Tax - Injured Spouse Relief Vs. Innocent Spouse Relief

"Injured spouse" and "innocent spouse" are two adverse situations that arise from such shared legal responsibility.

A couple files joint tax return but one affected spouse is made to share the tax consequences of the actions of the other spouse.

But there are differences between the two situations.

1.) INJURED SPOUSE RELIEF

Here the tax consequences happen not only due to understatement of tax liability.

If you have any tax refund but still owe money to the government for non-tax-related reasons, then the government has the right to claim such past due amounts from your refund.

Such legally enforceable liabilities include:

- past due federal taxes
- unpaid state income taxes
- unpaid child support payments
- unpaid spousal support payments
- a federal non-tax debt, e.g., a student loan.

When the government takes that money from the tax refund of joint tax return filers, one spouse can be " injured " if the past liability was created entirely by the other spouse.

So the government wants to give relief to such an "injured" spouse who is unfairly asked to share the consequences.

If a you filed a joint tax return and expected a refund of overpaid taxes, but find your spouse's past governmental dues applied to your share of the refund, then you are eligible for a "relief".

If you are such an "injured" spouse, you can request to receive your share of the refund by filing Form 8379, Injured Spouse Allocation.

2.) INNOCENT SPOUSE RELIEF

This is entirely a tax liability situation with no connection to delinquent support family support or debt owed to the government by either spouse.

One spouse or former spouse who filed a joint return indulges in underpayment of taxes by either one or both actions:

1. makes improper claims to avail ineligible deductions and exemptions, including credits and property basis.

OR

2. omits information to avoid or reduce tax e.g., unreported income.

Then IRS levies and collects interest and penalties for the underpaid tax from both joint filers.

If the second spouse did not know, and had no reason to know, the existence or the extent of understatement of tax, then an unfair situation develops.

If you are an "innocent" spouse, you can can request for relief by filing Form 8857, Innocent Spouse Relief.

But the onus of proving one's innocence is on the "affected" spouse.

That is no simple matter unlike the case of "injured spouse" above where government already has proof of the erring spouse's delinquency or indebtedness.

Here you will have to prove beyond doubt that you were not part of a scheme to defraud the government,
that you didn't have the actual knowledge or a reason to know about the understatement of tax by your spouse or former spouse.

Also, the relief cannot be part of a scheme by both spouses to transfer property to one another.

You may qualify for partial relief if you can prove that, at the time you filed the return, you had no knowledge or reason to know of a portion of an erroneous item, stated or unstated.

Your request, background and motive will undergo the strictest scrutiny by the IRS before they decide to grant relief in the matter.

PLEASE NOTE: This article touches only the bare details of the subjects. For more detailed information, always consult the resources provided by the Internal Revenue Service (IRS).