When Love Fades and the IRS Comes Knocking: Three Ways to Innocent Spouse Relief

Marriage is great, right?

That is until you find out that your spouse made an extra $100k on the side, never reported it, and now you're on the hook for a huge tax bill on income you knew nothing about.

And just like that, the marriage is over and the tax debt begins.

For many professionals—especially family law attorneys, but also financial advisors, CPAs, and bankruptcy counsel—this is when your client walks into your office with a stack of notices from the IRS and says, “But I had no idea about all of this income."

The good news?

The internal revenue manual has a few life rafts for unsuspecting spouses.

Even if you're not going to fix the problem yourself, here are the three forms of innocent spouse relief you should know about.

1. The “Traditional” Innocent Spouse Claim (Sec. 6015(b))

If your client didn’t know—and had no reason to know—that their spouse understated income or over-claimed deductions on a joint return, they may qualify for full relief from the additional tax assessed.

Even so, not everyone qualifies, and the bar is high.

➲ The IRS asks questions like:

• Was your client involved in household finances?

• Did they benefit from a lifestyle that didn’t quite match the reported income?

• Was there anything suspicious or evasive about how the other spouse handled money?

If your client stuck their head in the sand, that’s not going to fly. But if they genuinely didn’t know and didn’t benefit, this route is worth exploring.

➥ Deadline: Two years from the first IRS collection activity.

2. Separation of Liability (Sec. 6015(c))

This is an option if your client is divorced, legally separated, or has been living apart for at least 12 months. They can ask the IRS to allocate only their share of the tax bill. That means they’d only be liable for what should have been reported based on their income and deductions alone.

That said, proving whether your client had “actual knowledge” is difficult to meet. If your client knew about the understatement, even vaguely, they might be out of luck. But if they didn’t, and the IRS can’t prove otherwise, the separation route may offer relief.

➥ Also important: Be careful about asset transfers between spouses. If the IRS thinks that your client is moving money around to dodge responsibility, Separation of Liability is not going to fly.

➥ Deadline: Two years from collection activity.

3. Equitable Relief (Sec. 6015(f))

This last option is the “catch-all” provision for when neither of the first two apply.

➲ Your client might qualify if:

• The tax was due when the return was filed (not from an audit later),

• They didn’t benefit from the unpaid tax,

• Paying would cause financial hardship,

• And overall, it would be unfair to hold them responsible.

The IRS evaluates these claims holistically, weighing factors like marital status, health, economic hardship, and compliance history.

Proving that this relief is appropriate is difficult.

➥ Deadline: Longer than the others—usually within the collection statute (10 years) or refund claim period.

TL;DR (Too Long; Didn’t Read)

⏩ Joint filers are jointly and severally liable—even if only one spouse caused the problem.

⏩ There are three types of innocent spouse relief: Innocent Spouse Relief, Separation of Liability, and Equitable Relief.

⏩ Claims must be filed within 2 years of IRS collection activity for Innocent Spouse Relief and Separation of Liability but anytime within the statute of limitations for Equitable Relief.

⏩ These options can be life-changing, but they require detailed documentation and careful positioning and they are difficult to qualify.

➤ Have you ever had a client who got stuck with their ex’s tax debt?

➤ How did you help them?