Tax Court Grants Innocent Spouse Relief for Separated Husband

Posted on November 07, 2014

The taxpayer husband and wife filed a Joint federal Form 1040 tax return for 2008.

Near the time they separated, the IRS issued a Notice of Deficiency for the taxable year 2008 based upon unreported cancellation of indebtedness income.

Neither spouse filed a Petition in the Tax Court in response to the IRS Notice of Deficiency. The taxpayer husband subsequently filed a Form 8857, Request for Innocent Spouse Relief, alleging that his wife obtained a home equity loan by forging his signature, that the loan was later cancelled and that the wife failed to repay the loan. The unpaid loan was subsequently forgiven, giving rise to the unpaid liability for 2008. The wife was subsequently indicted for theft by deception related to the loan.

After considering the various factors in the case, the Tax Court held in favor of the husband and provided relief from the Joint and several liability for the taxable year 2008.

Do you owe money to the IRS because of a tax return you filed with your spouse?
Do you qualify for Innocent Spouse Relief?