Married couples commonly file joint IRS tax returns, which can certainly help simplify your finances as a couple. But if you divorce, you may end up saddled with your former spouse’s joint IRS tax debt. If you’re in this situation, don’t panic. The IRS offers several avenues to seek relief from your ex’s outstanding IRS tax liability after a divorce.
When you file a joint return with your spouse, you’re accepting joint and several liability, which gives the IRS the right to hold either party responsible for the entire tax debt. This holds even if you have a divorce decree that assigns tax responsibility to one person.
If the IRS is coming after you for your spouse’s outstanding taxes after a divorce, you can file Form 8857, Request for Innocent Spouse Relief. This IRS form offers several options that can relieve you of tax debt on a joint return.
Relief from Tax Liability on a Joint Return
When you file IRS Form 8857, the IRS can grant you tax relief via several avenues:
- Separation of liability relief. Through separation of liability relief, the IRS will recalculate a joint return as if the two parties had filed separately. Each person is then responsible for taxes based solely on their own income and deductions, as long as you didn’t have actual knowledge of your ex’s error. To qualify for separation-of-liability relief, you and your spouse must be divorced, legally separated, or living apart for at least 12 months.
- Innocent spouse relief. Innocent spouse relief relieves you of the other person’s tax understatement if you had no knowledge of the miscalculation. You must prove you didn’t know about, or have reason to know about, the error.
- Equitable relief. If you don’t qualify for separation of liability relief or innocent spouse relief, you may still qualify for equitable relief. The IRS will consider factors such as economic hardship, whether you made a good-faith effort to comply with tax laws, whether you knew about or had reason to know about your spouse’s understatement, and your physical and mental health.
To apply for any of these types of relief, you only need to file Form 8857. You don’t have to figure out which option best suits your situation. You just provide all the information to the IRS, and they’ll evaluate your case and determine whether you’re eligible for any of these forms of relief.
Highland Tax Group Can Help You Seek IRS Tax Relief
The experts at Highland Tax Group can help you apply for relief from tax liability stemming from a joint return. We can give you the best chance of resolving your IRS debt favorably.