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Irs 2012 Tax Forms 1040 Instructions

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Irs 2012 Tax Forms 1040 Instructions

Irs 2012 tax forms 1040 instructions Publication 557 - Introductory Material Table of Contents What's New Reminders Introduction What's New Proposed regulations on “good faith determinations”. Irs 2012 tax forms 1040 instructions  Proposed regulations modify standards for making a good faith determination that a foreign organization is a charitable organization, grants to which may be qualifying distributions and not taxable expenditures. Irs 2012 tax forms 1040 instructions The proposed regulations identify a broader class of tax practitioners upon whose written advice a private foundation may base a “good faith determination. Irs 2012 tax forms 1040 instructions ” See, Proposed Regulations: Reliance Standards for Making Good Faith Determinations, REG-134974-12, 2012-47 I. Irs 2012 tax forms 1040 instructions R. Irs 2012 tax forms 1040 instructions B. Irs 2012 tax forms 1040 instructions 553. Irs 2012 tax forms 1040 instructions Prop. Irs 2012 tax forms 1040 instructions Regs. Irs 2012 tax forms 1040 instructions on Good Faith Determinations. Irs 2012 tax forms 1040 instructions New Requirements for section 501(c)(3) Hospitals Under the Affordable Care Act. Irs 2012 tax forms 1040 instructions  The Affordable Care Act (ACA), enacted March 23, 2010, added new requirements that hospital organizations must satisfy in order to be described in section 501(c)(3), as well as new reporting requirements and excise taxes. Irs 2012 tax forms 1040 instructions On June 22, 2012, the Service issued a notice of proposed rulemaking that addresses the new requirements enacted by the ACA applicable to section 501(c)(3) hospital organizations. Irs 2012 tax forms 1040 instructions See, Proposed Regulations: Additional Requirements for Charitable Hospitals, REG-13026-11, 77 Fed. Irs 2012 tax forms 1040 instructions Reg. Irs 2012 tax forms 1040 instructions 38148. Irs 2012 tax forms 1040 instructions On April 3, 2013, the Service issued proposed regulations on the ACA's community health needs assessment (CHNA) requirements. Irs 2012 tax forms 1040 instructions The proposed regulations also discuss the related reporting and excise tax requirements for charitable hospitals and the consequences for failure to satisfy the section 501(r) requirements. Irs 2012 tax forms 1040 instructions See, Proposed Regulations: Community Health Needs Assessments for Charitable Hospitals, REG-106499-12, 78 Fed. Irs 2012 tax forms 1040 instructions Reg. Irs 2012 tax forms 1040 instructions 20,523. Irs 2012 tax forms 1040 instructions Timing of when an Organization is exempt for Federal Tax Purposes. Irs 2012 tax forms 1040 instructions  As noted in section 2. Irs 2012 tax forms 1040 instructions 03(4) of Revenue Procedure 2013-9, 2013-2 I. Irs 2012 tax forms 1040 instructions R. Irs 2012 tax forms 1040 instructions B. Irs 2012 tax forms 1040 instructions 267, the provisions in section 11. Irs 2012 tax forms 1040 instructions 01 regarding the effect of determination letters or rulings recognizing exempt status of organizations described in section 501(c), other than sections 501(c)(3), (9), (17), and (29), have been revised. Irs 2012 tax forms 1040 instructions Prior to this year, and back to 1962, when such organizations applied for recognition, the IRS would usually recognize the organizations as tax exempt from the date of formation, no matter how long the interval between the date of formation and the date of application. Irs 2012 tax forms 1040 instructions In addition to the practical difficulties of ascertaining an organization's purposes and activities for this period, such recognition is now potentially inconsistent with the provisions of section 6033(j), which automatically revokes the exempt status of an organization that fails to file required Form 990 series returns or notices for three consecutive years. Irs 2012 tax forms 1040 instructions The new procedure adopts a practice similar to the rule for section 501(c)(3) organizations for these organizations, generally permitting recognition from the date of formation if the organization has: always met the requirements for exemption, has applied within 27 months from the end of the month in which it was organized, and has not failed to file required Form 990 series returns or notices for three consecutive years. Irs 2012 tax forms 1040 instructions Section 11. Irs 2012 tax forms 1040 instructions 01(3) notes: an organization that otherwise meets the requirements for tax-exempt status and the issuance of a determination letter or ruling that does not meet the requirements for recognition from date of formation will generally be recognized from the postmark date of its application. Irs 2012 tax forms 1040 instructions Exempt Organizations Select Check. Irs 2012 tax forms 1040 instructions  The IRS has developed an on-line search tool, Exempt Organizations Select Check, that allows users to select an exempt organization and check certain information about its federal tax status and filings. Irs 2012 tax forms 1040 instructions It consolidates three former search sites into one, providing expanded search capability and a more efficient way to search for organizations that: Are eligible to receive tax-deductible charitable contributions (Publication 78 data). Irs 2012 tax forms 1040 instructions Users may rely on this list in determining deductibility of contributions, just as they did when Publication 78 was a separate electronic publication rather than part of Select Check. Irs 2012 tax forms 1040 instructions Have had their tax-exempt status automatically revoked under the law because they have not filed Form 990 series returns or notices annually as required for three consecutive years (Auto-Revocation List). Irs 2012 tax forms 1040 instructions Have filed a Form 990-N (e-Postcard) annual electronic notice. Irs 2012 tax forms 1040 instructions  In addition to searching for a particular organization, users may download a complete list of each of the three types of organizations through Exempt Organizations Select Check. Irs 2012 tax forms 1040 instructions See also Revenue Procedure 2011-33, 2011-25 I. Irs 2012 tax forms 1040 instructions R. Irs 2012 tax forms 1040 instructions B. Irs 2012 tax forms 1040 instructions 887. Irs 2012 tax forms 1040 instructions Future developments. Irs 2012 tax forms 1040 instructions . Irs 2012 tax forms 1040 instructions  The IRS has created a page on IRS. Irs 2012 tax forms 1040 instructions gov for information about Publication 557, at www. Irs 2012 tax forms 1040 instructions irs. Irs 2012 tax forms 1040 instructions gov/pub557. Irs 2012 tax forms 1040 instructions Information about any future developments affecting Publication 557 (such as legislation enacted after we release it) will be posted on that page. Irs 2012 tax forms 1040 instructions Reminders The Patient Protection and Affordable Care Act (ACA). Irs 2012 tax forms 1040 instructions   The ACA added several new laws. Irs 2012 tax forms 1040 instructions This includes a new excise tax on indoor tanning services, a small business health care tax credit, additional requirements for tax-exempt hospitals, and the section 501(c)(29) CO-OP program. Irs 2012 tax forms 1040 instructions For more information, go to IRS. Irs 2012 tax forms 1040 instructions gov and select Affordable Care Act Tax Provisions. Irs 2012 tax forms 1040 instructions Electronic filing requirement for large organizations. Irs 2012 tax forms 1040 instructions  For tax years ending on or after December 31, 2006, only organizations that file 250 returns during the calendar year and that have total assets of $10 million or more are required to file Form 990 electronically. Irs 2012 tax forms 1040 instructions For more information, go to e-file for Charities and Non-Profits. Irs 2012 tax forms 1040 instructions Section 501(c)(15) gross receipts. Irs 2012 tax forms 1040 instructions   The definition of gross receipts for purposes of determining whether small insurance companies qualify as tax-exempt under section 501(c)(15) has changed. Irs 2012 tax forms 1040 instructions See Notice 2006-42, 2006-19 I. Irs 2012 tax forms 1040 instructions R. Irs 2012 tax forms 1040 instructions B. Irs 2012 tax forms 1040 instructions 878, Notice 2006-42. Irs 2012 tax forms 1040 instructions Prohibited tax shelter transactions. Irs 2012 tax forms 1040 instructions  New excise taxes are imposed under section 4965 on certain tax-exempt organizations entering into prohibited tax shelter transactions. Irs 2012 tax forms 1040 instructions See T. Irs 2012 tax forms 1040 instructions D. Irs 2012 tax forms 1040 instructions 9492, Excise Taxes on Prohibited Tax Shelter Transactions and Related Disclosure Requirements, 2010-33 I. Irs 2012 tax forms 1040 instructions R. Irs 2012 tax forms 1040 instructions B. Irs 2012 tax forms 1040 instructions 242. Irs 2012 tax forms 1040 instructions See IRS Issues Final Regulations Regarding Excise Taxes on Prohibited Tax Shelter Transactions and Related Disclosure Requirement. Irs 2012 tax forms 1040 instructions Pension Protection Act of 2006 tax changes. Irs 2012 tax forms 1040 instructions  The Pension Protection Act of 2006 made numerous changes to the tax law provisions affecting tax-exempt organizations. Irs 2012 tax forms 1040 instructions Unless otherwise noted, most of the changes became effective on August 17, 2006. Irs 2012 tax forms 1040 instructions For key provisions, go to The Pension Protection Act of 2006. Irs 