If your spouse owes money to the IRS, you may be worried that the IRS can automatically make you pay the debt.
The answer depends on several factors:
- Did the tax debt arise before or during your marriage?
- Did you file a joint tax return?
- Was income omitted or a deduction claimed incorrectly?
- Did you know—or have reason to know—about the error?
- Do you live in a community-property state such as Texas?
- Has your joint refund been taken to pay a debt belonging only to your spouse?
Marriage alone does not necessarily make you personally responsible for your spouse’s federal tax debt. However, filing a joint tax return can create a very different situation.
What Happens When Married Couples File Jointly?
When spouses file a joint federal income tax return, they generally become jointly and severally liable for the entire tax liability.
This means the IRS can attempt to collect the full balance from either spouse. The IRS is not limited to collecting half from each person.
This generally remains true even if:
- Your spouse earned all the income that created the tax.
- Your spouse handled the family’s finances.
- You later separated or divorced.
- Your divorce decree says your former spouse must pay the taxes.
- Your spouse promised that you would not be responsible.
A divorce agreement may give you certain rights against your former spouse, but it does not ordinarily prevent the IRS from collecting a joint tax liability from you.
However, taxpayers who believe it would be unfair to hold them responsible may qualify for innocent spouse relief.
What Is Innocent Spouse Relief?
Innocent spouse relief may remove your responsibility for some or all of the additional tax, penalties and interest resulting from errors made by your spouse or former spouse on a joint tax return.
Common errors include:
- Unreported self-employment or business income
- Income omitted from Forms W-2 or 1099
- Inflated business expenses
- Improper deductions
- Incorrect tax credits
- Incorrect asset values or cost basis
For example, suppose your spouse operated a business and failed to report a significant amount of its income. You signed a joint return without knowing about the omitted income. The IRS later audits the return and assesses additional tax, penalties and interest.
Depending on the circumstances, innocent spouse relief could potentially protect you from responsibility for some or all of that assessment.
Relief is not automatic. The IRS evaluates the complete facts and circumstances of each case.
The Three Principal Forms of Spouse Relief
The term “innocent spouse relief” is frequently used to describe several related forms of relief.
1. Traditional Innocent Spouse Relief
Traditional innocent spouse relief generally applies when a joint return understated the correct tax because of an erroneous item attributable to your spouse.
You generally must establish that:
- You filed a joint return.
- The return understated the correct amount of tax.
- The understatement resulted from your spouse’s erroneous item.
- When you signed the return, you did not know and had no reason to know about the understatement.
- Considering the circumstances, it would be unfair to hold you responsible.
Your education, financial experience, involvement in household finances, the nature of the error and whether the return contained unusual items can all affect what the IRS believes you should have known.
2. Separation of Liability Relief
Separation of liability relief may allocate an understated tax between you and your former spouse.
This relief may be available if you are:
- Divorced or widowed
- Legally separated
- Not a member of the same household as your spouse for the required period
Instead of automatically removing the entire liability, the IRS allocates the additional tax based on which spouse was responsible for the income or erroneous item.
Actual knowledge of the error can prevent this form of relief, although special rules may apply in cases involving abuse or coercion.
3. Equitable Relief
Equitable relief may be available when you do not qualify under the other provisions but it would still be unfair to hold you responsible.
Unlike traditional innocent spouse relief, equitable relief can potentially apply to an underpayment shown on the original return.
An understatement means the return reported less tax than should have been reported. An underpayment means the correct tax may have been reported, but it was not paid.
The IRS may consider factors such as:
- Your current marital status
- Whether paying the debt would create economic hardship
- Which spouse created the tax liability
- Whether you knew or had reason to know the tax would not be paid
- Whether your former spouse had a legal obligation to pay it
- Whether you significantly benefited from the unpaid tax
- Whether you have complied with your tax obligations since then
- Whether you experienced abuse or financial control
No single factor necessarily determines the outcome.
What If You Signed the Return Without Reading It?
Signing a joint return without reviewing it does not automatically qualify you for relief.
Taxpayers are normally expected to review a return before signing it. The IRS may examine whether a reasonable person in your position should have questioned the income, deductions or lifestyle reflected on the return.
However, signing without a detailed review does not automatically disqualify you either. The IRS should consider your involvement in the finances, access to records, education, health, financial experience and any deception or abuse by your spouse.
The critical question is often not simply whether you actually knew about the problem, but whether you had reason to know about it.
