The tax law provides relief to certain married or previously married individuals under certain circumstances. There are two types of relief available from the IRS: innocent spouse relief and injured spouse relief. Here are the differences to note.
Filing jointly with your spouse makes you jointly and severally liable for the tax on the joint return, plus any interest and penalties. However, under special conditions, you can be relieved of this liability by claiming to be an innocent spouse. There are three types of innocent spouse relief:
To claim any type of innocent spouse relief, you must file Form 8857, Request for Innocent Spouse Relief. The claim must be made within 2 years of the date that the IRS first attempted collection from you.
If you are married and the IRS has applied a refund from your joint return to cover your spouse’s liability, you can file for injured spouse relief to recoup your share of the refund. Also, if you are filing a joint return now and you’re not responsible for the debts that your spouse has outstanding and you are entitled to a portion of the refund, you may request your portion of the refund. If you can prove you are an injured spouse, the IRS will allocate the tax refund and give you your share rather than applying it to your spouse’s liability or debt.
Liabilities for which the IRS can use a tax refund, in addition to outstanding federal taxes, include:
To claim injured spouse relief, you must file Form 8370, Injured Spouse Allocation. If you are filing to recoup a previously applied refund, send Form 8370 by itself. If you are filing for relief the current year, include Form 8370 with your return. You can still file your return electronically, but the IRS says to expect about 11 weeks for the matter to be resolved. If you file a paper return, expect to wait 14 weeks for your share of the refund.
If you live in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin, special rules apply for both innocent spouse and injured spouse relief.
New data on returns filed during the government’s 2010 fiscal year reveal some interesting facts:
Source: Statistics of Income Bulletin, Fall 2012View all factoids