Innocent Spouse Relief: How to Relieve Unfair Tax Burdens

What if you discovered your spouse or ex fraudulently filed inaccurate tax returns that now leave you unfairly burdened with thousands in IRS tax, penalties and interest debt? As an innocent spouse, you may feel helpless, but there is hope. The IRS extends a lesser-known clause termed “innocent spouse relief” and “injured spouse” designed specifically to shield spouses in these circumstances from unjust tax liability.

Innocent spouse relief provides light at the end of the tunnel, lifting the dark cloud of debt unfairly placed upon your shoulders. This article will walk you through everything you need to know about innocent spouse relief – who qualifies, types of relief offered, how to apply and extra guidance so you can determine if you’re eligible for this vital financial lifeline.

What is innocent spouse relief?

Innocent spouse relief exempts one spouse from paying IRS tax, interest, and penalties resulting from the other spouse’s failure to report income, inaccurate claims, or other errors on previously filed joint returns without the innocent spouse’s knowledge.

Essentially, if your spouse or former spouse misreported income or deductions on past joint tax returns in ways that are now sticking you with the bill, you may qualify for innocent spouse relief to remove that unfair tax burden placed upon you.

It’s a way out for spouses blindsided by shocking tax debts masking spouse deceit. Innocent spouse relief aims to make the situation right by legally releasing you from tax liability you had no hand in creating.

Relief eligibility criteria

To qualify as an innocent spouse, you must meet specific IRS criteria that determines both eligibility and which type of relief applies to your unique situation.

General requirements include:

Joint Tax Return Filing: You must have previously filed joint income tax returns with your now estranged spouse, either married or divorced.
No Knowledge of Errors or Deceit: You must demonstrate a lack of awareness of tax understatements or any financial trickery committed by your former spouse that led to this tax debt stain on your record.
Prove Significant Hardship: You must also prove that forcing you to pay taxes, fines, penalties or interest on debt you didn’t know existed would cause significant financial difficulty and undue hardship.

Overall, you must prove either:

You did not know about inaccuracies on the joint return when signing and filing.

Or,

You placed reasonable reliance on your spouse who handled tax filing, and were unaware of false, fraudulent or mistaken reporting errors made by your spouse that now leave you unfairly holding the bag.

Innocent Spouse Relief Time Limit – Typically, you have two years statue of limitations after the IRS first attempts collection on unpaid joint tax debt to request innocent spouse relief but exceptions exist in special circumstances.

3 types of IRS innocent spouse relief

Seeking innocent spouse relief begins by completing and submitting IRS Form 8857 – “Request for Innocent Spouse Relief” either by mail or electronically, supplying documentation supporting your qualifying situation.

Form 8857 calls for extensive personal and tax data spanning 3 pages requiring:

Identifying information such as current address, SSN, birthdate, etc.
A detailed explanation of why you qualify for innocent spouse relief
Tax transcript access
Information & documentation concerning the joint tax returns involved
Details on separation circumstances, abuse accusations, division of tax refunds
Financial disclosures including current income, ability to pay taxes in dispute

Furthermore, to prove lack of awareness concerning tax inaccuracies committed by your spouse, provide documentation like:

Proof you relied completely on your spouse’s income reporting
Evidence showing you were denied access to tax data
Restraining orders due to physical/mental abuse

What to expect after innocent spouse relief submission

Once submitted, expect a minimum 6 month processing period before the IRS grants or denies innocent spouse relief. However, most cases resolved within 9 months unless disputes arise prolonging the decision.

Within 30 days of receiving your Form 8857 request package, the IRS sends written acknowledgement it arrived and was assigned an agent for review.

Simultaneously, the IRS alerts your estranged spouse or ex concerning the innocent spouse relief request, allowing them opportunity to refute your eligibility claims should discrepancies arise. This enables all involved parties to present their facts and circumstances to uncover the complete truth before an IRS determination concludes.

Throughout the inspection phase, an IRS agent may request additional documentation or arrange phone interviews to clarify details, verify submissions, and determine validity of claims made by both you and your divorced spouse.

Eventually, after careful inspection weighing all evidence gathered, the IRS concludes by either approving your innocent spouse request releasing you from unfair tax obligations, or denying relief should documentation and eligibility ultimately prove unsatisfactory leaving you jointly responsible still.

As a result of the decision, the IRS issues distinct determination letters to both you and your estranged spouse explaining the final ruling and any continuing tax dues expected from each party.

If approved, you also receive written notification specifying terms relief specifics such as which tax years, types taxes, portion liabilities, penalties/interest absolved by innocent spouse status granting freedom from unjust tax burden going forward. Any eligible refunds owed also release at this time.

Innocent spouse relief denial alternatives

If your Form 8857 application for injured spouse relief gets turned down, remain calm. All hope is not lost. Multiple appeal alternatives exist including:

Submit Additional Supporting Documentation – Supply supplemental evidence trying again should something shift favorably requiring an updated review.
Appeal the Ruling – You can formally contest the decision within 90 days under the IRS appeals process seeking redemption by demonstrating clear spouse relief eligibility.
Seek Tax Court Review – As a last resort, bring your innocent spouse relief dispute to tax court allowing a judge to review where additional fact finding could overturn denial by mandate should eligibility merit innocence.

Get professional innocent spouse relief guidance

Attempting innocent spouse relief alone proves difficult, but the law offers hope. Gain clarity on eligibility claiming protection owed by consulting a credentialed tax professional holding extensive IRS navigational experience guiding you through. They help compile necessary documentation making the process smooth plus know appeal routes should the IRS deny relief unfairly.

Tax help for innocent spouses provides the lifeline you need and rightful freedom from fraudulent spousal tax burden. Don’t wait to be crushed by penalties exceeding principle tax obligations. You have options. Take action now by starting the innocent spouse relief process to remove unfair tax liability strangling your financial life. The law protects, as it should.