2012 tax forms 1040 instructions Section 501(c)(3) organizations must make their Form 990-T, Exempt Organization Business Tax Return (and proxy tax under section 6033(e)), open for public inspection for a period of 3 years from the date the Form 990-T is required to be filed (determined with regard to any extension of time for filing) or is actually filed, whichever is later. Irs 2012 tax forms 1040 instructions There is an increase in excise taxes relating to public charities, social welfare organizations, and private foundations. Irs 2012 tax forms 1040 instructions There are additional standards for credit counseling organizations. Irs 2012 tax forms 1040 instructions The definition of convention or association of churches has been modified. Irs 2012 tax forms 1040 instructions Entities that are not required to file Form 990 or 990-EZ must file new Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ. Irs 2012 tax forms 1040 instructions The requirements of disclosure to state officials relating to exempt organizations has been modified. Irs 2012 tax forms 1040 instructions There are excise taxes imposed on excess benefit transactions involving donor advised funds and sponsoring organizations. Irs 2012 tax forms 1040 instructions There are new excise taxes on prohibited tax shelter transactions. Irs 2012 tax forms 1040 instructions There is a modification of recordkeeping requirements for certain charitable contributions. Irs 2012 tax forms 1040 instructions Introduction This publication discusses the rules and procedures for organizations that seek recognition of exemption from federal income tax under section 501(a) of the Internal Revenue Code (the Code). Irs 2012 tax forms 1040 instructions It explains the procedures you must follow to obtain an appropriate ruling or determination letter recognizing your organization's exemption, as well as certain other information that applies generally to all exempt organizations. Irs 2012 tax forms 1040 instructions To qualify for exemption under the Code, your organization must be organized for one or more of the purposes specifically designated in the Code. Irs 2012 tax forms 1040 instructions Organizations that are exempt under section 501(a) include those organizations described in section 501(c). Irs 2012 tax forms 1040 instructions Section 501(c) organizations are covered in this publication. Irs 2012 tax forms 1040 instructions Chapter 1, Application, Approval, and Appeal Procedures, provides general information about the procedures for obtaining recognition of tax-exempt status. Irs 2012 tax forms 1040 instructions Chapter 2, Filing Requirements and Required Disclosures, contains information about annual filing requirements and other matters that may affect your organization's tax-exempt status. Irs 2012 tax forms 1040 instructions Chapter 3, Section 501(c)(3) Organizations, contains detailed information on various matters affecting section 501(c)(3) organizations, including a section on the determination of private foundation status. Irs 2012 tax forms 1040 instructions Chapter 4, Other Section 501(c) Organizations, includes separate sections for specific types of organizations described in section 501(c). Irs 2012 tax forms 1040 instructions Chapter 5, Excise Taxes, provides information on when excise taxes may be imposed. Irs 2012 tax forms 1040 instructions Organizations not discussed in this publication. Irs 2012 tax forms 1040 instructions   Certain organizations that may qualify for exemption are not discussed in this publication, although they are included in the Organization Reference Chart. Irs 2012 tax forms 1040 instructions These organizations (and the Code sections that apply to them) are as follows. Irs 2012 tax forms 1040 instructions Corporations organized under Acts of Congress 501(c)(1) Teachers' retirement fund associations 501(c)(11) Mutual insurance companies 501(c)(15) Corporations organized to finance crop operations 501(c)(16) Employee funded pension trusts (created before June 25, 1959) 501(c)(18) Withdrawal liability payment fund 501(c)(22) Veterans' organizations (created before 1880) 501(c)(23) National Railroad Retirement Investment Trust 501(c)(28) Religious and apostolic associations 501(d) Cooperative hospital service organizations 501(e) Cooperative service organizations of operating educational organizations 501(f)   Section 501(c)(24) organizations (section 4049 ERISA trusts) are neither discussed in the text nor listed in the Organization Reference Chart. Irs 2012 tax forms 1040 instructions   Similarly, farmers' cooperative associations that qualify for exemption under section 521, qualified state tuition programs described in section 529, and pension, profit-sharing, and stock bonus plans described in section 401(a) are not discussed in this publication. Irs 2012 tax forms 1040 instructions If you think your organization falls within one of these categories, contact the IRS for any additional information you need. Irs 2012 tax forms 1040 instructions For telephone assistance, call 1-877-829-5500. Irs 2012 tax forms 1040 instructions   Check the Table of Contents at the beginning of this publication to determine whether your organization is described in this publication. Irs 2012 tax forms 1040 instructions If it is, read the chapter (or section) that applies to your type of organization for the specific information you must give when applying for recognition of exemption. Irs 2012 tax forms 1040 instructions Organization Reference Chart. Irs 2012 tax forms 1040 instructions   The Organization Reference Chart enables you to locate at a glance the section of the Code under which your organization might qualify for exemption. Irs 2012 tax forms 1040 instructions It also shows the required application form and, if your organization meets the exemption requirements, the annual return to be filed (if any), and whether or not a contribution to your organization will be deductible by a donor. Irs 2012 tax forms 1040 instructions It also describes each type of qualifying organization and the general nature of its activities. Irs 2012 tax forms 1040 instructions   You may use the Organization Reference Chart to determine the Code section that you think applies to your organization. Irs 2012 tax forms 1040 instructions Any correspondence with the IRS (in requesting forms or otherwise) will be expedited if you indicate in your correspondence the appropriate Code section. Irs 2012 tax forms 1040 instructions Check the IRS website, IRS. Irs 2012 tax forms 1040 instructions gov, for the latest updates, Tax Information for Charities & Other Non-Profits, www. Irs 2012 tax forms 1040 instructions irs. Irs 2012 tax forms 1040 instructions gov/charities/index. Irs 2012 tax forms 1040 instructions html. Irs 2012 tax forms 1040 instructions Comments and suggestions. Irs 2012 tax forms 1040 instructions   We welcome your comments about this publication and your suggestions for future editions. Irs 2012 tax forms 1040 instructions   You can e-mail us while visiting our website at IRS. Irs 2012 tax forms 1040 instructions gov. Irs 2012 tax forms 1040 instructions   You can send your comments to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Irs 2012 tax forms 1040 instructions NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Irs 2012 tax forms 1040 instructions Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Irs 2012 tax forms 1040 instructions   If you wish telephone assistance, please call 1-877-829-5500. Irs 2012 tax forms 1040 instructions This toll-free telephone service is available Monday through Friday. Irs 2012 tax forms 1040 instructions Prev  Up  Next   Home   More Online Publications
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Change of Address – Online Forms

Are you moving? Report your change of address to continue receiving mail and government benefits. We list the change of address forms online, so you can find everything you need in one place, including the USPS (U.S. Postal Service) form.


U.S. Postal Service: Forward Your Mail

  • Change Your Address Online  – Change your address online for a $1 fee if you have a credit card and valid e-mail address. You can also print the form and then mail or deliver it to your local post office to change your address for free. After changing your address, the U.S. Postal Service will forward your mail to your new address for up to one year.
  • Locate a Post Office  – Find your local post office to pick up or drop off a change of address form.

Other Federal Agencies

  • Internal Revenue Service (PDF)  – Change your address with the IRS if you are expecting a tax refund or other mail. You can also change your address with the IRS by writing your new address in the appropriate boxes on your tax return when you file.
  • Social Security Administration  – If you receive benefits or have Medicare, you can use your mySocialSecurity account to report a change of address. If you don't receive benefits, contact Social Security at 1-800-772-1213 (TTY 1-800-325-0778).
  • Department of Veterans Affairs (PDF)  – Change your address if you are a veteran who receives benefit payments or you wish to update your records.
  • U.S. Citizenship and Immigration Services  – If you are a non-U.S. citizen who is required to register with USCIS, then you need to let them know if you move.

State Agencies

  • Driver's License  – Contact your state if you need to change your address on your driver's license or motor vehicle registration.
  • Voter Registration  – Contact your state's election office if you want to change your address on your voter registration record.

