IRS Releases Revised Publication for Innocent Spouse Relief

A joint filer who wants relief from responsibility for the tax on a joint return must file a request for innocent spouse relief. This is done by submitting Form 8857, Request for Innocent Spouse Relief. Usually, the request must be made no later than 2 years after the IRS begins collections of the tax owed. However, the new publication reflects an exception to this rule for equitable innocent spouse relief. In line with a change in IRS policy earlier this year, the publication notes that the amount of time to request equitable relief depends on whether you are seeking relief from a balance due, seeking a credit or refund, or both:

• Balance due. Generally, you must file your request within the time period the IRS has to collect the tax. The IRS usually has 10 years from the date the tax liability was assessed to collect the tax; in certain cases, the 10-year period is suspended. The amount of time the suspension is in effect will extend the time the IRS has to collect the tax.
• Credit or refund. Generally, you must file your request within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later. But you may have more time to file if you live in a federally declared disaster area or you are physically or mentally unable to manage your financial affairs.
• Both a balance due and a credit or refund. If you are seeking a refund of amounts you paid and relief from a balance due over and above what you have paid, the time period for credit or refund will apply to any payments you have made. The time period for collection of a balance due amount will apply to any unpaid liability.