The Innocent Spouse Relief is a relief that is provided by the IRS to a taxpayer who filed a joint return with an ex-spouse and a tax liability is outstanding from the return. For one to qualify, these outstanding taxes must be due to the ex-spouse and it would be unfair to have the taxes collected from the applicant. To qualify for the relief, one needs to apply to the IRS by filing Form 8857. The Innocent Spouse Relief is the most common relief that is sort after by taxpayers from the IRS. Every year, about 50,000 taxpayers apply for this relief with some being unsuccessful. There are various factors that the IRS considers before approving an application for the relief. Some of these factors are explained below:
- Not married to spouse – To qualify for the innocent Spouse Relief, one needs to have been legally separated or divorced to the spouse in question.
- Not responsible – The taxes that are due and that one is seeking to be waived under the Innocent Spouse Relief need to have been fully owed by the ex-spouse. The taxes may have arisen from incomes that he or she made alone but did not disclose such as incomes from gambling or self employment. If the incomes are from an asset or investment, the asset must have been in the name of the ex-spouse.
- Believe taxes were paid – If the taxes in contention were due to unpaid taxes, the applicant reasonably believed that his or her ex-spouse paid all taxes that were due within the required time.
- Unaware of audit item – If the taxes due were a result of an audit; the applicant was not aware of the items that were understated or that were not disclosed in the tax return.
- Did not benefit – The person who is applying for the relief did not benefit from the unpaid taxes above the normal financial support.
- Financial hardship – The IRS may approve an application for an Innocent Spouse Relief if paying of the taxes by the innocent spouse would have the applicant in a financial hardship.
- Abusive marriage – The IRS does approve the relief for applicants who were in abusive marriages even if the spouse was aware of the items in question or that taxes were unpaid.
- Financial control – The IRS may also approve an application if the applicant had no control of the finances or taxes in the marriage relationship and that the ex-spouse fully controlled the financial matters in the relationship (for example in the case of a housewife).
According to the IRS, no single requirement fully approves one of the relief. On the other hand, if the applicant does not qualify under a given requirement, they may still qualify for the relief. The IRS examines each application and approves relief on a case by case basis.