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DOR Releases Tax Guidance On Innocent Spouse Relief

By Scott Stewart

The Daily Record

The Nebraska Department of Revenue released a general information letter Tuesday clarifying how the department handles innocent spouse relief.

The IRS allows taxpayers to request relief from federal income tax liability when a spouse has a joint liability resulting from filing a joint return where the liability is due to understated tax attributed to erroneous items to which the spouse had no knowledge.

“Generally, the tax, interest, and penalties that qualify for relief can only be collected from your spouse (or former spouse),” according to the IRS. “However, you are jointly and individually responsible for any tax, interest, and penalties that do not qualify for relief. The IRS can collect these amounts from either you or your spouse (or former spouse).”

For example, if your spouse did not report gambling winnings that you were unaware of, the taxes on those unreported gambling winnings could qualify for relief. 

Innocent spouse relief only applies to individual income or self-employment taxes. To request relief, taxpayers file Form 8857 and the IRS calculates how much relief, if any, they may receive.

In the general information letter, the Nebraska Department of Revenue states that the Nebraska Revenue Act does not specifically provide for innocent spouse relief, but the department has the discretion to agree to a settlement of a delinquent tax account.

“Offers in compromise sought based on IRS innocent spouse relief may be considered in circumstances such as older unresolved accounts, hardship cases and retired or limited income taxpayers,” the letter states.

Find more information on the policy at revenue.nebraska.gov/legal/GIL/GILs.html.

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