The Irs 2012 Tax Forms 1040 Instructions

Irs 2012 tax forms 1040 instructions Publication 971 - Main Content Table of Contents How To Request ReliefException for agreements relating to TEFRA partnership proceedings. Irs 2012 tax forms 1040 instructions The IRS Must Contact Your Spouse or Former Spouse Tax Court Review of Request Community Property LawsRelief for Married Persons Who Did Not File Joint Returns Innocent Spouse ReliefUnderstated Tax Erroneous Items Actual Knowledge or Reason To Know Indications of Unfairness for Innocent Spouse Relief Separation of Liability ReliefLimitations on Relief Equitable ReliefConditions for Getting Equitable Relief Factors for Determining Whether To Grant Equitable Relief RefundsProof Required Refunds Under Equitable Relief Limit on Amount of Refund Filled-in Form 8857 Flowcharts How To Request Relief File Form 8857 to ask the IRS for the types of relief discussed in this publication. Irs 2012 tax forms 1040 instructions If you are requesting relief for more than three tax years, you must file an additional Form 8857. Irs 2012 tax forms 1040 instructions The IRS will review your Form 8857 and let you know if you qualify. Irs 2012 tax forms 1040 instructions A completed Form 8857 is shown later. Irs 2012 tax forms 1040 instructions When to file Form 8857. Irs 2012 tax forms 1040 instructions   You should file Form 8857 as soon as you become aware of a tax liability for which you believe only your spouse or former spouse should be held responsible. Irs 2012 tax forms 1040 instructions The following are some of the ways you may become aware of such a liability. Irs 2012 tax forms 1040 instructions The IRS is examining your tax return and proposing to increase your tax liability. Irs 2012 tax forms 1040 instructions The IRS sends you a notice. Irs 2012 tax forms 1040 instructions   You must file Form 8857 no later than two years after the date on which the IRS first attempted to collect the tax from you that occurs after July 22, 1998. Irs 2012 tax forms 1040 instructions (But see the exceptions below for different filing deadlines that apply. Irs 2012 tax forms 1040 instructions ) For this reason, do not delay filing because you do not have all the documentation. Irs 2012 tax forms 1040 instructions   Collection activities that may start the 2-year period are: The IRS offset your income tax refund against an amount you owed on a joint return for another year and the IRS informed you about your right to file Form 8857. Irs 2012 tax forms 1040 instructions The filing of a claim by the IRS in a court proceeding in which you were a party or the filing of a claim in a proceeding that involves your property. Irs 2012 tax forms 1040 instructions This includes the filing of a proof of claim in a bankruptcy proceeding. Irs 2012 tax forms 1040 instructions The filing of a suit by the United States against you to collect the joint liability. Irs 2012 tax forms 1040 instructions The issuance of a section 6330 notice, which notifies you of the IRS' intent to levy and your right to a collection due process (CDP) hearing. Irs 2012 tax forms 1040 instructions The collection-related notices include, but are not limited to, Letter 11 and Letter 1058. Irs 2012 tax forms 1040 instructions Exception for equitable relief. Irs 2012 tax forms 1040 instructions   On July 25, 2011, the IRS issued Notice 2011-70 (available at www. Irs 2012 tax forms 1040 instructions irs. Irs 2012 tax forms 1040 instructions gov/irb/2011-32_IRB/ar11. Irs 2012 tax forms 1040 instructions html) expanding the amount of time to request equitable relief. Irs 2012 tax forms 1040 instructions The amount of time to request equitable relief depends on whether you are seeking relief from a balance due, seeking a credit or refund, or both: Balance Due – Generally, you must file your request within the time period the IRS has to collect the tax. Irs 2012 tax forms 1040 instructions Generally, the IRS has 10 years from the date the tax liability was assessed to collect the tax. Irs 2012 tax forms 1040 instructions In certain cases, the 10-year period is suspended. Irs 2012 tax forms 1040 instructions The amount of time the suspension is in effect will extend the time the IRS has to collect the tax. Irs 2012 tax forms 1040 instructions See Pub. Irs 2012 tax forms 1040 instructions 594, The IRS Collection Process, for details. Irs 2012 tax forms 1040 instructions Credit or Refund – Generally, you must file your request within 3 years after the date the original return was filed or within 2 years after the date the tax was paid, whichever is later. Irs 2012 tax forms 1040 instructions But you may have more time to file if you live in a federally declared disaster area or you are physically or mentally unable to manage your financial affairs. Irs 2012 tax forms 1040 instructions See Pub. Irs 2012 tax forms 1040 instructions 556, Examination of Returns, Appeal Rights, and Claims for Refund, for details. Irs 2012 tax forms 1040 instructions Both a Balance Due and a Credit or Refund – If you are seeking a refund of amounts you paid and relief from a balance due over and above what you have paid, the time period for credit or refund will apply to any payments you have made, and the time period for collection of a balance due amount will apply to any unpaid liability. Irs 2012 tax forms 1040 instructions Exception for relief based on community property laws. Irs 2012 tax forms 1040 instructions   If you are requesting relief based on community property laws, a different filing deadline applies. Irs 2012 tax forms 1040 instructions See Relief from liability arising from community property law discussed later under Community Property Laws . Irs 2012 tax forms 1040 instructions Form 8857 filed by or on behalf of a decedent. Irs 2012 tax forms 1040 instructions   An executor (including any other duly appointed representative) may pursue a Form 8857 filed during the decedent's lifetime. Irs 2012 tax forms 1040 instructions An executor (including any other duly appointed representative) may also file Form 8857 as long as the decedent satisfied the eligibility requirements while alive. Irs 2012 tax forms 1040 instructions For purposes of separation of liability relief (discussed later), the decedent's marital status is determined on the earlier of the date relief was requested or the date of death. Irs 2012 tax forms 1040 instructions Situations in which you are not entitled to relief. Irs 2012 tax forms 1040 instructions   You are not entitled to innocent spouse relief for any tax year to which the following situations apply. Irs 2012 tax forms 1040 instructions In a final decision dated after July 22, 1998, a court considered whether to grant you relief from joint liability and decided not to do so. Irs 2012 tax forms 1040 instructions In a final decision dated after July 22, 1998, a court did not consider whether to grant you relief from joint liability, but you meaningfully participated in the proceeding and could have asked for relief. Irs 2012 tax forms 1040 instructions You entered into an offer in compromise with the IRS. Irs 2012 tax forms 1040 instructions You entered into a closing agreement with the IRS that disposed of the same liability for which you want to seek relief. Irs 2012 tax forms 1040 instructions Exception for agreements relating to TEFRA partnership proceedings. Irs 2012 tax forms 1040 instructions   You may be entitled to relief, discussed in (4) earlier, if you entered into a closing agreement for both partnership items and nonpartnership items, while you were a party to a pending TEFRA partnership proceeding. Irs 2012 tax forms 1040 instructions (TEFRA is an acronym that refers to the “Tax Equity and Fiscal Responsibility Act of 1982” that prescribed the tax treatment of partnership items. Irs 2012 tax forms 1040 instructions ) You are not entitled to relief for the nonpartnership items, but you will be entitled to relief for the partnership items (if you otherwise qualify). Irs 2012 tax forms 1040 instructions Transferee liability not affected by innocent spouse relief provisions. Irs 2012 tax forms 1040 instructions   The innocent spouse relief provisions do not affect tax liabilities that arise under federal or state transferee liability or property laws. Irs 2012 tax forms 1040 instructions Therefore, even if you are relieved of the tax liability under the innocent spouse relief provisions, you may remain liable for the unpaid tax, interest, and penalties to the extent provided by these laws. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions Herb and Wanda timely filed their 2008 joint income tax return on April 15, 2009. Irs 2012 tax forms 1040 instructions Herb died in March 2010, and the executor of Herb's will transferred all of the estate's assets to Wanda. Irs 2012 tax forms 1040 instructions In August 2010, the IRS assessed a deficiency for the 2008 return. Irs 2012 tax forms 1040 instructions The items causing the deficiency belong to Herb. Irs 2012 tax forms 1040 instructions Wanda is relieved of the deficiency under the innocent spouse relief provisions, and Herb's estate remains solely liable for it. Irs 2012 tax forms 1040 instructions However, the IRS may collect the deficiency from Wanda to the extent permitted under federal or state transferee liability or property laws. Irs 2012 tax forms 1040 instructions The IRS Must Contact Your Spouse or Former Spouse By law, the IRS must contact your spouse or former spouse. Irs 2012 tax forms 1040 instructions There are no exceptions, even for victims of spousal abuse or domestic violence. Irs 2012 tax forms 1040 instructions We will inform your spouse or former spouse that you filed Form 8857 and will allow him or her to participate in the process. Irs 2012 tax forms 1040 instructions If you are requesting relief from joint and several liability on a joint return, the IRS must also inform him or her of its preliminary and final determinations regarding your request for relief. Irs 2012 tax forms 1040 instructions However, to protect your privacy, the IRS will not disclose your personal information (for example, your current name, address, phone number(s), information about your employer, your income or assets) or