Claiming Innocent Spouse Relief (Form 8857) in a community property state

Community property laws play a crucial role when filing a tax return if you are married and reside in a community property state. These states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Under these laws, both spouses are entitled to half of the total community income and expenses. If a joint return is filed, both spouses are jointly and severally liable for the total tax liability. However, if relief from joint and several liability is requested, community property laws are not considered in determining the ownership of an item.

Relief for Married Persons Who Did Not File Joint Returns

Married individuals living in community property states who did not file joint returns have two options for relief:

1. Relief From Liability for Tax Attributable to an Item of Community Income:

   You are not responsible for the tax on an item of community income if:

1. 1. You did not file a joint return for the tax year.
   2. You did not include the item of community income in your gross income.
   3. The item of community income is one of the following:
      • Wages, salaries, and other compensation received by your spouse (or former spouse).
      • Income derived from a trade or business operated by your spouse (or former spouse).
      • Your spouse's (or former spouse's) distributive share of partnership income.
      • Income from your spouse's (or former spouse's) separate property.
      • Any other income belonging to your spouse (or former spouse) under community property law.
   4. You did not know of, and had no reason to know of, the community income.
   5. It would be unfair to include the item of community income in your gross income under all facts and circumstances.

2. Equitable Relief:

If you do not qualify for the above relief and are liable for an unpaid or understated tax that should be paid by your spouse (or former spouse), you may request equitable relief.

How to complete Form 8958

1. Complete Form 8958
2. Allocate the income as earned- not a 50/50 split as normal
3. If you do not have access to the spouse's information, visit the IRS Filing Status tool to determine if you can use a different filing status. 

How and When to Request Innocent Spouse Relief (Form 8857)

For relief from liability for tax attributable to an item of community income, file Form 8857. 

Form 8857 must be filed no later than six months before the expiration of the period of limitations on assessment against your spouse for the tax year in question. If the IRS begins an examination of your return during that six-month period, the latest time for requesting relief is 30 days after the IRS's initial contact letter.

Form 8857:

• Federal Section
• Miscellaneous Forms
• Request for Innocent Spouse Relief

Note- Form 8857 cannot be e-filed

Do not file Form 8857 with your tax return or the Tax Court. Instead, mail it to one of the following addresses.

If using the U.S. Postal Service:

Internal Revenue Service
P.O. Box 120053
Covington, KY 41012

If using a private delivery service:

Internal Revenue Service
7940 Kentucky Drive, Stop 840F
Florence, KY 41042