How it works
Joint filers are each liable for the full tax on a joint return. Innocent spouse relief, requested on Form 8857, removes a requesting spouse’s liability for tax, penalties, and interest attributable to the other spouse’s errors. There are three forms: traditional relief (you did not know and had no reason to know), separation of liability (allocating the deficiency between divorced or separated spouses), and equitable relief (fairness, including for underpayments). The IRS must contact the other spouse. Most requests must be filed within two years of the first collection activity against you.
Why it matters
It is the only way to separate joint liabilities without paying them, and the knowledge, benefit, and abuse questions on Form 8857 decide the outcome.
Example
A spouse learns after divorce that her ex-husband omitted 200,000 dollars of business income on their joint returns. With no involvement in the business and no benefit from the omitted income, she requests separation of liability and is relieved of the resulting 60,000 dollar deficiency.
Related: Form 8857. Read more: innocent spouse relief guide.
