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Joint tax troubles: the 3 types of Innocent Spouse Relief

On Behalf of | Jan 19, 2024 | IRS

Imagine you and your spouse file taxes jointly but your spouse does the filing and either makes a significant mistake, fails to report income or claims deductions that are not accurate.

You might think that because you filed jointly, you are liable equally and if your spouse is at fault, you are also at fault, right? Not necessarily.

Sometimes, a spouse might make mistakes in their taxes or state dishonest information on a joint tax return. The Internal Revenue Service (IRS) is aware of the possibility that this might happen (and it does) so it has a special way of protecting the spouse who did not know what was going on: Innocent Spouse Relief.

The 3 types of innocent spouse relief

There is more than one type of innocent spouse relief, depending on what happened and why. The IRS understands these situations happen, and unfortunately, they happen more often than you would expect.

Classic innocent spouse relief

This is the most common type of relief request, and it simply means explaining to the IRS that you did not know what your spouse was up to and asking the IR to not hold you, the innocent spouse, accountable for your spouse’s actions.

Separation of liability

In situations where you and your spouse have your own separate income, deductions and financial landscape and your spouse’s actions are causing tax troubles, you can ask the IRS to be financially separate from your spouse for tax purposes.

Here, the IRS divides up tax responsibilities and makes sure each spouse is liable only for what happened on their financial turf.

Fair or equitable relief

This special provision allows the innocent spouse to ask the IRS for help when they face tax-related unfairness because of the actions of their spouse. When the innocent spouse cannot request help via the other two types of innocent spouse relief, they can apply for this type of relief.

In fair or equitable relief, the innocent spouse applies to the IRS, explaining their situation. The IRS investigates and decides what is fair based on the facts.

If your spouse’s tax adventures leave you with a tax problem on your hands, the IRS has special provisions to help you. You are not alone, and you are not the first spouse to whom this has happened. In fact, it happens more often than you think.

For this reason, it is important for both spouses to be knowledgeable of their tax status and financial landscape, including their annual tax returns, so they can avoid misunderstandings and unnecessary stress between them, including possible trouble with the law.

If you must file for innocent spouse relief, the IRS has a special form that covers all three types of relief.