situation. 

Don’t let your tax issues hold you back. Book your risk-free consultation now!