If your spouse cheated on his or her taxes and you had no idea, the IRS has made it a little easier for you to avoid tax liability.
“Innocent spouse relief” applies in situations where you and your spouse filed a joint return with an understatement of taxes, the understatement was due to erroneous items of the your spouse, you didn’t know – and had no reason to know – of the understatement when you filed the return, and considering all of the facts and circumstances, it would be unfair to hold you liable. Until this week, however, there was a two-year limit on the ability to claim innocent spouse relief.
On July 25, the IRS issued an announcement that they were eliminating this two-year limit, thus potentially providing relief for many who otherwise would have been liable for the tax transgressions of their spouse. This article in the Washington Post, provides a good discussion. Who says the IRS never does anything nice?