Innocent Spouse Rule
Innocent Spouse Rule means:
an exception to the general rule that both spouses are jointly and severally liable for the tax liability on a joint return. Under certain circumstances, an innocent spouse does not have joint tax liability. Four requirements must be met for a spouse to obtain relief:
1. A joint income tax return must be filed.
2. There must be a substantial understatement of tax attributable to grossly erroneous items of one spouse.
3. The spouse claiming relief must establish that in signing the return he or she did not know, and had no reason to know, of the substantial understatement.
4. Taking into account all of the facts and circumstances, it would be inequitable to hold the spouse seeking relief liable for the deficiency. The general measuring stick to determine such inequity has been the degree to which the spouse seeking relief benefited from the substantial understatement. Former IRC (check if this IRC provision is current here) §6013(e)(l).
See the entries Income Tax and State Income Tax in the American Encyclopedia of Law.
Description and Definition of Innocent Spouse Rule
An exception to the general rule that both signers of a joint return are individually liable for the entire tax due plus penalties and interest. Basically, if you can show that you didn't know and didn't have reason to know about an error that resulted in the underpayment of tax on a joint return you can be relieved of responsibility for that underpayment. Under the innocent spouse rule a spouse may claim to not be jointly liable if he or she did not know about the errors and did not benefit from them. You have two years from the time the IRS begins trying to collect the underpayment to petition for innocent spouse relief.
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