any other information that does not relate to making a determination about your request for relief from liability. Irs 2012 tax forms 1040 instructions If you petition the Tax Court (explained below), your spouse or former spouse may see your personal information. Irs 2012 tax forms 1040 instructions Tax Court Review of Request After you file Form 8857, you may be able to petition (ask) the United States Tax Court to review your request for relief in the following two situations. Irs 2012 tax forms 1040 instructions The IRS sends you a final determination letter regarding your request for relief. Irs 2012 tax forms 1040 instructions You do not receive a final determination letter from the IRS within six months from the date you filed Form 8857. Irs 2012 tax forms 1040 instructions If you seek equitable relief for an underpaid tax, you will be able to get a Tax Court review of your request only if the tax arose or remained unpaid on or after December 20, 2006. Irs 2012 tax forms 1040 instructions The United States Tax Court is an independent judicial body and is not part of the IRS. Irs 2012 tax forms 1040 instructions You must file a petition with the United States Tax Court in order for it to review your request for relief. Irs 2012 tax forms 1040 instructions You must file the petition no later than the 90th day after the date the IRS mails its final determination notice to you. Irs 2012 tax forms 1040 instructions If you do not file a petition, or you file it late, the Tax Court cannot review your request for relief. Irs 2012 tax forms 1040 instructions You can get a copy of the rules for filing a petition by writing to the Tax Court at the following address:    United States Tax Court 400 Second Street, NW Washington, DC 20217 Or you can visit the Tax Court's website at www. Irs 2012 tax forms 1040 instructions ustaxcourt. Irs 2012 tax forms 1040 instructions gov Community Property Laws You must generally follow community property laws when filing a tax return if you are married and live in a community property state. Irs 2012 tax forms 1040 instructions Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Irs 2012 tax forms 1040 instructions Generally, community property laws require you to allocate community income and expenses equally between both spouses. Irs 2012 tax forms 1040 instructions However, community property laws are not taken into account in determining whether an item belongs to you or to your spouse (or former spouse) for purposes of requesting any relief from liability. Irs 2012 tax forms 1040 instructions Relief for Married Persons Who Did Not File Joint Returns Married persons who live in community property states, but who did not file joint returns, have two ways to get relief. Irs 2012 tax forms 1040 instructions Relief From Liability Arising From Community Property Law You are not responsible for the tax relating to an item of community income if all the following conditions exist. Irs 2012 tax forms 1040 instructions You did not file a joint return for the tax year. Irs 2012 tax forms 1040 instructions You did not include the item of community income in gross income. Irs 2012 tax forms 1040 instructions The item of community income you did not include is one of the following: Wages, salaries, and other compensation your spouse (or former spouse) received for services he or she performed as an employee. Irs 2012 tax forms 1040 instructions Income your spouse (or former spouse) derived from a trade or business he or she operated as a sole proprietor. Irs 2012 tax forms 1040 instructions Your spouse's (or former spouse's) distributive share of partnership income. Irs 2012 tax forms 1040 instructions Income from your spouse's (or former spouse's) separate property (other than income described in (a), (b), or (c)). Irs 2012 tax forms 1040 instructions Use the appropriate community property law to determine what is separate property. Irs 2012 tax forms 1040 instructions Any other income that belongs to your spouse (or former spouse) under community property law. Irs 2012 tax forms 1040 instructions You establish that you did not know of, and had no reason to know of, that community income. Irs 2012 tax forms 1040 instructions See  Actual Knowledge or Reason To Know , below. Irs 2012 tax forms 1040 instructions Under all facts and circumstances, it would not be fair to include the item of community income in your gross income. Irs 2012 tax forms 1040 instructions See Indications of unfairness for liability arising from community property law, later. Irs 2012 tax forms 1040 instructions Actual knowledge or reason to know. Irs 2012 tax forms 1040 instructions   You knew or had reason to know of an item of community income if: You actually knew of the item of community income, or A reasonable person in similar circumstances would have known of the item of community income. Irs 2012 tax forms 1040 instructions Amount of community income unknown. Irs 2012 tax forms 1040 instructions   If you are aware of the source of the item of community income or the income-producing activity, but are unaware of the specific amount, you are considered to know or have reason to know of the item of community income. Irs 2012 tax forms 1040 instructions Not knowing the specific amount is not a basis for relief. Irs 2012 tax forms 1040 instructions Reason to know. Irs 2012 tax forms 1040 instructions   The IRS will consider all facts and circumstances in determining whether you had reason to know of an item of community income. Irs 2012 tax forms 1040 instructions The facts and circumstances include: The nature of the item of community income and the amount of the item relative to other income items. Irs 2012 tax forms 1040 instructions The financial situation of you and your spouse (or former spouse). Irs 2012 tax forms 1040 instructions Your educational background and business experience. Irs 2012 tax forms 1040 instructions Whether the item of community income represented a departure from a recurring pattern reflected in prior years' returns (for example, omitted income from an investment regularly reported on prior years' returns). Irs 2012 tax forms 1040 instructions Indications of unfairness for liability arising from community property law. Irs 2012 tax forms 1040 instructions   The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold you responsible for the understated tax due to the item of community income. Irs 2012 tax forms 1040 instructions   The following are examples of factors the IRS will consider. Irs 2012 tax forms 1040 instructions Whether you received a benefit, either directly or indirectly, from the omitted item of community income (defined below). Irs 2012 tax forms 1040 instructions Whether your spouse (or former spouse) deserted you. Irs 2012 tax forms 1040 instructions Whether you and your spouse have been divorced or separated. Irs 2012 tax forms 1040 instructions  For other factors see Factors for Determining Whether To Grant Equitable Relief later. Irs 2012 tax forms 1040 instructions Benefit from omitted item of community income. Irs 2012 tax forms 1040 instructions   A benefit includes normal support, but does not include de minimis (small) amounts. Irs 2012 tax forms 1040 instructions Evidence of a direct or indirect benefit may consist of transfers of property or rights to property, including transfers received several years after the filing of the return. Irs 2012 tax forms 1040 instructions   For example, if you receive property, including life insurance proceeds, from your spouse (or former spouse) and the property is traceable to omitted items of community income attributable to your spouse (or former spouse), you are considered to have benefitted from those omitted items of community income. Irs 2012 tax forms 1040 instructions Equitable Relief If you do not qualify for the relief described above and are now liable for an underpaid or understated tax you believe should be paid only by your spouse (or former spouse), you may request equitable relief (discussed later). Irs 2012 tax forms 1040 instructions How and When To Request Relief You request relief by filing Form 8857, as discussed earlier. Irs 2012 tax forms 1040 instructions Fill in Form 8857 according to the instructions. Irs 2012 tax forms 1040 instructions For relief from liability arising from community property law, you must file Form 8857 no later than 6 months before the expiration of the period of limitations on assessment (including extensions) against your spouse for the tax year for which you are requesting relief. Irs 2012 tax forms 1040 instructions However, if the IRS begins an examination of your return during that 6-month period, the latest time for requesting relief is 30 days after the date the IRS' initial contact letter to you. Irs 2012 tax forms 1040 instructions The period of limitation on assessment is the amount of time, generally three years, that the IRS has from the date you filed the return to assess taxes that you owe. Irs 2012 tax forms 1040 instructions Innocent Spouse Relief By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. Irs 2012 tax forms 1040 instructions Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse). Irs 2012 tax forms 1040 instructions However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. Irs 2012 tax forms 1040 instructions The IRS can collect these amounts from either you or your spouse (or former spouse). Irs 2012 tax forms 1040 instructions You must meet all of the following conditions to qualify for innocent spouse relief. Irs 2012 tax forms 1040 instructions You filed a joint return. Irs 2012 tax forms 1040 instructions There is an understated tax on the return that is due to erroneous items (defined later) of your spouse (or former spouse). Irs 2012 tax forms 1040 instructions You can show that when you signed the joint return you did not know, and had no reason to know, that the understated tax existed (or the extent to which the understated tax existed). Irs 2012 tax forms 1040 instructions See Actual Knowledge or Reason To Know, later. Irs 2012 tax forms 1040 instructions Taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax. Irs 2012 tax forms 1040 instructions See Indications of Unfairness for