@Carl wrote:
Don't know this for a fact, but I've been "told" that when it comes to the IRS recouping money from fraud (as opposed to other types of debt), the innocent spouse classification is almost always denied in cases where the fraud occurred while the tax filers where married to each other . But still, it definitely can't hurt to file for it and I recommend you do.
I believe this is absolutely true. There are three fact patterns we can think about.
1. Spouse A has a tax debt from before the marriage. (It doesn't matter what the tax debt is, could be child support, unpaid taxes, fraud, or something else). Spouse B is an injured spouse and can file form 8379 to request that part of the refund be allocated to them and paid, even though part of the refund is taken for spouse A's debt.
https://www.irs.gov/individuals/injured-spouse-relief
2. Spouse A and B filed joint returns during their marriage. They have a tax debt, due to child support, fraud, unpaid taxes, or something else. Normally, when spouses file a joint return, they accept joint and several liability for all statements on the joint return. Now, they are divorced. Because the tax debt came from a joint return, the IRS can collect the debt from either of the spouses, even after the divorce, in any amount. If spouse B has more money, they can collect the debt from spouse B even if the errors or fraud were all the fault of spouse A. In this case, spouse B can file form 8857, Request for Innocent Spouse Relief. Spouse B will explain that even though they signed a joint return, the fault was really all due to spouse A and spouse B didn't or couldn't know about the problem due to the circumstances. The IRS may release spouse B from the debt, or grant spouse B a partial relief from the debt by only collecting part of it. Innocent spouse relief is only available after a divorce.
https://www.irs.gov/individuals/innocent-spouse-relief
3. Spouse A and B file joint returns during their marriage. They have a tax debt, due to child support, fraud, unpaid taxes, or something else. Spouse A and B are still married. In that case, they are and remain jointly and equally liable for all tax debts arising from joint returns, and the IRS will not honor either an Innocent or Injured spouse claim. Both spouses are on the hook for the debt.
