Innocent Spouse

Relief from Joint and Several Liability § 6015

Married taxpayers who file a joint return under  § 6013 are jointly and severally liable for any tax, interest and penalties due as shown on the return and also any additional tax liability the IRS determines to be due. § 6013(d)(3). Relief from joint and several liability may be available under IRC § 6015.  If it is established that the taxpayer signed a joint return under duress, then a joint return has not been filed.  In this situation, there is no joint and several liability; however, the taxpayer may have to file a separate return for the year. Even if the taxpayers later divorce or if the other spouse earned all the income joint and several liability exists. When relief is requested, Form 8857 must be filed with a brief that addresses the requirements for relief. Relief may be requested during any state if a tax controversy, including pre-assessment and collections as set forth in the  statute and Treasury pronouncements for relief. The rules for relief from joint and several liability should not be confused with the injured spouse rules (discussed elsewhere on this website) that provide for an allocation of an over-payment using Form 8379.

Three forms of relief from joint and several liability are available:

  1. Innocent Spouse Relief – § 6015(b)
  2. Separation of Liability – § 6015(c)
  3. Equitable Relief – § 6015(f)

If relief is requested under § 6015 (b) or (c) and it is denied, the IRS may consider relief under § 6015(f).

Guidance on the administrative appeals rights for the non-requesting spouse is contained in Rev. Proc. 2003-19.

Innocent Spouse Relief § 6015(b)

To receive “innocent spouse relief” the taxpayer must:

  1. File a joint return that had an “understatement” (not an underpayment) of tax due to “erroneous items” of one of the spouses.
  2. Establish that at the time he signed the joint return he did not know, and had no reason to know, that there was an understatement of tax;
  3. Prove that taking into account the facts and circumstances, it would be unfair to hold the taxpayer liable for the understatement of tax, and
  4. Elect relief no later than two years after collection activity begins with respect to the requesting spouse.

An understatement of tax is generally the difference between the total tax liability that should have been shown on the return and the amount that was actually shown on the return. § 6662(d)(2)(A).  This is to be contrasted with an underpayment of tax.  An underpayment of tax is an amount of tax the taxpayer reported on the return but did not pay. For example, a joint 2014 return shows that the taxpayer and his spouse owe $5,000 but the IRS determines that they owe $6,000. They paid $2,000 with the return and in tax withholding. They have an underpayment of $3,000 and an understatement of $1,000.

A taxpayer may qualify for partial relief if, under § 6015(b), at the time she filed her return, she knew or had reason to know that there was an understatement of tax due to her spouse’s erroneous items, but she did not know how large the understatement was. She will be relieved of the understatement to the extent she can prove that she did not know and had no reason to know about a portion of the understatement.  Refunds are permitted under § 6015(b)

The term “erroneous item” is broadly defined as:

  1. Any gross income item received by the spouse that is not reported.
  2. Any improper deduction, credit, or property basis claimed on the return.

The following are examples of erroneous items:

  1. The expense for which the deduction is taken was never paid or incurred. For example, the non-requesting spouse, a cash-basis taxpayer, deducted $10,000 of advertising expenses on Schedule C (Form 1040), but never paid for any advertising.
  2. The expense does not qualify as a deductible expense.  For example, the spouse claimed a deduction of $10,000 for the payment of state fines. Fines are not deductible.
  3. No factual argument can be made to support the deductibility of the expense. For example, the non-requesting spouse claimed $4,000 for security costs related to a home office, but the taxpayer did not have a home office.

When requesting relief both the clients’ knowledge and whether it is unfair to hold the taxpayer liable must be specifically addressed.

