What is an Innocent Spouse?

The Innocent Spouse appeal is one in which one spouse who has been assessed delinquent taxes claims that, although she signed a joint return, she should not be held liable for the taxes because she did not know about the money that gave rise to the delinquent taxes.

 

 

Most husbands and wives file joint returns, but usually only one is really involved in gathering the information and filling out the return.  However, when both sign the return they are jointly and severally liable for the entire tax.

This situation most often occurs when there is an audit because the IRS has learned that one spouse made money that he or she did not report.  To make an Innocent Spouse claim, several factors must be present: (a) they filed a joint return, (b) additional income was found through audit or otherwise that was not reported, (c) the “innocent” spouse claims he did not know about the money , and (d) claims he did not get benefit from it.  The “innocent” spouse must convince the IRS of all these factors before getting relief from the tax.  Usually the hardest one to prove is that no benefit was gained by the innocent spouse.

A different problem arises when there is a divorce situation but no unreported income is involved.  One spouse will claim the other made all the money or filled out the return without his/her knowledge.  However, absent special circumstances, both parties are still equally liable and the IRS can collect the full amount from either.  This is not really an Innocent Spouse situation.