Innocent Spouse Relief , later. Irs 2012 tax forms 1040 instructions Innocent spouse relief will not be granted if the IRS proves that you and your spouse (or former spouse) transferred property to one another as part of a fraudulent scheme. Irs 2012 tax forms 1040 instructions A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Irs 2012 tax forms 1040 instructions Understated Tax You have an understated tax if the IRS determined that your total tax should be more than the amount that was actually shown on your return. Irs 2012 tax forms 1040 instructions Erroneous Items Erroneous items are either of the following. Irs 2012 tax forms 1040 instructions Unreported income. Irs 2012 tax forms 1040 instructions This is any gross income item received by your spouse (or former spouse) that is not reported. Irs 2012 tax forms 1040 instructions Incorrect deduction, credit, or basis. Irs 2012 tax forms 1040 instructions This is any improper deduction, credit, or property basis claimed by your spouse (or former spouse). Irs 2012 tax forms 1040 instructions The following are examples of erroneous items. Irs 2012 tax forms 1040 instructions The expense for which the deduction is taken was never paid or incurred. Irs 2012 tax forms 1040 instructions For example, your spouse, a cash-basis taxpayer, deducted $10,000 of advertising expenses on Schedule C of your joint Form 1040, but never paid for any advertising. Irs 2012 tax forms 1040 instructions The expense does not qualify as a deductible expense. Irs 2012 tax forms 1040 instructions For example, your spouse claimed a business fee deduction of $10,000 that was for the payment of state fines. Irs 2012 tax forms 1040 instructions Fines are not deductible. Irs 2012 tax forms 1040 instructions No factual argument can be made to support the deductibility of the expense. Irs 2012 tax forms 1040 instructions For example, your spouse claimed $4,000 for security costs related to a home office, which were actually veterinary and food costs for your family's two dogs. Irs 2012 tax forms 1040 instructions Actual Knowledge or Reason To Know You knew or had reason to know of an understated tax if: You actually knew of the understated tax, or A reasonable person in similar circumstances would have known of the understated tax. Irs 2012 tax forms 1040 instructions Actual knowledge. Irs 2012 tax forms 1040 instructions   If you actually knew about an erroneous item that belongs to your spouse (or former spouse), the relief discussed here does not apply to any part of the understated tax due to that item. Irs 2012 tax forms 1040 instructions You and your spouse (or former spouse) remain jointly liable for that part of the understated tax. Irs 2012 tax forms 1040 instructions For information about the criteria for determining whether you actually knew about an erroneous item, see Actual Knowledge later under Separation of Liability Relief. Irs 2012 tax forms 1040 instructions Reason to know. Irs 2012 tax forms 1040 instructions   If you had reason to know about an erroneous item that belongs to your spouse (or former spouse), the relief discussed here does not apply to any part of the understated tax due to that item. Irs 2012 tax forms 1040 instructions You and your spouse (or former spouse) remain jointly liable for that part of the understated tax. Irs 2012 tax forms 1040 instructions   The IRS will consider all facts and circumstances in determining whether you had reason to know of an understated tax due to an erroneous item. Irs 2012 tax forms 1040 instructions The facts and circumstances include: The nature of the erroneous item and the amount of the erroneous item relative to other items. Irs 2012 tax forms 1040 instructions The financial situation of you and your spouse (or former spouse). Irs 2012 tax forms 1040 instructions Your educational background and business experience. Irs 2012 tax forms 1040 instructions The extent of your participation in the activity that resulted in the erroneous item. Irs 2012 tax forms 1040 instructions Whether you failed to ask, at or before the time the return was signed, about items on the return or omitted from the return that a reasonable person would question. Irs 2012 tax forms 1040 instructions Whether the erroneous item represented a departure from a recurring pattern reflected in prior years' returns (for example, omitted income from an investment regularly reported on prior years' returns). Irs 2012 tax forms 1040 instructions Partial relief when a portion of erroneous item is unknown. Irs 2012 tax forms 1040 instructions   You may qualify for partial relief if, at the time you filed your return, you had no knowledge or reason to know of only a portion of an erroneous item. Irs 2012 tax forms 1040 instructions You will be relieved of the understated tax due to that portion of the item if all other requirements are met for that portion. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions At the time you signed your joint return, you knew that your spouse did not report $5,000 of gambling winnings. Irs 2012 tax forms 1040 instructions The IRS examined your tax return several months after you filed it and determined that your spouse's unreported gambling winnings were actually $25,000. Irs 2012 tax forms 1040 instructions You established that you did not know about, and had no reason to know about, the additional $20,000 because of the way your spouse handled gambling winnings. Irs 2012 tax forms 1040 instructions The understated tax due to the $20,000 will qualify for innocent spouse relief if you meet the other requirements. Irs 2012 tax forms 1040 instructions The understated tax due to the $5,000 of gambling winnings you knew about will not qualify for relief. Irs 2012 tax forms 1040 instructions Indications of Unfairness for Innocent Spouse Relief The IRS will consider all of the facts and circumstances of the case in order to determine whether it is unfair to hold you responsible for the understated tax. Irs 2012 tax forms 1040 instructions The following are examples of factors the IRS will consider. Irs 2012 tax forms 1040 instructions Whether you received a significant benefit (defined below), either directly or indirectly, from the understated tax. Irs 2012 tax forms 1040 instructions Whether your spouse (or former spouse) deserted you. Irs 2012 tax forms 1040 instructions Whether you and your spouse have been divorced or separated. Irs 2012 tax forms 1040 instructions Whether you received a benefit on the return from the understated tax. Irs 2012 tax forms 1040 instructions For other factors, see Factors for Determining Whether To Grant Equitable Relief later under Equitable Relief. Irs 2012 tax forms 1040 instructions Significant benefit. Irs 2012 tax forms 1040 instructions   A significant benefit is any benefit in excess of normal support. Irs 2012 tax forms 1040 instructions Normal support depends on your particular circumstances. Irs 2012 tax forms 1040 instructions Evidence of a direct or indirect benefit may consist of transfers of property or rights to property, including transfers that may be received several years after the year of the understated tax. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions You receive money from your spouse that is beyond normal support. Irs 2012 tax forms 1040 instructions The money can be traced to your spouse's lottery winnings that were not reported on your joint return. Irs 2012 tax forms 1040 instructions You will be considered to have received a significant benefit from that income. Irs 2012 tax forms 1040 instructions This is true even if your spouse gives you the money several years after he or she received it. Irs 2012 tax forms 1040 instructions Separation of Liability Relief Under this type of relief, the understated tax (plus interest and penalties) on your joint return is allocated between you and your spouse (or former spouse). Irs 2012 tax forms 1040 instructions The understated tax allocated to you is generally the amount you are responsible for. Irs 2012 tax forms 1040 instructions This type of relief is available only for unpaid liabilities resulting from the understated tax. Irs 2012 tax forms 1040 instructions Refunds are not allowed. Irs 2012 tax forms 1040 instructions To request separation of liability relief, you must have filed a joint return and meet either of the following requirements at the time you file Form 8857. Irs 2012 tax forms 1040 instructions You are no longer married to, or are legally separated from, the spouse with whom you filed the joint return for which you are requesting relief. Irs 2012 tax forms 1040 instructions (Under this rule, you are no longer married if you are widowed. Irs 2012 tax forms 1040 instructions ) You were not a member of the same household (explained below) as the spouse with whom you filed the joint return at any time during the 12-month per- iod ending on the date you file Form 8857. Irs 2012 tax forms 1040 instructions Members of the same household. Irs 2012 tax forms 1040 instructions   You and your spouse are not members of the same household if you are living apart and are estranged. Irs 2012 tax forms 1040 instructions However, you and your spouse are considered members of the same household if any of the following conditions are met. Irs 2012 tax forms 1040 instructions You and your spouse reside in the same dwelling. Irs 2012 tax forms 1040 instructions You and your spouse reside in separate dwellings but are not estranged, and one of you is temporarily absent from the other's household as explained in (3) below. Irs 2012 tax forms 1040 instructions Either spouse is temporarily absent from the household and it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse's return. Irs 2012 tax forms 1040 instructions Examples of temporary absences include absence due to imprisonment, illness, business, vacation, military service, or education. Irs 2012 tax forms 1040 instructions Burden of proof. Irs 2012 tax forms 1040 instructions   You must be able to prove that you meet all of the requirements for separation of liability relief (except actual knowledge) and that you did not transfer property to avoid tax (discussed later). Irs 2012 tax forms 1040 instructions You must