Regulation § 1.6015-2(c) states that a requesting spouse has knowledge or reason to know of an understatement if he or she actually knew of the understatement, or if a reasonable person in similar circumstances would have known of the understatement. Facts that should be addressed when determining whether a requesting spouse had reason to know of an understatement include, but are not limited to:

  1. The nature of the erroneous item and the amount of the erroneous item relative to other items;
  2. The couple’s financial situation;
  3. The requesting spouse’s educational background and business experience;
  4. The extent of the requesting spouse’s participation in the activity that resulted in the erroneous item;
  5. Whether the requesting spouse failed to inquire, at or before the time the return was signed, about items on the return or omitted from the return that a reasonable person would question; and
  6. Whether the erroneous item represented a departure from a recurring pattern reflected in prior years’ returns.

The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold the taxpayer responsible for the understatement. Two indicators the IRS may use in deciding that it is unfair to hold the taxpayer responsible and that should be addressed are whether she:

  1. Received any significant benefit from the understatement of tax,
    • Taxpayer can receive significant benefit either directly or indirectly. For example, if the spouse did not report $10,000 of income on the joint return, the taxpayer can benefit directly if the spouse shares that $10,000 with her. She can benefit indirectly from the unreported income if the spouse uses it to pay extraordinary household expenses.
    • The taxpayer does not have to receive a benefit immediately for it to be significant. For example, money the spouse gives the taxpayer several years after he received it or amounts inherited from the spouse (or former spouse) can be a significant benefit.
    • Support payments that the taxpayer receives as a result of a divorce proceeding are not a significant benefit.
  2. Was later divorced from or deserted by the spouse.

Relief By Separation of Liability § 6015(c)

Under this type of relief, a taxpayer may elect allocation of the understated tax (plus interest and penalties) on the joint return between the taxpayer and the spouse (or former spouse). This type of relief is not available for an underpayment of tax, and refunds are not granted. When relief is granted, the understatement of tax allocated to the taxpayer is generally the amount  for which he or she is responsible. Taxpayers may request this type of relief in addition to innocent spouse relief.

To request separation of liability relief, a taxpayer must have filed a joint return, the request for relief must be filed no later than 2 years from when collection activities began with respect to the requesting spouse, and Form 8857 must be filed. The taxpayer also must meet one of the following requirements at the time he or she files the request for relief.

  1. The taxpayer must no longer be married to, or is legally separated from, the spouse with whom the joint return was filed from which relief is requested. Under this rule, a taxpayer is no longer married if he is widowed. Marital status is determined as of the date the election is filed.  See § 7703 for purposes of determining marital status, or
  2. Taxpayer must not be a member of the same household as the spouse with whom the joint return was filed at any time during the 12-month period ending on the date he files Form 8857. Even if the taxpayer meets these two requirements, a request for separation of liability will not be granted in the following situations:
    1. The IRS proves that the taxpayer and her spouse transferred assets to third parties as part of a fraudulent scheme.
    2. The IRS proves that at the time the taxpayer signed the joint return, she had actual knowledge of any items giving rise to the deficiency that were allocable to the spouse. (For a discussion of what constitutes “actual knowledge” Reg. § 1.6015-3(c)(2) and see IRS Publication 971.)
    3. The spouse (or former spouse) transferred property to the taxpayer to avoid tax or the payment of tax.  If the spouse transfers property to the taxpayer for the purpose of avoiding tax or payment of tax, the tax liability allocated to the taxpayer will be increased by the value of the property transferred. A transfer will be presumed to have as its main purpose the avoidance of tax or payment of tax if the transfer is made after the date that is one year before the date on which the IRS sent its first letter of proposed deficiency allowing the taxpayer an opportunity for a meeting in the IRS Appeals Office. This presumption will not apply if the transfer was made under a divorce decree, separate maintenance agreement, or a written instrument incident to such an agreement. The presumption will also not apply if the taxpayer establishes that the transfer did not have as its main purpose the avoidance of tax or payment of tax.

Equitable Relief § 6015(f)

If the taxpayer does not qualify for innocent spouse relief or relief by separation of liability, the taxpayer may still be relieved of joint and several liability if the taxpayer qualifies for equitable relief. If a taxpayer requests equitable relief and it is denied, the IRS may not consider relief under § § 6015 (b) or (c) unless the taxpayer affirmatively elects relief under one or both of those provisions.

