taxmap/pubs/p971-007.htm#TXMP5e6c2e4e"Do You Qualify for Separation of Liability Relief?" taxmap/pubs/p971-007.htm#TXMP08057c31taxmap/pubs/p971-007.htm#TXMP41f40669
This section answers questions commonly asked by taxpayers about innocent spouse relief.
What is joint and several liability?
When you file a joint income tax return, the law makes both you and your spouse responsible for the entire tax liability. This is called joint and several liability. Joint and several liability applies not only to the tax liability you show on the return but also to any additional tax liability the IRS determines to be due, even if the additional tax is due to the income, deductions, or credits of your spouse or former spouse. You remain jointly and severally liable for taxes, and the IRS still can collect from you, even if you later divorce and the divorce decree states that your former spouse will be solely responsible for the tax.
How can I get relief from joint and several liability?
There are three types of relief for filers of joint returns: "innocent spouse relief," "separation of liability relief," and "equitable relief." Each type has different requirements. They are explained separately below.
What are the rules for innocent spouse relief?
To qualify for innocent spouse relief, you must meet all of the following conditions.
- You must have filed a joint return which has an understated tax.
- The understated tax must be due to erroneous items of your spouse (or former spouse).
- You must establish that at the time you signed the joint return, you did not know, and had no reason to know, that there was an understated tax.
- Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the understated tax.
- You must request relief within 2 years after the date on which the IRS first began collection activity against you after July 22, 1998.
What are "erroneous items"?
Erroneous items are any deductions, credits, or bases that are incorrectly stated on the return, and any income that is not properly reported on the return.
What is an "understated tax"?
You have an understated tax if the IRS determined that your total tax should be more than the amount actually shown on your return. For example, you reported total tax on your 2006 return of $2,500. IRS determined in an audit of your 2006 return that the total tax should be $3,000. You have a $500 understated tax.
Will I qualify for innocent spouse relief in any situation where there is an understated tax?
No. There are many situations in which you may owe tax that is related to your spouse, but not be eligible for innocent spouse relief. For example, you and your spouse file a joint return on which you report $10,000 of income and deductions, but you knew that your spouse was not reporting $5,000 of dividends. You are not eligible for innocent spouse relief because you have knowledge of the understated tax.
What are the rules for separation of liability relief?
Under this type of relief, you allocate (separate) the understated tax (plus interest and penalties) on your joint return between you and your spouse. The understated tax allocated to you is generally the amount you are responsible for. To qualify for separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857.
- You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. (Under this rule, you are no longer married if you are widowed.)
- You were not a member of the same household as the spouse with whom you filed the joint return at any time during the 12-month period ending on the date you file Form 8857.
Why would a request for separation of liability relief be denied?
Even if you meet the requirements listed earlier, a request for separation of liability relief will not be granted in the following situations.
- The IRS proves that you and your spouse transferred assets to one another as part of a fraudulent scheme.
- The IRS proves that at the time you signed your joint return, you had actual knowledge of any erroneous items giving rise to the deficiency that are allocable to your spouse.
- Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax.
What are the rules for equitable relief?
Equitable relief is only available if you meet all of the following conditions.
- You do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law.
- You have an understated tax or underpaid tax. See Note later.
- You did not pay the tax. However, see Refunds, earlier, for exceptions.
- The IRS determines that it is unfair to hold you liable for the understated or underpaid tax taking into account all the facts and circumstances.
- You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme.
- Your spouse (or former spouse) did not transfer assets to you for the main purpose of avoiding tax or the payment of tax.
- You did not file or fail to file your return with the intent to commit fraud.
- The income tax liability for which you seek relief is attributable to your spouse (or former spouse) with whom you filed the joint return. For exceptions to this condition, see item (8) under Conditions for Getting Equitable Relief, earlier.
Unlike innocent spouse relief or separation of liability relief, if you qualify for equitable relief, you can also get relief from an underpaid tax. (An underpaid tax is tax that is properly shown on the return, but has not been paid.)
How do state community property laws affect my ability to qualify for relief?
Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Generally, community property laws require you to allocate community income and expenses equally between both spouses. However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability.
