Innocent Spouse Relief

Innocent Spouse Relief FAQs

Before you file for an IRS Innocent Spouse Relief, let’s consider some frequently asked questions

What is the IRS definition of actual knowledge?

To have “actual knowledge” means that you actually knew about the error committed by your spouse. This nullifies your qualification for innocent spouse relief and both of you are still held liable.

Is there a deadline or a time limit for the filing of Innocent Spouse Relief?

From the day the IRS first tried to collect tax from you,you have a period of two years for the filing of innocent spouse relief. There are exceptions as seen in the following. Should you be applying for equitable relief related to your tax debt, there is a 10-year period given from the date the tax liability was assessed. Under the equitable relief program, if you are applying for credit or a refund, you have until three years after the date of assessment or two years after payment was made will be granted.

What is the IRS definition of “reason to know”?

If the IRS believes that it was reasonable for you to know about the erring issue, then that constitutes a “reason to know.” Even if you only had an inkling about relatable facts or pertinent information, this causes the IRS to believe that you had that reason to know about the case. This disqualifies you from innocent spouse relief due to this situation.

To be considered as members of the same household, what does the IRS mean by that?

Qualification for other types of relief requires you must not be members of the same household. If you and your former spouse are living apart, then it means you don’t live in the same house. But, if you still have romantic links or there is a likelihood of reconciliation, this status will be considered as being members of the same household by the IRS.

What can be considered as erroneous items?

Unreported income, incorrect deductions including inaccurate credits, misrepresentation of cost basis for capital gains or losses can be deemed as erroneous items.

Will the IRS contact my former spouse?

If you file for innocent spouse relief, the IRS will contact your former spouse and give him or her the option to participate in the process. There are no exceptions to this rule, even if you were a victim of abuse.

For innocent spouse relief, what forms do I need to fill out?

Submit IRS Form 8857 for innocent spouse relief. In case of spousal abuse, please submit a letter to document such. Other letters with additional details may be submitted also. These correspondences clarify your present requirements seeking relief.

What is the meaning of “understatement of tax?”

You owe an assessed amount, but you place in your return a lesser amount, that quantifies as an understatement of tax. The filing for innocent spouse relief can be submitted based on this.

What can be considered as an underpayment of tax?

Failing to remit full payment for the total tax amount on the return is correct is considered an underpayment of tax.

When an Offer in Compromise has been approved, can I still apply for Innocent Spouse Relief?

Because there was an agreement reached through an offer in compromise, this nullifies your seeking innocent spouse relief.

What are the number of years covered by my innocent spouse relief filing?

Three years are covered by the filing for innocent spouse relief. More than that, submit a separate IRS Form 8857 to be granted additional years.


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