Nobody wants to pay extra money to the IRS. Hence, a majority of married taxpayers chose to file their taxes jointly to take advantage of a high deduction and other tax benefits.
What is Innocent Spouse Relief?
Innocent spouse relief is an IRS relief plan that allows you to avoid paying additional taxes, penalties, and interest if a former or current spouse made an error, underestimated or claimed tax deductions incorrectly while filing tax jointly. This allows the IRS to come after either of the spouse for the full amount of the tax debt, even if the debt or error came from the other partner.
This jointly filed tax makes both of them responsible for the entire tax liability. It is termed as joint and several liabilities, which means that the IRS can proceed with collection action against either one of them rather than just limiting itself to one spouse. To claim for innocent spouse relief IRS, you must fill out and submit Form 8857 before two years from the date the IRS made first attempted to collect the taxes.
What are the other types of relief for married taxpayers?
You may owe tax debts to IRS after you have been legally divorced or your spouse has died. In such cases, you may be eligible for the following two types of reliefs.
1. Separation of Liability Relief –
It is another way to claim an exception from joint and several liabilities when filing a joint return. You will pay the tax amount you are responsible for only if you are legally separated, divorced, or widowed. There must not be any transfer of assets between you and your spouse.
2. Equitable Relief –
This can be claimed only if you are not eligible for innocent spouse relief or separation of liability relief. You can apply for equitable relief if your return was jointly reported but not paid. There must be transfer of assets between you and your spouse.