How do I request relief?
File Form 8857, Request for Innocent Spouse Relief, to ask the IRS for relief. You must file an additional Form 8857 if you are requesting relief for more than three years.
When should I file Form 8857?
If you are requesting innocent spouse relief, separation of liability relief, or equitable relief, file Form 8857 no later than two years after the date on which the IRS first began collection activities against you after July 22, 1998. If you are requesting relief from liability arising from community property law, see How and When To Request Relief under Community Property Laws, earlier, for when to file Form 8857.
Where should I file Form 8857?
Use the address shown in the instructions for Form 8857.
I am currently undergoing an examination of my return. How do I request innocent spouse relief?
File Form 8857 at the address shown in the instructions for Form 8857. Do not file it with the employee assigned to examine your return.
What if the IRS has given me notice that it will levy my account for the tax liability and I decide to request relief?
Generally, the IRS has 10 years to collect an amount you owe. This is the collection statute of limitations. By law, the IRS is not allowed to collect from you after the 10-year period ends.
If you request relief for any tax year, the IRS cannot collect from you for that year while your request is pending. But interest and penalties continue to accrue. Your request is generally considered pending from the date the IRS receives your Form 8857 until the date your request is resolved. This includes the time the Tax Court is considering your request.
After your case is resolved, the IRS can begin or resume collecting from you. The 10-year period will be increased by the amount of time your request for relief was pending plus 60 days.
What is "injured spouse relief"?
Injured spouse relief is different from innocent spouse relief. When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, child support, spousal support, or federal non-tax debt, such as a student loan, the other spouse may be considered an injured spouse. The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation.
You are considered an injured spouse if:
- You are not legally obligated to pay the past-due amount, and
- You meet any of the following conditions:
- You made and reported tax payments (such as federal income tax withholding or estimated tax payments).
- You had earned income (such as wages, salaries, or self-employment income) and claimed the earned income credit or the additional child tax credit.
- You claimed a refundable tax credit, such as the health coverage tax credit or the refundable credit for prior year minimum tax.
If your residence was in a community property state at any time during the year, you may file Form 8379 even if only item (1) above applies.
You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.taxmap/pubs/p971-007.htm#TXMP2dd55077
The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should.
You can contact the TAS by calling the TAS toll-free case intake line at 1-877-777-4778 or TTY/TDD 1-800-829-4059 to see if you are eligible for assistance. You can also call or write to your local taxpayer advocate, whose phone number and address are listed in your local telephone directory and in Publication 1546, Taxpayer Advocate Service – Your Voice at the IRS. You can file Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), or ask an IRS employee to complete it on your behalf. For more information, go to www.irs.gov/advocate
The TAP listens to taxpayers, identifies taxpayer issues, and makes suggestions for improving IRS services and customer satisfaction. If you have suggestions for improvements, contact the TAP, toll free at 1-888-912-1227 or go to www.improveirs.org
LITCs are independent organizations that provide low income taxpayers with representation in federal tax controversies with the IRS for free or for a nominal charge. The clinics also provide tax education and outreach for taxpayers with limited English proficiency or who speak English as a second language. Publication 4134, Low Income Taxpayer Clinic List, provides information on clinics in your area. It is available at www.irs.gov
or at your local IRS office.
To find out what services are available, get Publication 910, IRS Guide to Free Tax Services. It contains a list of free tax publications and describes other free tax information services, including tax education and assistance programs and a list of TeleTax topics.
Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities.
You can access the IRS website at www.irs.gov
24 hours a day, 7 days a week to:
- E-file your return. Find out about commercial tax preparation and e-file services available free to eligible taxpayers.
- Check the status of your 2007 refund. Click on Where's My Refund. Wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your 2007 tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund.
- Download forms, instructions, and publications.
- Order IRS products online.
- Research your tax questions online.
- Search publications online by topic or keyword.
- View Internal Revenue Bulletins (IRBs) published in the last few years.
- Figure your withholding allowances using the withholding calculator online at www.irs.gov/individuals.
- Determine if Form 6251 must be filed using our Alternative Minimum Tax (AMT) Assistant.