Special Considerations for Abuse or Financial Control
The IRS recognizes that a spouse may sign a return despite knowing something was wrong because of fear, coercion or domestic abuse.
Abuse is not limited to physical violence. Depending on the circumstances, it may include psychological, emotional or financial control.
A taxpayer may still qualify for relief when:
- The spouse controlled all financial information.
- The taxpayer was prevented from reviewing records.
- The spouse threatened or pressured the taxpayer into signing.
- The taxpayer was afraid to question items on the return.
These cases require careful documentation and a clear explanation of the relationship and financial circumstances.
How Do You Request Innocent Spouse Relief?
A taxpayer generally requests relief by filing Form 8857, Request for Innocent Spouse Relief.
You do not have to determine which specific type of relief applies before filing. The IRS considers the available forms of relief based on the information provided.
The request should include a detailed, credible explanation supported by relevant documents. Depending on the case, useful evidence may include:
- Divorce or separation agreements
- Bank and credit-card records
- Business records
- Tax returns and IRS transcripts
- Communications between the spouses
- Evidence showing who controlled the finances
- Medical, counseling or court records when relevant
- Documentation of your present financial condition
The IRS will ordinarily notify your spouse or former spouse that you requested relief and allow that person an opportunity to respond. The IRS will not disclose certain protected personal information, such as your current address, but applicants should understand that the other spouse will generally become involved in the process.
Deadlines can differ depending on the type of relief and whether you are seeking relief from collection or a refund. You should act promptly after receiving an IRS audit notice, collection letter or other notice concerning the liability. The IRS recommends filing Form 8857 as soon as you become aware of a tax liability that you believe belongs to your spouse or former spouse.
Innocent Spouse vs. Injured Spouse
These terms sound similar but address two different problems.
Innocent spouse relief addresses whether you should remain legally responsible for taxes connected to a joint return.
Injured spouse relief concerns a joint refund that was taken and applied to a separate debt belonging only to your spouse.
For example, suppose your spouse owed federal taxes from before your marriage. You later file a joint return, and the IRS applies the entire refund to your spouse’s old debt. You may be able to recover your portion of that refund by filing Form 8379, Injured Spouse Allocation.
Injured spouse relief does not eliminate a joint tax liability. It only determines whether part of a joint refund should be returned to the spouse who was not legally responsible for the separate debt.
What If the Tax Debt Existed Before the Marriage?
Getting married does not ordinarily make you personally liable for federal income tax debt your spouse incurred before your marriage.
The debt can nevertheless affect you indirectly.
For example:
- A joint tax refund may be applied to your spouse’s old debt.
- An IRS levy against a jointly held account may require you to establish which funds belong to you.
- Federal and state property laws may affect jointly owned assets.
- Community-property laws may complicate the treatment of income and property.
Before filing jointly with someone who already owes the IRS, you should understand the possible effect on your refund and finances.
Community-Property States Can Complicate the Analysis
Texas is a community-property state. Other community-property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Washington and Wisconsin.
Community-property rules may affect:
- How income and withholding are allocated
- How a joint refund is divided
- The ownership of wages, bank accounts and other property
- Which property the IRS may reach for one spouse’s separate tax debt
Living in a community-property state does not necessarily make you personally liable for your spouse’s separate federal tax debt. It can, however, allow the debt to affect income or property that you considered partly yours.
Certain taxpayers who did not file joint returns may also seek relief from liability arising from community income.
Do Not Assume You Are Automatically Protected—or Automatically Liable
Spouse-related tax problems are highly dependent on the facts.
Before filing another joint return, responding to the IRS or agreeing to pay a tax debt, determine:
- Which tax years are involved?
- Were the returns filed jointly or separately?
- Was the tax reported but unpaid, or assessed later?
- Which spouse earned the income or claimed the deduction?
- What did each spouse know when the return was signed?
- Has the IRS started collection activity?
- Could community-property laws affect the result?
- Has a deadline for requesting relief already begun?
An innocent spouse case is not merely a form-filing exercise. The facts, supporting documentation and presentation of the taxpayer’s circumstances can have a significant effect on the outcome.
If you or your spouse owes more than $50,000 to the IRS and you need help determining who is responsible or evaluating your resolution options, contact Bob Jablonsky and Associates to schedule a consultation.
Schedule a consultation: https://jablonskytaxrelief.com/contact/
This article provides general educational information and is not individualized tax or legal advice.
Official IRS resources: Innocent Spouse Relief, Form 8857, Publication 971, and Injured Spouse Rel
