When you sign a joint return, every purchase, interests, and penalties received by your spouse or ex-spouse may be liable to you as well. You might be held for them because the IRS may collect tax from that return from you even if your spouse is responsible. You can get out of paying it, and one of such method is by filing for the Innocent Spouse Rule.

What is the Innocent Spouse Rule

The Innocent Spouse rule allows a taxpayer to avoid paying a particular tax due to errors made by a spouse on a joint return.  These errors can be incomes that were understated in the Joint Tax returns or inflated deductions.

Available When still Married

The Innocent Spouse rule applies to you and may be available regardless of your marital status.

This means that if you were divorced and had filed a joint tax return with your ex-spouse or if you are still married with your spouse and filing a joint return, it is applicable.

The Criteria for the Innocent Spouse Eligibility

To be eligible for the Innocent Spouse rule, you must meet the following criteria.

• You must have filed a joint return with an understatement of the kind of tax responsibility awarded directly to your spouse.
• You must have had no prior knowledge of the error.
• Once the error is identified the IRS would thus agree that it is fair to give relief to the claimant of this burden.
• The Taxpayers must apply for this relief within two years from IRS first attempt at collection.

Applying for Innocent Spouse Relief.

When applying for this rule, the taxpayer should fill the IRS form 8857. Many taxpayers who are no longer married also apply for the separate election liability, but this requires that the spouse no longer is married due to divorce or death.

Lack of Knowledge Clause.

The biggest problem with this rule applies to decide what will happen from the rules above especially when trying to determine if it is possible that the taxpayer did not know of the error.

Some court rulings have held that the taxpayer who wishes to invoke this rule must have known about the error.

Sometimes, the judge may rule against granting the relief, even when the facts are presented and have shown that the spouse had no idea about it.

In some other cases, the judge may rule that he or she cannot grant it to the spouse until the spouse themselves have looked at the Joint Tax return and try to explain just how they missed it in the first place.

It is even believed by many commentators that the spouses held to the above issues are usually well-educated claimants who were mostly women.  This part of the rule may seem unfair, but it remains the law. A more favorable lack of knowledge requirement may be gotten from the separate liability election.

Equitable Consideration.

The fundamental rule of the Innocent Spouse concept is that you are liable for its relief only after every little detail has been taken into consideration.

The problem with this rule is the fact that different judges have different opinions about this rule and may likely feel that you are still liable to pay the tax especially when you are financially literate before the incident.

The lack of knowledge is only applicable when you are genuinely able to dispute the fact that you had no previous knowledge. If you do, you will be held accountable for the debts, or you might also try other alternatives.