The taxpayer may qualify for equitable relief if all of the following conditions are met:

  1. The taxpayer is not eligible for innocent spouse relief, relief by separation of liability, or relief from separate return liability for community income,
  2. The taxpayer and the spouse did not transfer assets to one another as a part of a fraudulent scheme,
  3. The spouse did not transfer assets to the taxpayer for the main purpose of avoiding tax or the payment of tax,
  4. The taxpayer did not file the return with the intent to commit fraud, and
  5. The taxpayer establishes that, taking into account all the facts and circumstances, it would be unfair to hold the taxpayer liable for the tax.

Unlike innocent spouse relief or separation of liability, the taxpayer may obtain equitable relief from both an understatement of tax or an underpayment of tax (defined earlier under Innocent Spouse Relief).

The IRS will consider all of the facts and circumstances in order to determine whether it is unfair to hold the taxpayer responsible for the understatement or underpayment of tax. In doing so, it will examine both positive and negative factors.  When requesting relief under this ground, each of the positive and negative factors should be addressed.

Positive factors
The following are examples of factors that weigh in favor of equitable relief:

  1. Taxpayer is separated (whether legally or not) or divorced from the spouse.
  2. Taxpayer would suffer economic hardship and would not be able to pay reasonable basic living expenses if relief is not granted.
  3. Taxpayer was abused by the other spouse, but the abuse did not amount to duress.
  4. Taxpayer did not know and had no reason to know about the items causing the understatement or that the tax would not be paid
  5. The taxpayer’s spouse or ex-spouse has a legal obligation under a divorce decree or agreement to pay the tax. This will not be a positive factor if the taxpayer knew, or had reason to know, at the time the divorce decree or agreement was entered into, that the spouse would not pay the tax.
  6. The tax for which the taxpayer is requesting relief is attributable to the spouse.

Negative factors
The following are examples of factors that weigh against equitable relief:

  1. Taxpayer will not suffer economic hardship if relief is not granted.
  2. Taxpayer knew, or had reason to know, about the items causing the understatement or that the tax would be unpaid at the time she signed the return.
  3. Taxpayer received a significant benefit from the unpaid tax or items causing the understatement.
  4. Taxpayer has not made a good faith effort to comply with Federal income tax laws for the tax year for which she is requesting relief or the following years.
  5. Taxpayer has a legal obligation under a divorce decree or agreement to pay the tax.
  6. The tax for which taxpayer is requesting relief is attributable to her.

How To Request Relief

To request for Innocent Spouse Relief, Separation of Liability, or Equitable Relief, the IRS requires taxpayer to complete and file IRS Form 8857. Before the form is completed, the Regulations under § 6015 should be reviewed.  They contain several examples illustrating the application of  § 6015. The taxpayer only needs to file one Form 8857, even if she is requesting relief for more than one tax year. The taxpayer must attach a brief (see example below) to Form 8857 explaining why she believes she qualifies for relief . The instructions for Form 8857 contain more information pertaining to the required information.  The Form 8857 and the brief are accompanied by a cover letter addressed to the IRS office in Covington, Kentucky.

The IRS is required to inform the spouse (or former spouse) if taxpayer requests innocent spouse relief or separation of liability and to allow the spouse (or former spouse) to participate in the determination of the amount of relief from liability. You should inform your client that the IRS will attempt to contact her former spouse and advise him of the request for relief. To protect victims of domestic abuse, the IRS has adopted several measures. You should consult the IRS web site in this situation and write on the top of Form 8857 “Potential Domestic Abuse Case.”

Tax Court Review of Request

Denial of a request for relief from joint and several liability may be challenged in the Tax Court. Within 90 days after the IRS mails the taxpayer a negative final determination notice indicating that the IRS denied relief from joint and several liability, the client may petition the U.S. Tax Court to review the denial. This is a statutory period of time that may not be extended. If taxpayer does not file a petition, or files it late, the Tax Court cannot review the denial for relief.

