Innocent Spouse Tax Relief, Separation of Liability and Equitable Relief – Explore Your Options and Recourse

Often, married taxpayers choose to file a joint tax return because of certain benefits this filing status allows. Unfortunately, there are times because of divorce, separation, or other circumstances that one spouse becomes liable for taxes, interest, or penalties due to improper filing or reporting of their partner.

If you are in need of advice on the best way to obtain tax relief, we welcome you to contact our tax firm for a free tax consultation at 1-877-78-TAXES [1-877-788-2937].


You need to know that when filing jointly, each taxpayer is legally responsible for the entire liability. It’s important to note that both spouses are generally held responsible for all the tax due even if one spouse earned all the income or claimed improper deductions or credits.

Both spouses are held accountable for the payments, even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns; however, in some cases, a spouse can get relief from joint and several liability.

This is where you need a tax relief expert to assist you. Since there are three types of relief, your tax specialist can help you determine the best option to choose. The following is a snapshot of the types of relief and time limits attached to each:

Innocent Spouse Tax Relief – if your spouse or former spouse failed to report income, reported income improperly or claimed improper deductions or credits, this provides relief from additional tax. You must request this type of relief within 2 years of the date the IRS first attempted to collect the tax from you.

Separation of Liability Relief provides for the allocation of additional tax owed between you and your former spouse or your current spouse from whom you are separated because an item was not reported properly on a joint return. The tax allocated to you is the amount for which you are responsible. This type of relief must be requested within 2 years of the first date the IRS attempted to collect the tax from you.

Equitable Relief may apply when you do not qualify for innocent spouse relief or separation of liability relief for something not reported properly on a joint return and generally attributable to your spouse. You may also qualify for equitable relief if the correct amount of tax was reported on your joint return but the tax remains unpaid. In order to be considered for this option, you must request relief during the time the IRS has to collect the tax from you.

Refund requests for taxes paid must be made within the time period for seeking a refund, which is generally three years after the date the return is filed or two years following the payment of the tax, whichever is later.

We can assess your particular situation and ensure that you meet the IRS guidelines to qualify for “innocent spouse relief,” “separation of liability relief,” or “equitable relief.”

To be considered for “innocent spouse relief” you must meet all of the following points:

• You filed a joint return that has an understatement of tax (deficiency) that is solely attributable to your spouse’s erroneous item. An “erroneous item” includes income received by your spouse but which was omitted from the joint return. Deductions, credits, and property basis are also erroneous items if they are incorrectly reported on the joint return;
• You establish that at the time you signed the joint return you did not know, and had no reason to know, that there was an understatement of tax; and
• Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understatement of tax
To qualify for “separation of liability relief” you must have filed a joint return and must meet one of the following requirements at the time you request relief:
• You are legally separated or divorced from the spouse with whom you filed the joint return
• You are widowed or
• You have not been 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 you’re your formal Request for Innocent Spouse Relief
If you had actual knowledge of the item that gave rise to the understatement of tax, at the time you signed the joint return, you may not qualify for separation of liability relief. However, reviewing your individual circumstance will clarify whether or not that applies to your situation.

You may qualify for “equitable relief.” To qualify for equitable relief you must establish that, under all the facts and circumstances, it would be unfair to hold you liable for the understatement or underpayment of tax. There are additional requirements to file for this exception as well.

If you request relief from joint and several liability, the IRS is required to notify the spouse with whom you filed the joint return of your request and allow him or her to provide information for consideration regarding your claim.

If you lived in one of the community property states including: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin and filed as “married filing separately” rather than “married filing jointly,” you might still qualify for relief.

The best way to determine the appropriate relief for your situation is to set up a consultation to discuss your specific circumstances.

If you are in need of advice on the best way to obtain tax relief, we welcome you to contact our tax firm for a free tax consultation at 1-877-78-TAXES [1-877-788-2937].

Mike Habib, EA is a tax resolution firm, Endorsed Local Provider by Dave Ramsey, that helps individual and business taxpayers in tax controversy matters. We have the highest BBB rating of “A +”.