When a taxpayer files a joint return, both spouses are “jointly and individually” responsible for the tax liability on the return. If the IRS cannot collect the tax due from one spouse it will go after the other, whether or not they are still married at the time the collection activity takes place. When one spouse underreports income, claims erroneous or overstated deductions, or does something else that results in an “understatement of tax” there is an opportunity for the other spouse, “the innocent spouse”, to be relieved from the joint debt.
To qualify for innocent spouse relief all of the following conditions must be met:
· You must have filed a joint return that has an understatement of tax;
· The understatement must be due to erroneous items of the spouse;
· You must establish that at the time you signed the joint return you did not know, and had no reason to know, that there was an understatement;
· Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the understatement; and
· You must request innocent spouse relief within 2 years after the date on which the IRS first begins collection activity against you.
According to the IRS, “The revised form will ask more questions initially, but collecting critical information early in the process will mean faster processing of the request. Previously, Form 12510, Questionnaire for the Requesting Spouse, was separate from Form 8857. The redesign will combine and streamline the two forms. The redesigned form will, hopefully, be easier to understand and complete and will help educate taxpayers about the process.”
It is anticipated that the new design will eliminate an estimated 30,000 follow-up letters annually and will result in quicker responses to taxpayers and less cost to the government. The revisions were based on suggestions from an IRS process improvement team led by the Office of Taxpayer Burden Reduction.
For more information check out “Tax Information for Innocent Spouses”.
FYI an “innocent spouse” is different from an “injured spouse”. An injured spouse is one whose refund has been grabbed by the IRS to offset a debt (back taxes, child support, student loans, etc) owed by your spouse – but not by you. Let us say you are married and both you and your spouse work and receive W-2s with federal income tax withheld - and your spouse owes taxes from a return he filed as Single before you were married. If the IRS grabs the full amount of your current joint refund you can claim injured spouse relief, which involves a different set of forms and instructions.