| Equitable relief is normally the final method of relief that | | | | committing fraud. |
| is considered under innocent spouse relief. This type of | | | | 5. You did not pay the tax owed |
| relief is available if you do not qualify for "classic" | | | | 6. You must be able to prove that it would be unfair to |
| innocent spouse relief or relief by separation of liability. | | | | hold you responsible for the understatement or the |
| Under this type of relief, you may be relieved of your | | | | underpayment of tax. This is where the IRS uses it's |
| responsibility to pay taxes owed, interest, and penalties. | | | | own interpretation. They consider many things such as |
| This was the last method of innocent spouse created | | | | if you are divorced, if you would suffer economic |
| because the IRS realized that there are some | | | | hardship, if you had a legal obligation to pay the tax |
| instances where a spouse still should not be held liable | | | | under the divorce agreement, if you received |
| for the tax amounts owed even if they don't qualify | | | | significant benefit from the unpaid item, if you made an |
| for "classic" innocent spouse relief or relief by | | | | effort to follow federal tax laws, if you had any |
| separation of liability. | | | | reason to know that the tax amount would not be |
| This is the only form of innocent spouse relief where | | | | paid, and they can consider other factors they may |
| you can receive relief from an understatement of tax | | | | see that are relevant. |
| or an underpayment of tax. It is considered an | | | | 7. The tax liability that you are seeking relief for, is the |
| understatement of tax if you reported less taxable | | | | fault of your spouse or former spouse. |
| income than you should have reported. It is considered | | | | Equitable relief is the more open ended type of relief |
| an underpayment of tax if you filled out your return | | | | offered and the IRS considers the relief based on |
| properly but have not paid the entire amount owed. | | | | individual circumstances. There isn't necessarily a set |
| There are 7 conditions you must meet in order to | | | | formula to determine if you will qualify, a lot of the |
| qualify for equitable relief. | | | | qualifications are up to the interpretation of the IRS, |
| | | | especially qualification number 6. Before filing for this |
| 1. You do not qualify for innocent spouse relief or relief | | | | type of relief it is important that you understand the |
| by separation of liability | | | | qualifications and you must be able to prove each one. |
| 2. You did not transfer property or assets with your | | | | To apply for this type of relief, you must file form 8857 |
| spouse for the purpose of committing a fraudulent | | | | (request for innocent spouse relief), form 12510 |
| scheme. | | | | (questionnaire for requesting spouse), and you should |
| 3. You did not transfer property or assets for the | | | | also send a letter with it to stress and clarify why you |
| purpose of avoiding paying tax. | | | | qualify. |
| 4. You did not fail to file your return for the purpose of | | | | |