J. William Seabrooke CPA P.C.

This article relates to” injured spouse relief” and not “innocent spouse relief.”

You are an injured spouse if your share of the overpayment shown on your joint tax return was, or is expected to be, applied (offset) against your spouse’s legally enforceable past-due federal taxes, state income taxes, child or spousal support payments, or a federal nontax debt, such as a student loan. If you are an injured spouse, you may be entitled to receive a refund of your share of the overpayment. For more information, see Form 8379, Injured Spouse Allocation link at the end of this article.

Innocent Spouse – When you file a joint income tax return, the law makes both you and your spouse responsible for the entire tax liability. This is called joint and several liability. Joint and several liability applies not only to the tax liability you show on the return but also to any additional tax liability the IRS determines to be due, even if the additional tax is due to income, deductions, or credits of your spouse or former spouse. You remain jointly and severally liable for the taxes, and the IRS still can collect from you, even if you later divorce and the divorce decree states that your former spouse will be solely responsible for the tax.

In some cases, a spouse (or former spouse) will be relieved of the tax, interest, and penalties on a joint tax return. Three types of relief are available to married persons who filed joint returns.

 Married persons who did not file joint returns, but who live in community property states, may also qualify for relief. 

Insofar as the provisions for “injured spouse relief” are concerned, it is generally advantageous for married taxpayers to file a joint income tax return.  The “Married Filing Jointly” tax structure provides the lowest income taxes.  However, under certain circumstances, there are legal and financial risks associated with filing these returns, including (but not limited to) the following:

• You may have received poor or incorrect advice from your spouse (husband or wife as appropriate) who actually completed and filed the return, with or without your knowledge;
• You received the wrong information or advice from a friend, tax preparer, CPA, or attorney which you relied on to prepare your tax return.  Regardless of the information source, you are still held 100% accountable for all of the data and information in your tax return;
•  You did not read and fully understand all of the information in your tax return before it was filed.  There were one or more errors in the return, and you have not yet filed an amended tax return for that tax year;
• The person who actually prepared and filed the return intentionally committed a fraud against the U.S. Government or other illegal act (i.e. claimed the First Time Homebuyer tax credit when you did not meet all of the qualifications).

Seven Facts About Injured Spouse Relief 

If you file a joint return and all or part of your refund is applied against your spouses’ past-due federal tax, state income tax, child or spousal support or federal nontax debt, such as a student loan, you may be entitled to injured spouse relief.

Here are seven facts the IRS wants you to know about claiming injured spouse relief:

1. To be considered an injured spouse, you must have made and reported tax payments, such as federal income tax withheld from wages or estimated tax payments, or claimed a refundable tax credit, such as the earned income credit or additional child tax credit on the joint return, and not be legally obligated to pay the past-due amount.
2. If you live in a community property state, special rules apply. For more information about the factors used to determine whether you are subject to community property laws, see IRS Publication 555, Community Property.
3. If you filed a joint return and you’re not responsible for the debt, but you are entitled to a portion of the refund you may request your portion of the refund by filing Form 8379, Injured Spouse Allocation.
4. You may file form 8379 along with your original tax return or your may file it by itself after you are notified of an offset.
5. You can file the Form 8379 electronically. If you file a paper tax return you can include Form 8379 with your return, write “INJURED SPOUSE” at the top left corner of the Form 1040, 1040A, or 1040EZ. IRS will process your allocation request before an offset occurs.
6. If you are filing Form 8379 by itself, it must show both spouses’ social security numbers in the same order as they appeared on your income tax return. You, the “injured” spouse, must sign the form.
7. Do not use Form 8379 if you are claiming innocent spouse relief. Instead, file Form 8857, Request for Innocent Spouse Relief.  This relief from a joint liability applies only in certain limited circumstances. IRS Publication 971, Innocent Spouse Relief, explains who may qualify, and how to request this relief.

For more information about the Injured Spouse and Innocent Spouse Relief, visit www.IRS.gov.

Links:

• Publication 555, Community Property
• Form 8379, Injured Spouse Allocation
• Applying for Innocent Spouse Relief
• Publication 971, Innocent Spouse Relief