Joint Tax Debt? How a Spouse Can Get Relief

Last updated on July 4, 2022

If a married couple files jointly, and a tax debt occurs, a spouse can claim innocence to get relief. Under Innocent Spouse Relief, a spouse must prove they had no knowledge of the understatement of taxes in order to receive relief from the debt. If both spouses had knowledge of the understatement, the IRS may take collection action on both partners.

Tax Debt Relief: Innocent Spouse

When tax returns are filed jointly by married couples, the IRS holds both spouses responsible for the tax liability and its fulfilment. In cases of back taxes too, the IRS holds both spouses responsible for the payment of the debt even if only one spouse is working.

Innocent Spouse removes all liability of paying back taxes from the spouse who qualifies for the program, including penalties and interest.

Innocent Spouse: Qualifying Factors

Innocent Spouse has various qualifying factors that taxpayers must consider before applying for the program. The taxpayers applying for the program must accept that:

• There was an understatement of taxes the innocent spouse did not know about and would have no reason to know about.
• The other spouse is liable for some or all of the understatement.
• Holding the innocent spouse responsible for the actions of the liable spouse is unjust.

A tax professional can assist taxpayers in preparing their case for Innocent Spouse Relief and representing them before the IRS. In most cases, negotiation with the IRS is required, which is handled the professional presenting the case.

Tax Debt Relief: New Rules for Innocent Spouse

The IRS has relaxed some of the restrictions for Innocent Spouse. When the IRS reviews the request, it will not apply the two-year limit to new equitable relief requests or requests that are in the process of being considered. Taxpayers whose equitable relief request was denied by the IRS only because of the two-year limit can reapply. The IRS will not apply the two-year limit in pending litigation involving equitable relief.

Spouses with tax debt should review the requirements of the Innocent Spouse program if they believe they are have reasonable cause as to why they are not responsible for the back tax debt.