Filing a joint tax return with your spouse can have substantial benefits. Filing jointly also puts the tax responsibility on both spouses, even if only one spouse filled out the return or only one spouse earns income. If you're in a tricky tax situation through a fault of your current or former spouse, you may be able to seek relief from the Internal Revenue Service (IRS).
Filing Joint Tax Returns
Married couples can file joint federal tax returns. The standard deduction is often higher for a couple than for two people filing separately, resulting in a lower tax liability overall. Married couples can also claim other benefits on tax returns that individuals usually can not.
Filing a joint return isn't always beneficial—sometimes, it's not the right choice for a married couple at all. Spouses who want to file jointly should always consider their options first, as they may have a lower tax liability or higher refund by filing separately. Submitting a joint tax return to the IRS also means that you and your spouse have joint and several liability.
What is joint and several liability?
Married couples who choose to file jointly for the tax benefits are jointly and individually responsible for tax, interest, and penalty due to their tax returns. “Several” liability, in this case, refers to “individual” liability. If you and your spouse have filed a joint return but divorced or legally separated afterward, you are still liable for the tax or interest on the tax debt that accrues.
Relief from joint and several liability
It's possible to get relief from a tax burden if you're not the spouse who caused the tax liability in the first place. If the IRS uses your refund to help pay off your spouse's tax debt or you owe tax, penalties, and interest due to improperly reported income, you might be eligible to get relief from the IRS. The two routes you can take are filing for innocent spouse status or injured spouse status.
Innocent Spouse vs. Injured Spouse
An innocent spouse seeks freedom from their joint and several liability. An injured spouse seeks allocation of a refund because the IRS used the refund to pay off a tax debt of a current or former spouse. If you aren't responsible for the tax burden you're facing and would like the IRS not to hold you accountable, you file for innocent spouse status. If the IRS was supposed to give you a tax refund but instead applied it against the separate past-due federal tax, state tax, child or spousal support, or federal non-tax debt of your spouse, then you file for injured spouse status.
Innocent Spouse Status
If you want to file innocent spouse status, you must claim that your spouse made a filing error on your joint return without your knowledge. The error could be incorrectly reported income or inaccurate deduction, or credit claims. In addition to proving that the error is “solely attributable” to your spouse, you must also show that holding you liable for the tax burden would be unfair (if your spouse earns more income than you, for example). The innocent spouse relief form is Form 8857.
You can file for innocent spouse status while you're still married, but most couples are either divorced or separated when one person requests this status from the IRS.
Three types of innocent spouse relief
- Innocent spouse relief: You're not held liable for the additional tax you owe if your current or former spouse failed to report income or improperly claimed credits and deductions.
- Separation of liability relief: This relief allows a separate allocation of tax liability (instead of joint) for former spouses or legally separated spouses.
- Equitable relief: If you don't qualify for innocent spouse relief or separation of liability relief, you may get equitable relief.
Will my ex-spouse see my innocent spouse claim?
The IRS is obligated to report your innocent spouse claim to your current or former spouse and allow them the chance to participate in the process. If you don't want your former spouse to know you've filed an innocent spouse claim, you should explore other options for alleviating your tax liability first.
How long does the process take?
By the time the IRS has processed your request and contacted your spouse, it could be six months before the agency decides.
Injured Spouse Status
You may qualify as an injured spouse if you filed a joint federal tax return and the IRS applied your portion of the overpayment to your spouse's tax debt or other federal debts (such as student loans). If the IRS is planning to take your portion of the refund for this purpose, you will receive a Notice of Offset letter. You have three years from the due date of the original return or two years from the date you paid the tax to file for injured spouse status. You file with Form 8379.
Can I Get Innocent Spouse Status in California?
The state of California has an innocent spouse status similar to that of the IRS. You must submit your claim to the Franchise Tax Board (FTB) stating that there's no way you could've known about the tax nonpayment or filing return error and that you should not be responsible for it.
Innocent spouses can also obtain a court order in California to modify the tax debt and contractually shift responsibility to the spouse who earned the income or was responsible for the tax. If you seek this tax liability relief during divorce proceedings—as part of the Marital Settlement Agreement—the relief is automatically granted. If you seek it outside of divorce proceedings, it's up to the FTB to grant you relief or not.
Seeking Innocent or Injured Spouse Tax Relief
If you have an undue tax burden and you're wondering if you qualify for relief as an innocent or injured spouse, an experienced tax professional can help. Contact a California Tax Attorney to set up a consultation and discuss your IRS and California tax relief options.