innocent-spouse rule

Definition

A tax rule that allows an eligible person to avoid paying their spouse's tax bill in the event of error or fraud. This rule is meant to protect people from evasive or dishonest financial behavior by their spouse, for example in divorce cases. The "innocent spouse" must prove through documentation that they did not themselves know about the tax issue, incur the tax bill, or otherwise benefit from the failure to pay. The application must be made using Form 8857 less than two years after the IRS begins its collection process.
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