also establish the basis for allocating the erroneous items. Irs 2012 tax forms 1040 instructions Limitations on Relief Even if you meet the requirements discussed previously, separation of liability relief will not be granted in the following situations. Irs 2012 tax forms 1040 instructions The IRS proves that you and your spouse (or former spouse) transferred assets to one another as part of a fraudulent scheme. Irs 2012 tax forms 1040 instructions A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Irs 2012 tax forms 1040 instructions The IRS proves that at the time you signed your joint return, you had actual knowledge (explained below) of any erroneous items giving rise to the deficiency that were allocable to your spouse (or former spouse). Irs 2012 tax forms 1040 instructions For the definition of erroneous items, see Erroneous Items earlier under Innocent Spouse Relief. Irs 2012 tax forms 1040 instructions Your spouse (or former spouse) transferred property to you to avoid tax or the payment of tax. Irs 2012 tax forms 1040 instructions See Transfers of Property To Avoid Tax , later. Irs 2012 tax forms 1040 instructions Actual Knowledge The relief discussed here does not apply to any part of the understated tax due to your spouse's (or former spouse's) erroneous items of which you had actual knowledge. Irs 2012 tax forms 1040 instructions You and your spouse (or former spouse) remain jointly and severally liable for this part of the understated tax. Irs 2012 tax forms 1040 instructions If you had actual knowledge of only a portion of an erroneous item, the IRS will not grant relief for that portion of the item. Irs 2012 tax forms 1040 instructions You had actual knowledge of an erroneous item if: You knew that an item of unreported income was received. Irs 2012 tax forms 1040 instructions (This rule applies whether or not there was a receipt of cash. Irs 2012 tax forms 1040 instructions ) You knew of the facts that made an incorrect deduction or credit unallowable. Irs 2012 tax forms 1040 instructions For a false or inflated deduction, you knew that the expense was not incurred, or not incurred to the extent shown on the tax return. Irs 2012 tax forms 1040 instructions Knowledge of the source of an erroneous item is not sufficient to establish actual knowledge. Irs 2012 tax forms 1040 instructions Also, your actual knowledge may not be inferred when you merely had a reason to know of the erroneous item. Irs 2012 tax forms 1040 instructions Similarly, the IRS does not have to establish that you knew of the source of an erroneous item in order to establish that you had actual knowledge of the item itself. Irs 2012 tax forms 1040 instructions Your actual knowledge of the proper tax treatment of an erroneous item is not relevant for purposes of demonstrating that you had actual knowledge of that item. Irs 2012 tax forms 1040 instructions Neither is your actual knowledge of how the erroneous item was treated on the tax return. Irs 2012 tax forms 1040 instructions For example, if you knew that your spouse received dividend income, relief is not available for that income even if you did not know it was taxable. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions Bill and Karen Green filed a joint return showing Karen's wages of $50,000 and Bill's self-employment income of $10,000. Irs 2012 tax forms 1040 instructions The IRS audited their return and found that Bill did not report $20,000 of self-employment income. Irs 2012 tax forms 1040 instructions The additional income resulted in a $6,000 understated tax, plus interest and penalties. Irs 2012 tax forms 1040 instructions After obtaining a legal separation from Bill, Karen filed Form 8857 to request separation of liability relief. Irs 2012 tax forms 1040 instructions The IRS proved that Karen actually knew about the $20,000 of additional income at the time she signed the joint return. Irs 2012 tax forms 1040 instructions Bill is liable for all of the understated tax, interest, and penalties because all of it was due to his unreported income. Irs 2012 tax forms 1040 instructions Karen is also liable for the understated tax, interest, and penalties due to the $20,000 of unreported income because she actually knew of the item. Irs 2012 tax forms 1040 instructions The IRS can collect the entire $6,000 plus interest and penalties from either Karen or Bill because they are jointly and individually liable for it. Irs 2012 tax forms 1040 instructions Factors supporting actual knowledge. Irs 2012 tax forms 1040 instructions   The IRS may rely on all facts and circumstances in determining whether you actually knew of an erroneous item at the time you signed the return. Irs 2012 tax forms 1040 instructions The following are examples of factors the IRS may use. Irs 2012 tax forms 1040 instructions Whether you made a deliberate effort to avoid learning about the item in order to be shielded from liability. Irs 2012 tax forms 1040 instructions Whether you and your spouse (or former spouse) jointly owned the property that resulted in the erroneous item. Irs 2012 tax forms 1040 instructions Exception for spousal abuse or domestic violence. Irs 2012 tax forms 1040 instructions   Even if you had actual knowledge, you may still qualify for relief if you establish that: You were the victim of spousal abuse or domestic violence before signing the return, and Because of that abuse, you did not challenge the treatment of any items on the return because you were afraid your spouse (or former spouse) would retaliate against you. Irs 2012 tax forms 1040 instructions   If you establish that you signed your joint return under duress (threat of harm or other form of coercion), then it is not a joint return, and you are not liable for any tax shown on that return or any tax deficiency for that return. Irs 2012 tax forms 1040 instructions However, you may be required to file a separate return for that tax year. Irs 2012 tax forms 1040 instructions For more information about duress, see the instructions for Form 8857. Irs 2012 tax forms 1040 instructions Transfers of Property To Avoid Tax If your spouse (or former spouse) transfers property (or the right to property) to you for the main purpose of avoiding tax or payment of tax, the tax liability allocated to you will be increased by the fair market value of the property on the date of the transfer. Irs 2012 tax forms 1040 instructions The increase may not be more than the entire amount of the liability. Irs 2012 tax forms 1040 instructions A transfer will be presumed to have as its main purpose the avoidance of tax or payment of tax if the transfer is made after the date that is 1 year before the date on which the IRS sent its first letter of proposed deficiency. Irs 2012 tax forms 1040 instructions This presumption will not apply if: The transfer was made under a divorce decree, separate maintenance agreement, or a written instrument incident to such an agreement, or You establish that the transfer did not have as its main purpose the avoidance of tax or payment of tax. Irs 2012 tax forms 1040 instructions If the presumption does not apply, but the IRS can establish that the purpose of the transfer was the avoidance of tax or payment of tax, the tax liability allocated to you will be increased as explained above. Irs 2012 tax forms 1040 instructions Equitable Relief If you do not qualify for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law, you may still be relieved of responsibility for tax, interest, and penalties through equitable relief. Irs 2012 tax forms 1040 instructions Unlike innocent spouse relief or separation of liability relief, you can get equitable relief from an understated tax (defined earlier under Innocent Spouse Relief ) or an underpaid tax. Irs 2012 tax forms 1040 instructions An underpaid tax is an amount of tax you properly reported on your return but you have not paid. Irs 2012 tax forms 1040 instructions For example, your joint 2009 return shows that you and your spouse owed $5,000. Irs 2012 tax forms 1040 instructions You paid $2,000 with the return. Irs 2012 tax forms 1040 instructions You have an underpaid tax of $3,000. Irs 2012 tax forms 1040 instructions Conditions for Getting Equitable Relief You may qualify for equitable relief if you meet all of the following conditions. Irs 2012 tax forms 1040 instructions You are not eligible for innocent spouse relief, separation of liability relief, or relief from liability arising from community property law. Irs 2012 tax forms 1040 instructions You have an understated tax or an underpaid tax. Irs 2012 tax forms 1040 instructions You did not pay the tax. Irs 2012 tax forms 1040 instructions However, see Refunds , later, for situations in which you are entitled to a refund of payments you made. Irs 2012 tax forms 1040 instructions You establish that, taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated or underpaid tax. Irs 2012 tax forms 1040 instructions See Factors for Determining Whether To Grant Equitable Relief, later. Irs 2012 tax forms 1040 instructions You and your spouse (or former spouse) did not transfer assets to one another as a part of a fraudulent scheme. Irs 2012 tax forms 1040 instructions A fraudulent scheme includes a scheme to defraud the IRS or another third party, such as a creditor, former spouse, or business partner. Irs 2012 tax forms 1040 instructions Your spouse (or former spouse) did not transfer property to you for the main purpose of avoiding tax or the payment of tax. Irs 2012 tax forms 1040 instructions See Transfers of Property To Avoid Tax, earlier, under Separation of Liability Relief. Irs 2012 tax forms 1040 instructions You did not file or fail to file your return with the intent to commit fraud. Irs 2012 tax forms 1040 instructions The income tax liability from which you seek relief must be attributable to an item of the spouse (or former spouse) with whom you filed the joint return, unless one of the following exceptions applies: The item is attributable or partially attributable to you solely due to the operation of community property law. Irs 2012 tax forms 1040 instructions If you meet this exception, that item will be considered attributable to your spouse (or