- Sign up to receive local and national tax news by email.
- Get information on starting and operating a small business.
Many services are available by phone.
Evaluating the quality of our telephone services.
- Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and publications, and prior-year forms and instructions. You should receive your order within 10 days.
- Asking tax questions. Call the IRS with your tax questions at 1-800-829-1040.
- Solving problems. You can get face-to-face help solving tax problems every business day in IRS Taxpayer Assistance Centers. An employee can explain IRS letters, request adjustments to your account, or help you set up a payment plan. Call your local Taxpayer Assistance Center for an appointment. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
- TTY/TDD equipment. If you have access to TTY/TDD equipment, call 1-800-829-4059 to ask tax questions or to order forms and publications.
- TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics.
- Refund information. To check the status of your 2007 refund, call 1-800-829-4477 and press 1 for automated refund information or call 1-800-829-1954. Be sure to wait at least 6 weeks from the date you filed your return (3 weeks if you filed electronically). Have your 2007 tax return available because you will need to know your social security number, your filing status, and the exact whole dollar amount of your refund.
To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. One method is for a second IRS representative to listen in on or record random telephone calls. Another is to ask some callers to complete a short survey at the end of the call.
Many products and services are available on a walk-in basis.
- Products. You can walk in to many post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Some IRS offices, libraries, grocery stores, copy centers, city and county government offices, credit unions, and office supply stores have a collection of products available to print from a CD or photocopy from reproducible proofs. Also, some IRS offices and libraries have the Internal Revenue Code, regulations, Internal Revenue Bulletins, and Cumulative Bulletins available for research purposes.
- Services. You can walk in to your local Taxpayer Assistance Center every business day for personal, face-to-face tax help. An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you're more comfortable talking with someone in person, visit your local Taxpayer Assistance Center where you can spread out your records and talk with an IRS representative face-to-face. No appointment is necessary, but if you prefer, you can call your local Center and leave a message requesting an appointment to resolve a tax account issue. A representative will call you back within 2 business days to schedule an in-person appointment at your convenience. To find the number, go to www.irs.gov/localcontacts or look in the phone book under United States Government, Internal Revenue Service.
Mail. You can send your order for forms, instructions, and publications to the address below until May 19, 2008. You should receive a response within 10 days after your request is received.
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
After May 19, 2008, send your request to:
Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61704-6613
CD/DVD for tax products.
You can order Publication 1796, IRS Tax Products CD/DVD, and obtain:
- Current-year forms, instructions, and publications.
- Prior-year forms, instructions, and publications.
- Bonus: Historical Tax Products DVD - Ships with the final release.
- Tax Map: an electronic research tool and finding aid.
- Tax law frequently asked questions.
- Tax Topics from the IRS telephone response system.
- Fill-in, print, and save features for most tax forms.
- Internal Revenue Bulletins.
- Toll-free and email technical support.
- The CD which is released twice during the year.
– The first release will ship the beginning of January 2008.
– The final release will ship the beginning of March 2008.
Purchase the CD/DVD from National Technical Information Service (NTIS) at www.irs.gov/cdorders
for $35 (no handling fee) or call 1-877-CDFORMS (1-877-233-6767) toll free to buy the CD/DVD for $35 (plus a $5 handling fee). Price is subject to change.
CD for small businesses.
Publication 3207, The Small Business Resource Guide CD for 2007, is a must for every small business owner or any taxpayer about to start a business. This year's CD includes:
- Helpful information, such as how to prepare a business plan, find financing for your business, and much more.
- All the business tax forms, instructions, and publications needed to successfully manage a business.
- Tax law changes for 2007.
- Tax Map: an electronic research tool and finding aid.
- Web links to various government agencies, business associations, and IRS organizations.
- "Rate the Product" survey—your opportunity to suggest changes for future editions.
- A site map of the CD to help you navigate the pages of the CD with ease.
- An interactive "Teens in Biz" module that gives practical tips for teens about starting their own business, creating a business plan, and filing taxes.
An updated version of this CD is available each year in early April. You can get a free copy by calling 1-800-829-3676 or by visiting www.irs.gov/smallbiz