An appeal of an IRS denial of relief may be conducted under the small tax case procedures only if the amount of relief sought, including accrued but unassessed interest and penalties, does not exceed $50,000 on the date the petition is filed. Otherwise, the petition for review of the IRS’ denial of relief must be filed under the regular U.S. Tax Court procedure.

A taxpayer may also file a petition in U.S. Tax Court if she has not received a final determination notice from the IRS within 6 months from the date he or she filed Form 8857.

Innocent spouse relief can also be raised in U.S. Tax Court as a defense when a statutory notice of deficiency has been issued. If the Form 8857 has not previously been prepared, the form, with an original signature, should be included with a brief.

In this situation, the request for relief should be sent to either the appeals officer assigned or Chief Counsel attorney assigned the case.

Refund possibility

Under limited circumstances refunds of tax are permitted if relief from joint and several liability under § 6015 is granted, as follows:

  • A refund is available if relief is granted under § 6015(b) or § 6015(f), subject to the statute of limitations under § 6511;
  • No refunds are available if relief is granted under § 6015(c);

When Request May Be Filed

A request for relief under § 6015(b) and (c), but not (f), must be filed no later than 2 years from when collection activity first begins after July 22, 1998. § 6015(b)(1)(E), (c)(3)(B). Reg. § 6015-5(b) currently provides that the 2 year limit on relief applies to relief requested under § 6015(f); however, first Notice 2011-70 (see link below) and later, Revenue Procedure 2013-34 (linked below) revoke so much of this regulation that limits § 6015(f) claims to a 2-year period.   The period of limitations for submitting an innocent spouse claim under 6015(f) is now limited only by the 10 year statute of limitations under I.R. C. § 6502 and for refunds by the period to submit a claim for refund under I.R.C. § 6511.  Revenue Procedure 2013-34 also updates the rules relating to the weight given to abuse and financial control as a defense

Collection activity

Collection activity for this purpose, begins when the requesting spouse receives:

  • A § 6330 “Notice of Intent to Levy”;
  • A § 6042 offset of an over-payment of the requesting spouse against the liability; or
  • The filing of a claim by the federal government in a court proceeding in which the requesting spouse is a party or which involves property of the requesting spouse.

Collection activity does not include:

  • A § 6212 “Notice of Deficiency”,
  • A § 6303 “Notice and Demand for Payment”, or
  • A § 6320 “Notice of Lien”


Relief at a Glance Chart.pdf
Innocent Spouse Brief.doc
Innocent Spouse Questionnaire.doc
Internal Revenue Service Innocent Spouse Checklist.pdf
Innocent Spouse Relief Request Cover Letter.doc

Information on

Chief Counsel Notice 2013-011, Litigating Cases that Involve Claims for Relief From Joint and Several Liability Under Section 6015
CC-2011-17, Change in Litigating Position on the Two-Year Deadline to Request Section 6015(f) Equitable Relief
IR-2011-80, Two-Year Limit No Longer Applies to Many Innocent Spouse Requests
Notice 2011-70, Equitable Relief under Section 6015(f) – August 8, 2011
Revenue Procedure 2003-61.pdf, New rules for applying for Innocent Spouse Relief (Scroll to page 296)
Chief Counsel Advice.pdf  Grant of Innocent Spouse Relief Does Not ‘Abate’ Tax Liability
IRS Publication 971.pdf, Innocent Spouse Relief
Form 8857.pdf, Request for Innocent Spouse Relief Form
IRS Publication 3212.pdf, Innocent Spouse Relief Brochure
Form 12508.pdf, Innocent Spouse Request for Information
2013 – TNT-115-13, IRS Standard of Review

Internal Revenue Code
IRC §66(c) Treatment of community income: Spouse relieved of liability in certain other cases
IRC §6013 Old section of code relating to Innocent Spouse relief
IRC §6015 Relief from joint and several liability on joint return