Joint Taxes Filed? Divorcing or Not…Are You Sure You Are “Innocent”?

Michael C. Craven

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Divorce / Separation Lawyer

Contributor Level 11

Posted about 3 years ago. 2 helpful votes

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Most Americans recently filed their income tax returns. Did you carefully look over the completed forms before you signed? If you plan to divorce this is especially important. When married couples file joint returns, the law holds both spouses liable for the taxes, interest and penalties - even when one spouse may not have been aware of the their spouse's misreporting of income or expenses. In certain situations, the IRS provides an out for taxpayers. This is commonly referred to as the "innocent spouse rules". Although the tax code does not set a time limit for asking for relief under the innocent spouse rules, IRS regulations require requests for protection to be made within two years from the date the IRS makes its first attempt to collect. The time limit is especially troubling in situations of divorcing spouses. Senate Finance Committee Chairman Max Baucus, along with Senators Tom Harkin and Sherrod Brown, said in an April 18, 2011 letter to the Commissioner of the IRS, that the two year limitation denies relief to innocent spouses who are "unaware of the IRS collection activities because of intimidation or deception by their spouse." House of Representatives' Democrats sent a letter to the IRS Commissioner claiming that each year 50,000 people seek relief under the innocent spouse rules and 2,000 of them are denied because of the two year limitation. There may be good news for taxpayers on the horizon, whether married or divorcing. The senators' letter to the IRS requests that the two year regulation be reviewed and amended to withdraw the limitation. The senators argue that "it appears that the two-year rule has been running counter to the spirit of the equitable relief provision as a 'safety-valve' for innocent spouses that takes into account all the facts and circumstances of each case,". In order to file a claim for innocent spouse relief, IRS Form 8857 must be filed. The specifics can be read in IRS Publication 971. Until the time limits are extended, if you are an "innocent spouse", do not delay filing your request for relief.

Additional Resources

IRS Publication 971

IRS Form 8857

Senators' letter to IRS

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