Because of certain tax benefits, many married couples file a joint tax return. However, there are times when this fling can result in confusion between partners under challenging circumstances.
Generally, filing a joint return means that both spouses are individually responsible for the entire liability – even if they choose to divorce after the fact. However, there are two instances where a spouse may be relieved of this liability if the proper procedures are applied: Innocent Spouse Relief and Injured Spouse Relief. Let’s briefly discuss the qualifications for these in turn.
Innocent Spouse Relief helps you to avoid additional tax you owe if your spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits. All of the following conditions must be met:
- An understatement of tax is created in your joint return that is solely attributable to your spouse’s “erroneous item”
- You can establish that you did not know – and had no reason to know – that there was an understatement of tax
- Considering all the facts and circumstances, it would not be fair to hold you liable for the deficiency
Under these circumstances, you should file Form 8857 Request For Innocent Spouse Relief. This form is not sent with the original tax return. Instead, it is filed after the incident – within certain time limitations that may apply.
On the other hand, you may receive Injured Spouse Relief if you file a joint tax return and all or part of your portion of a refund was – or is expected to be – applied to your spouse’s legally enforceable past due financial obligations. In other words, you must have paid federal income tax or claimed a refundable tax credit, and not be legally obligated to pay the past due amount.
To request injured spouse relief, you must file form 8379 Injured Spouse Allocation, which may be sent along with your original return or within the time period for requesting a refund.