Spouse relief basics for tax preparers: refunds, consent and Form 8379

Injured and innocent spouse cases often require you to navigate complex tax situations clients are unprepared to face on their own. Mastering the nuances of these designations helps you advocate effectively while strengthening your reputation as a trusted advisor.

When you know how to identify eligible clients for the right relief, you deliver real solutions in moments of financial and personal stress for your clients.

Below, you’ll find a few of the top questions from a recent webinar on the topic and their corresponding answers. If you choose to attend the on-demand version of this webinar, you can access the full recording and the entire list of Q&As.   

Q: If the injured spouse does not work, but the couple has qualifying children for the child tax credit (CTC), earned income credit (EIC), etc., will the injured spouse get any of the refund?

A: If the credit was refundable, they may be eligible for a portion of the refund.

Q: What is tacit consent?

A: Tacit consent, also known as implied consent, basically says the spouse’s actions show they agreed to the signing of a joint return. For example, the spouse didn’t look at the return they were signing despite having an opportunity to do so. If the IRS finds a spouse gave their tacit consent to the filing of a return on their behalf, it is unlikely to grant innocent spouse relief.

Q: Is Form 8379 used only after going through the Taxpayer Advocate Service (TAS), filing Form 911, Request for Taxpayer Advocate Service Assistance, and finding the taxpayer didn’t qualify?

A: Form 8379 should be used when requesting injured spouse relief. If a taxpayer is eligible, most likely TAS would direct the taxpayer to file the form seeking relief.

Q: In general, does the IRS allocate the injured spouse refund based on the couple’s respective incomes? For example, if the injured spouse earned all the income and the other earned nothing but the refund was taken for the other spouse’s debt. Will the IRS refund the entire refund to the injured spouse?

A: The Internal Revenue Manual (25.18.5.4) says a spouse’s share of the joint liability is computed using the separate tax formula, as follows:

Injured spouse’s separate tax liability divided by the total of spouses’ separate tax liabilities multiplied by the joint tax liability shown on return equals injured spouse’s share of tax liability.