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Innocent Joint Filer Tax Liability Relief

Many taxpayers choose to file a joint tax return as married or as registered domestic partners (RDP) because of certain benefits either filing status allows. Both taxpayers assume joint and individual responsibility for the tax and any interest or penalty due on the joint tax return even if they later divorce or terminate the partnership. This remains true when the language in a divorce decree or termination of partnership holds a former spouse/RDP responsible for any amounts due on previously filed joint tax returns even if the other spouse/RDP earned all the income.

Generally, when you file a joint liability tax return, you and your spouse/RDP assume responsibility for paying any tax, penalties, and interest due. However, if you meet certain legal requirements, you may qualify for relief of payment on all or part of the balance due.

We will work with you to determine if you meet certain legal requirements for the relief. A spouse/RDP may be fully or partially relieved of the joint tax, penalties, and interest. We offer the following categories of relief:

Additional information:

Relief from additional tax

To qualify for relief from additional tax, you must meet all of the following conditions:

  • You filed a valid, joint tax return.
  • You can prove that when you signed the tax return, you did not know, or had no reason to believe, the liability would not be satisfied when the tax return was filed.
  • At the time you signed the tax return, you were unaware of the items that resulted in an audit assessment of additional tax.
  • Your spouse/RDP created the liability.
  • Taking into account all of the facts and circumstances, it would be unfair to hold you liable for the liability.
  • You submitted your completed FTB 705, Innocent Joint Filer application, to us within the applicable statute of limitations and not later than two years after the date we began collection activities against you.

Relief by separate allocation of liability

Under this type of relief, we review the joint tax return to determine which spouse/RDP is responsible for the tax, penalties, and interest. We assign the liabilities to the responsible spouse/RDP. To qualify for this type of relief, we require that you filed a joint tax return and meet all of the following conditions:

  • You were divorced, legally separated, terminated a registered domestic partnership, or lived apart for 12 months prior to making your request for relief.
  • The tax resulting from the audit is attributable to your spouse/RDP.
  • You had no knowledge of the item(s) that created the tax liability.
  • You did not receive a direct tax benefit.
  • You submitted your completed FTB 705, Innocent Joint Filer application, to us within the applicable statute of limitations and not later than two years after the date we began collection activities against you.

Equitable relief allowances

If you file a joint tax return and you do not qualify for relief from additional tax or the separate allocation of liability, we may discover, through an audit, opportunities for equitable tax relief. Equitable relief also applies to underpayment of tax on your tax return. Some of the factors we consider include:

  • Your current marital/RDP status.
  • You can provide documented evidence that you experienced abuse from your spouse or RDP during your marriage or registered domestic partnership.
  • You can prove that when you signed the tax return, you expected to satisfy the tax liability.
  • In the case of tax resulting from an audit, you were unaware of the tax liability understatement.
  • Your current financial situation and your ability to pay the tax liability.
  • Based on a divorce decree, decree of dissolution, termination of registered domestic partnership, or an agreement to pay the liability, we identify who is legally responsible to pay the tax liability.
  • If you received a significant benefit from the understatement or erroneous items that created the liability.
  • Your compliance with income tax laws in later tax years.

Relief by IRS Determination

If you file a joint tax return without payment in full, and you were granted innocent spouse relief by the IRS, you may be granted relief if you meet the following conditions:

  • You filed a valid joint tax return.
  • You submitted a completed FTB 705, Innocent Joint Filer application.
  • All facts and circumstances are the same for the IRS and the FTB.
  • You provide a copy of the IRS final determination information.
  • You were granted relief by the IRS for the same tax year(s).
  • You provide a copy of the divorce decree/marital settlement agreement or termination of registered domestic partnership.

Relief from community income

If you failed to include community income on your separate tax return, you may be entitled to relief if you meet all the following conditions:

  • You did not file a joint tax return.
  • You did not include an item of community income on your separate tax return for that taxable year.
  • You did not know of, and had no reason to know of, that community income item.
  • You can prove that the unreported income was attributable to your spouse/RDP.

Relief by court order

You may qualify for relief by court order if:

You obtained a divorce/termination of registered domestic partnership from your spouse/RDP, and the court issued an order relieving you of the unpaid tax due from a joint liability.