former spouse) for purposes of equitable relief. Irs 2012 tax forms 1040 instructions If the item is titled in your name, the item is presumed to be attributable to you. Irs 2012 tax forms 1040 instructions However, you can rebut this presumption based on the facts and circumstances. Irs 2012 tax forms 1040 instructions You did not know, and had no reason to know, that funds intended for the payment of tax were misappropriated by your spouse (or former spouse) for his or her benefit. Irs 2012 tax forms 1040 instructions If you meet this exception, the IRS will consider granting equitable relief although the underpaid tax may be attributable in part or in full to your item, and only to the extent the funds intended for payment were taken by your spouse (or former spouse). Irs 2012 tax forms 1040 instructions You establish that you were the victim of spousal abuse or domestic violence before signing the return, and that, as a result of the prior abuse, you did not challenge the treatment of any items on the return for fear of your spouse's (or former spouse's) retaliation. Irs 2012 tax forms 1040 instructions If you meet this exception, relief will be considered although the understated tax or underpaid tax may be attributable in part or in full to your item. Irs 2012 tax forms 1040 instructions Factors for Determining Whether To Grant Equitable Relief The IRS will consider all of the facts and circumstances in order to determine whether it is unfair to hold you responsible for the understated or underpaid tax. Irs 2012 tax forms 1040 instructions The following are examples of factors that the IRS will consider to determine whether to grant equitable relief. Irs 2012 tax forms 1040 instructions The IRS will consider all factors and weigh them appropriately. Irs 2012 tax forms 1040 instructions Relevant Factors The following are examples of factors that may be relevant to whether the IRS will grant equitable relief. Irs 2012 tax forms 1040 instructions Whether you are separated (whether legally or not) or divorced from your spouse. Irs 2012 tax forms 1040 instructions A temporary absence, such as an absence due to imprisonment, illness, business, vacation, military service, or education, is not considered separation for this purpose. Irs 2012 tax forms 1040 instructions A temporary absence is one where it is reasonable to assume that the absent spouse will return to the household, and the household or a substantially equivalent household is maintained in anticipation of the absent spouse's return. Irs 2012 tax forms 1040 instructions Whether you would suffer a significant economic hardship if relief is not granted. Irs 2012 tax forms 1040 instructions (In other words, you would not be able to pay your reasonable basic living expenses. Irs 2012 tax forms 1040 instructions ) Whether you have a legal obligation under a divorce decree or agreement to pay the tax. Irs 2012 tax forms 1040 instructions This factor will not weigh in favor of relief if you knew or had reason to know, when entering into the divorce decree or agreement, that your former spouse would not pay the income tax liability. Irs 2012 tax forms 1040 instructions Whether you received a significant benefit (beyond normal support) from the underpaid tax or item causing the understated tax. Irs 2012 tax forms 1040 instructions (For a definition of significant benefit, see Indications of Unfairness for Innocent Spouse Relief earlier. Irs 2012 tax forms 1040 instructions ) Whether you have made a good faith effort to comply with federal income tax laws for the tax year for which you are requesting relief or the following years. Irs 2012 tax forms 1040 instructions Whether you knew or had reason to know about the items causing the understated tax or that the tax would not be paid, as explained next. Irs 2012 tax forms 1040 instructions Knowledge or reason to know. Irs 2012 tax forms 1040 instructions   In the case of an underpaid tax, the IRS will consider whether you did not know and had no reason to know that your spouse (or former spouse) would not pay the income tax liability. Irs 2012 tax forms 1040 instructions   In the case of an income tax liability that arose from an understated tax, the IRS will consider whether you did not know and had no reason to know of the item causing the understated tax. Irs 2012 tax forms 1040 instructions Reason to know of the item giving rise to the understated tax will not be weighed more heavily than other factors. Irs 2012 tax forms 1040 instructions Actual knowledge of the item giving rise to the understated tax, however, is a strong factor weighing against relief. Irs 2012 tax forms 1040 instructions This strong factor may be overcome if the factors in favor of equitable relief are particularly compelling. Irs 2012 tax forms 1040 instructions Reason to know. Irs 2012 tax forms 1040 instructions   In determining whether you had reason to know, the IRS will consider your level of education, any deceit or evasiveness of your spouse (or former spouse), your degree of involvement in the activity generating the income tax liability, your involvement in business and household financial matters, your business or financial expertise, and any lavish or unusual expenditures compared with past spending levels. Irs 2012 tax forms 1040 instructions Example. Irs 2012 tax forms 1040 instructions You and your spouse filed a joint 2009 return. Irs 2012 tax forms 1040 instructions That return showed you owed $10,000. Irs 2012 tax forms 1040 instructions You had $5,000 of your own money and you took out a loan to pay the other $5,000. Irs 2012 tax forms 1040 instructions You gave 2 checks for $5,000 each to your spouse to pay the $10,000 liability. Irs 2012 tax forms 1040 instructions Without telling you, your spouse took the $5,000 loan and spent it on himself. Irs 2012 tax forms 1040 instructions You and your spouse were divorced in 2010. Irs 2012 tax forms 1040 instructions In addition, you had no knowledge or reason to know at the time you signed the return that the tax would not be paid. Irs 2012 tax forms 1040 instructions These facts indicate to the IRS that it may be unfair to hold you liable for the $5,000 underpaid tax. Irs 2012 tax forms 1040 instructions The IRS will consider these facts, together with all of the other facts and circumstances, to determine whether to grant you equitable relief from the $5,000 underpaid tax. Irs 2012 tax forms 1040 instructions Factors Weighing in Favor of Equitable Relief The following are examples of factors that will weigh in favor of equitable relief, but will not weigh against equitable relief. Irs 2012 tax forms 1040 instructions Whether your spouse (or former spouse) abused you. Irs 2012 tax forms 1040 instructions Whether you were in poor mental or physical health on the date you signed the return or at the time you requested relief. Irs 2012 tax forms 1040 instructions Refunds If you are granted relief, refunds are: Permitted under innocent spouse relief as explained later under Limit on Amount of Refund . Irs 2012 tax forms 1040 instructions Not permitted under separation of liability relief. Irs 2012 tax forms 1040 instructions Permitted in limited circumstances under equitable relief, as explained under Refunds Under Equitable Relief. Irs 2012 tax forms 1040 instructions Proof Required The IRS will only refund payments you made with your own money. Irs 2012 tax forms 1040 instructions However, you must provide proof that you made the payments with your own money. Irs 2012 tax forms 1040 instructions Examples of proof are a copy of your bank statement or a canceled check. Irs 2012 tax forms 1040 instructions No proof is required if your individual refund was used by the IRS to pay a tax you owed on a joint tax return for another year. Irs 2012 tax forms 1040 instructions Refunds Under Equitable Relief In the following situations, you are eligible to receive a refund of certain payments you made. Irs 2012 tax forms 1040 instructions Underpaid tax. Irs 2012 tax forms 1040 instructions   If you are granted relief for an underpaid tax, you are eligible for a refund of separate payments that you made after July 22, 1998. Irs 2012 tax forms 1040 instructions However, you are not eligible for refunds of payments made with the joint return, joint payments, or payments that your spouse (or former spouse) made. Irs 2012 tax forms 1040 instructions For example, withholding tax and estimated tax payments cannot be refunded because they are considered made with the joint return. Irs 2012 tax forms 1040 instructions   The amount of the refund is subject to the limit discussed later under Limit on Amount of Refund. Irs 2012 tax forms 1040 instructions Understated tax. Irs 2012 tax forms 1040 instructions   If you are granted relief for an understated tax, you are eligible for a refund of certain payments made under an installment agreement that you entered into with the IRS, if you have not defaulted on the installment agreement. Irs 2012 tax forms 1040 instructions You are not in default if the IRS did not issue you a notice of default or take any action to end the installment agreement. Irs 2012 tax forms 1040 instructions Only installment payments made after the date you filed Form 8857 are eligible for a refund. Irs 2012 tax forms 1040 instructions   The amount of the refund is subject to the limit discussed next. Irs 2012 tax forms 1040 instructions Limit on Amount of Refund The amount of your refund is limited. Irs 2012 tax forms 1040 instructions Read the following chart to find out the limit. Irs 2012 tax forms 1040 instructions IF you file Form 8857. Irs 2012 tax forms 1040 instructions . Irs 2012 tax forms 1040 instructions . Irs 2012 tax forms 1040 instructions THEN the refund cannot be more than. Irs 2012 tax forms 1040 instructions . Irs 2012 tax forms 1040 instructions . Irs 2012 tax forms 1040 instructions Within 3 years after filing your return The part of the tax paid within 3 years (plus any extension of time for filing your return) before you filed Form 8857. Irs 2012 tax forms 1040 instructions After the 3-year period, but within 2 years from the time you paid the tax The tax you paid within 2 years immediately before you filed Form 