The Joint Liability Problem
Joint filers become jointly and severally liable for the entire tax liability, including amounts later determined owed. The IRS can collect the full amount from either spouse regardless of who earned the income, prepared the return, or caused the error. This applies even after divorce.
Three Types of Relief
Classic Innocent Spouse Relief (IRC 6015(b))
Applies when there is an understatement due to the other spouse's erroneous items. Must show: understatement attributable to other spouse, no knowledge or reason to know, and inequitable to hold liable.
Separation of Liability (IRC 6015(c))
Available to divorced, separated, or living-apart-12-months spouses. Allocates the deficiency between spouses based on who caused the erroneous items. Requesting spouse is liable only for their portion.
Equitable Relief (IRC 6015(f))
The broadest form. IRS considers marital status, economic hardship, knowledge, legal obligation of other spouse, significant benefit, compliance history, and health at time of signing. Available for both understatements and underpayments.
The Application
File Form 8857. Detailed questions about involvement in return preparation, knowledge of finances, marital relationship, and circumstances. The IRS notifies the other spouse and gives opportunity to respond. Review takes months to over a year. Denial can be appealed to Appeals or Tax Court within 90 days.
The law recognizes that not every spouse who signs a joint return has equal knowledge of or responsibility for what is on it. Innocent spouse relief separates the truly innocent from their partner's actions.