Innocent Spouse Claims

Most of the time, when a married couple files a joint tax return, things go as planned. Everything is properly documented, and both spouses are aware of any incoming returns or tax obligations.  If the married couple owes more taxes than anticipated and/or owes any back taxes, they may decide to make a plan to get on track with the IRS, either by making a lump sum payment or payments over time. The end goal is to ensure they, as a married couple, are in good standing with the IRS.  

However, sometimes, that doesn’t happen. And sometimes, the way forward is for one person to file what is called an Innocent Spouse Claim. 

Innocent Spouse Claims Examples

Example 1: 

John is a high-earning surgeon. His wife, Lisa, works part-time at a local daycare and earns a modest hourly wage. John handles all of the couple’s finances, including preparing and filing their joint tax return each year. Lisa trusts him and signs the return without asking questions or reviewing the details.

What Lisa doesn’t know is that John has been underreporting his income for years—leaving out large sums he’s received from side jobs and consulting work. Lisa never saw or benefited from the hidden income. She lived simply, never had access to John’s accounts, and didn’t enjoy any of the financial advantages that extra money could’ve provided.

When the IRS later audits their return and uncovers the unreported income, Lisa is shocked. Since she had no knowledge of the tax issues and didn’t benefit from the income, she may qualify for innocent spouse relief, which could protect her from having to pay the tax debt caused by John’s actions.

Example 2: 

Sarah is a successful consultant who travels often for work and earns a substantial income through both her full-time job and side contracts. Her husband, Mark, works part-time at a hardware store and brings in a small, steady income. Sarah manages their finances and files their joint tax return each year. Mark trusts her completely and signs whatever she puts in front of him.

What Mark doesn’t know is that Sarah has been underreporting her side income for several years. She deposits some payments into separate accounts Mark doesn’t know about and uses them for personal expenses he never sees. The couple lives modestly, and Mark never questions their financial situation because nothing seems out of the ordinary.

Years later, the IRS audits them and discovers the unreported income. Mark is shocked. He did not know the additional earnings and didn’t benefit from them. Because of this, he may qualify for innocent spouse relief, which could prevent him from being held responsible for the tax debt caused by Sarah’s actions.

How to File an Innocent Spouse Claim

Filing an innocent spouse claim is easier said than done, and getting to that next step can be even more challenging.  According to Jackson Hewitt, “The IRS takes a joint-filing election and joint liability seriously. In fact, in 2021, the IRS received 26,179 innocent spouse requests. The IRS fully allowed only 4,807 of these applications.”

The form used to apply for an innocent spouse claim is Form 8857.  We recommend you don’t embark on this process alone; experienced legal support will help ensure that everything is completed properly with all applicable supporting documents in place. 

Why is it so challenging, and why can’t you simply go through the process yourself? Experienced lawyers say it’s because the circumstances that determine if a spouse is truly an ‘innocent spouse” can be hard to define – and prove. 

IRS Documentation on Innocent Spouse Claims

To better understand how Innocent Spouse Claims work, let’s go straight to the source: The IRS. Here’s how they break it down:

Innocent spouse relief can relieve you from paying additional taxes if your spouse understated taxes due on your joint tax return and you didn’t know about the errors.

Innocent spouse relief is only for taxes due on your spouse’s income from employment or self-employment. You can’t claim relief for taxes due on:

• Your own income

• Household employment taxes

• Individual Shared Responsibility payments

• Business taxes

• Trust fund recovery penalties for employment taxes

You may request innocent spouse relief if:

• You filed a joint return with your spouse

• Your taxes were understated due to errors on your return

• You didn’t know about the errors

• You live in a community property state

Errors that cause understated taxes include:

• Unreported income

• Incorrect deductions or credits

• Incorrect values given for assets

Filing an Innocent Spouse Claim in Washington, DC & Maryland

Filing an innocent spouse claim can be daunting, but you don’t have to face it alone. Michael Lapidus is knowledgeable about tax law in DC and Maryland. A Georgetown Law graduate and seasoned litigator, Michael has a proven track record of helping both individuals and business owners navigate complex legal systems, including IRS disputes and regulatory tax challenges. If you’re considering filing an innocent spouse claim, don’t wait. Contact Michael Lapidus at The Lapidus Law Firm for a free, confidential consultation at 202-785-5111.

Written by: Michael Lapidus