8857. Irs 2012 tax forms 1040 instructions Filled-in Form 8857 This part explains how Janie Boulder fills out Form 8857 to request innocent spouse relief. Irs 2012 tax forms 1040 instructions Janie and Joe Boulder filed a joint tax return for 2007. Irs 2012 tax forms 1040 instructions They claimed one dependency exemption for their son Michael. Irs 2012 tax forms 1040 instructions Their return was adjusted by the IRS because Joe did not report a $5,000 award he won that year. Irs 2012 tax forms 1040 instructions Janie did not know about the award when the return was filed. Irs 2012 tax forms 1040 instructions They agreed to the adjustment but could not pay the additional amount due of $815 ($650 tax + $165 penalty and interest). Irs 2012 tax forms 1040 instructions Janie and Joe were divorced on May 13, 2009. Irs 2012 tax forms 1040 instructions In February 2010, Janie filed her 2009 federal income tax return as head of household. Irs 2012 tax forms 1040 instructions She expected a refund of $1,203. Irs 2012 tax forms 1040 instructions In May 2010, she received a notice informing her that the IRS had offset her refund against the $815 owed on her joint 2007 income tax return and that she had a right to file Form 8857. Irs 2012 tax forms 1040 instructions Janie applies the conditions listed earlier under Innocent Spouse Relief to see if she qualifies for relief. Irs 2012 tax forms 1040 instructions Janie meets the first and second conditions because the joint tax return they filed has an understated tax due to Joe's erroneous item. Irs 2012 tax forms 1040 instructions Janie believes she meets the third condition. Irs 2012 tax forms 1040 instructions She did not know about the award and had no reason to know about it because of the secretive way Joe conducted his financial affairs. Irs 2012 tax forms 1040 instructions Janie believes she meets the fourth condition. Irs 2012 tax forms 1040 instructions She believes it would be unfair to be held liable for the tax because she did not benefit from the award. Irs 2012 tax forms 1040 instructions Joe spent it on personal items for his use only. Irs 2012 tax forms 1040 instructions Because Janie believes she qualifies for innocent spouse relief, she first completes Part I of Form 8857 to determine if she should file the form. Irs 2012 tax forms 1040 instructions In Part I, she makes all entries under the Tax Year 1 column because she is requesting relief for only one year. Irs 2012 tax forms 1040 instructions Part I Line 1. Irs 2012 tax forms 1040 instructions   She enters “2007” on line 1 because this is the tax year for which she is requesting relief. Irs 2012 tax forms 1040 instructions Line 2. Irs 2012 tax forms 1040 instructions   She checks the box because she wants a refund. Irs 2012 tax forms 1040 instructions Note. Irs 2012 tax forms 1040 instructions Because the IRS used her individual refund to pay the tax owed on the joint tax return, she does not need to provide proof of payment. Irs 2012 tax forms 1040 instructions Line 3. Irs 2012 tax forms 1040 instructions   She checks the “No” box because the IRS did not use her share of a joint refund to pay Joe's past-due debts. Irs 2012 tax forms 1040 instructions Line 4. Irs 2012 tax forms 1040 instructions   She checks the “Yes” box because she filed a joint tax return for tax year 2007. Irs 2012 tax forms 1040 instructions Line 5. Irs 2012 tax forms 1040 instructions   She skips this line because she checked the “Yes” box on line 4. Irs 2012 tax forms 1040 instructions Part II Line 6. Irs 2012 tax forms 1040 instructions   She enters her name, address, social security number, county, and best daytime phone number. Irs 2012 tax forms 1040 instructions Part III Line 7. Irs 2012 tax forms 1040 instructions   She enters Joe's name, address, social security number, and best daytime phone number. Irs 2012 tax forms 1040 instructions Line 8. Irs 2012 tax forms 1040 instructions   She checks the “divorced since” box and enters the date she was divorced as “05/13/2009. Irs 2012 tax forms 1040 instructions ” She attaches a copy of her entire divorce decree (not Illustrated) to the form. Irs 2012 tax forms 1040 instructions Line 9. Irs 2012 tax forms 1040 instructions   She checks the box for “High school diploma, equivalent, or less,” because she had completed high school when her 2007 joint tax return was filed. Irs 2012 tax forms 1040 instructions Line 10. Irs 2012 tax forms 1040 instructions   She checks the “No” box because she was not a victim of spousal abuse or domestic violence. Irs 2012 tax forms 1040 instructions Line 11. Irs 2012 tax forms 1040 instructions   She checks the “No” box because neither she nor Joe incurred any large expenses during the year for which she wants relief. Irs 2012 tax forms 1040 instructions Line 12. Irs 2012 tax forms 1040 instructions   She checks the “Yes” box because she signed the 2007 joint tax return. Irs 2012 tax forms 1040 instructions Line 13. Irs 2012 tax forms 1040 instructions   She checks the “No” box because she did not have a mental or physical condition when the return was filed and does not have one now. Irs 2012 tax forms 1040 instructions Part IV Line 14. Irs 2012 tax forms 1040 instructions   Because she was not involved in preparing the return, she checks the box, “You were not involved in preparing the returns. Irs 2012 tax forms 1040 instructions ” Line 15. Irs 2012 tax forms 1040 instructions   She checks the box, “You did not know anything was incorrect or missing” because she did not know that Joe had received a $5,000 award. Irs 2012 tax forms 1040 instructions She explains this in the space provided. Irs 2012 tax forms 1040 instructions Line 16. Irs 2012 tax forms 1040 instructions   She checks the box, “You knew that person had income” because she knew Joe had income from wages. Irs 2012 tax forms 1040 instructions She also lists Joe's income. Irs 2012 tax forms 1040 instructions Under “Type of Income” she enters “wages. Irs 2012 tax forms 1040 instructions ” Under “Who paid it to that person,” she enters the name of Joe's employer, “Allied. Irs 2012 tax forms 1040 instructions ” Under “Tax Year 1” she enters the amount of Joe's wages, “$40,000. Irs 2012 tax forms 1040 instructions ” Because she is only requesting relief for one tax year, she leaves the entry spaces for “Tax Year 2” and “Tax Year 3” blank. Irs 2012 tax forms 1040 instructions Line 17. Irs 2012 tax forms 1040 instructions   She checks the “No” box because she did not know any amount was owed to the IRS when the 2007 return was signed. Irs 2012 tax forms 1040 instructions Line 18. Irs 2012 tax forms 1040 instructions   She checks the “No” box because, when the return was signed, she was not having financial problems. Irs 2012 tax forms 1040 instructions Line 19. Irs 2012 tax forms 1040 instructions   She checks the box, “You were not involved in handling money for the household” because Joe handled all the money for the household. Irs 2012 tax forms 1040 instructions She provides additional information in the space provided. Irs 2012 tax forms 1040 instructions Line 20. Irs 2012 tax forms 1040 instructions   She checks the “No” box because Joe has never transferred money or property to her. Irs 2012 tax forms 1040 instructions Part V Line 21. Irs 2012 tax forms 1040 instructions   She enters the number “1” on both the line for “Adults” and the line for “Children” because her current household consists of herself and her son. Irs 2012 tax forms 1040 instructions Line 22. Irs 2012 tax forms 1040 instructions   She enters her average monthly income for her entire household. Irs 2012 tax forms 1040 instructions Line 23. Irs 2012 tax forms 1040 instructions   She lists her assets, which are $500 for the fair market value of a car, $450 in her checking account, and $100 in her savings account. Irs 2012 tax forms 1040 instructions Signing and mailing Form 8857. Irs 2012 tax forms 1040 instructions    Janie signs and dates the form. Irs 2012 tax forms 1040 instructions She attaches the copy of her divorce decree (not illustrated) required by line 8. Irs 2012 tax forms 1040 instructions Finally, she sends the form to the IRS address or fax number shown in the instructions for Form 8857. Irs 2012 tax forms 1040 instructions This image is too large to be displayed in the current screen. Irs 2012 tax forms 1040 instructions Please click the link to view the image. Irs 2012 tax forms 1040 instructions Boulder's filled-in Form 8857 page 1 This image is too large to be displayed in the current screen. Irs 2012 tax forms 1040 instructions Please click the link to view the image. Irs 2012 tax forms 1040 instructions Boulder's filled-in Form 8857 page 2 This image is too large to be displayed in the current screen. Irs 2012 tax forms 1040 instructions Please click the link to view the image. Irs 2012 tax forms 1040 instructions Boulder's filled-in Form 8857 page 3 This image is too large to be displayed in the current screen. Irs 2012 tax forms 1040 instructions Please click the link to view the image. Irs 2012 tax forms 1040 instructions Boulder's filled-in Form 8857 page 4 Flowcharts The following flowcharts provide a quick way for determining whether you may qualify for relief. Irs 2012 tax forms 1040 instructions But do not rely on these flowcharts alone. Irs 2012 tax forms 1040 instructions Also read the earlier discussions. Irs 2012 tax forms 1040 instructions Figure A. Irs 2012 tax forms 1040 instructions Do You Qualify for Innocent Spouse Relief? Please click here for the text description of the image. Irs 2012 tax forms 1040 instructions "Do You Qualify for Innocent Spouse Relief?" Figure B. Irs 2012 tax forms 1040 instructions Do You Qualify for Separation of Liability Relief? Please click here for the text description of the image. Irs 2012 tax forms 1040 instructions "Do You Qualify for Separation of Liability Relief?" Figure C. Irs 2012 tax forms 1040 instructions Do You Qualify for Equitable Relief? This image is too large to be displayed in the current screen. Irs 2012 tax forms 1040 instructions Please click the link to view the image. Irs 2012 tax forms 1040 instructions "Do You Qualify for Equitable Relief?" Prev  Up  Next   Home   More Online Publications