Limiting Your Liability for the Return

If you file a joint tax return with your spouse, both of you are legally responsible for the accuracy of information shown on the tax return, as well as for the entire amount of tax that is owed.

Spouses who are separated often file separate returns simply because they do not have access to complete financial information about the other party. The IRS considers you liable for taxes on a joint return, regardless of whether the divorce decree states you are not liable.

If one spouse actually suspects that the other spouse is not being completely truthful, he or she should consider filing a separate return to avoid possible civil or criminal penalties.

It is possible, but difficult, to obtain "innocent spouse relief" and avoid having to pay taxes, interest and penalties on amounts that were actually owed by the other spouse. You must establish that you did not know, and had no reason to know, that your joint return failed to report some income or claimed some erroneous deductions, credits, or other tax breaks. This is a hard standard to meet, but if you do, you can be relieved of liability for tax on that item.

To obtain innocent spouse relief, you have to apply for it using IRS Form 8857, Request for Innocent Spouse Relief, which can be obtained at www.irs.gov or by calling 1-800-TAX-FORM. You must file this form within two years after the IRS begins collection activities.

Tip The law permits a taxpayer who is divorced, legally separated or living apart from a spouse for at least one year to limit his/her liability in instances where a former spouse may have made erroneous statements on a previous joint tax return. To make the election, the ex-spouse must file IRS Form 8857, and establish the unpaid taxes that should be allocated to the other spouse. The election can't be made if the IRS demonstrates that the spouse seeking the election had actual knowledge of the matter relating to the unpaid taxes when the return was signed. This is a more lenient standard than the innocent spouse relief rule, but it is available only to spouses who have split up. The divorced husband or wife has two years after the IRS begins collection activities to make this election of separate liability, which will excuse the innocent spouse from paying any additional taxes owed or interest and penalties on the item(s) in question. Expanded time periods apply for certain types of equitable relief. See a tax attorney if you are seeking innocent spouse relief.