And either one of the following applies:

  1. You are in the process of obtaining a divorce/termination of registered domestic partnership and your joint gross income exceeds $150,000.
  2. You owe more than $7,500 for the tax year(s) for which you seek relief.

If you qualify for relief by court order, send us a letter requesting a Tax Revision Clearance Certificate (TRCC), which you will provide to the court. In your letter requesting a TRCC, include your name, address, telephone number, and social security number. After the court issues its order, provide us with a copy to help us determine the amount of your relief.

If the gross income and amount you owe fall below the threshold ($150,000 and $7,500), a TRCC is not required.

Please note that the court is limited in the relief that it can provide. The court cannot:

  • Relieve you of your responsibility to pay taxes on your own income.
  • Provide relief on taxes already paid.

Relief from the tax due amount from previously filed tax returns

You may be entitled to relief if you meet all of the following conditions:

  • You filed a joint tax return and the tax liability is not fully paid.
  • You show that you had no knowledge, or reason to know, of the nonpayment.
  • You pay taxes on your own income.

You are not entitled to relief on taxes already paid.

Innocent Joint Filer relief request—required documents

Generally, we request that you provide the following documents:

  • Your statement explaining why you believe you qualify for relief and any documentation that supports your position. Include your name, social security number, and the tax years for which you request relief.
  • Complete copies of your state and federal tax returns for the tax years for which you request relief.
  • If you requested relief from the Internal Revenue Service (IRS), attach a copy of any IRS correspondence responding to your relief request.
  • If you divorced or terminated a registered domestic partnership, attach a complete copy of your divorce decree and marital settlement agreement or termination of registered domestic partnership.

We may request additional documentation based on your specific circumstances.

Innocent Joint Filer relief—eligible signature validation

If you did not sign the joint tax return, or if we determine the signature on the tax return is not yours, we consider the joint tax return invalid, which makes you ineligible for Innocent Joint Filer relief. We may hold you liable for your separate tax liability based on your separate income plus your share of any community income.

Tax liability statement of relief qualifications for divorce decree/termination of registered domestic partnership

We consider decree/termination language insufficient to qualify you for Innocent Joint Filer relief. But, you may qualify for court-ordered relief. To qualify for court-ordered relief, your divorce decree/marital settlement agreement/termination of registered domestic partnership must include the following items:

  • A specific reference to California state income tax.
  • The specific tax years for which you request relief.
  • The amount or percentage of the total tax liability for which each taxpayer is responsible.

While you obtain a divorce/registered domestic partnership termination, call us as soon as possible (Innocent Joint Filer Program phone number: 916.845.7072). We offer case evaluation and advice on the information that you need to include in your divorce decree, marital settlement agreement, or registered domestic partnership termination. In some cases, we may require you to file a Tax Revision Clearance Certificate with the court. We can only relieve you of the liability created from income that you did not earn, manage, or control.

Spouse/RDP notification relief from a joint tax liability

The law requires that we notify your spouse, ex-spouse, RDP, or ex-RDP to allow the non-requesting spouse/RDP an opportunity to provide documentation to grant relief. We also notify your spouse/RDP of our action on your request and provide the non-requesting spouse/RDP with an opportunity to appeal our decision. Upon your request, we keep your information (such as a new name and address) confidential.

Innocent Joint Filer based on financial hardship

A financial hardship alone does not entitle you to Innocent Joint Filer relief. However, we may consider your inability to make payments as a factor for granting you equitable relief.

FTB collection action delayed during request for relief review

Generally, upon receipt of your written request for relief, we suspend all collection activity against you. However, interest continues to accrue while we review your request.

Refunds

If we grant your relief request, under certain circumstances, we may refund certain payments.

How to request Innocent Joint Filer relief

File an FTB 705, Innocent Joint Filer application, and attach a written statement explaining why you feel you qualify for relief.

Resources

Internet: Download the application, FTB 705, Request for Innocent Joint Filer Relief. Follow the directions on the application.

Mail: We will mail you an application upon request. Call 916.845.7072 to request an application, or mail your request to:

STATE OF CALIFORNIA
INNOCENT JOINT FILER PROGRAM MS A-452
FRANCHISE TAX BOARD
PO BOX 2966
RANCHO CORDOVA CA 95741-2966

IRS Innocent Spouse Program information

Refer to IRS Tax Information for Innocent Spouses.

Contact information

Call us at 916.845.7072 (Innocent Joint Filer Program area) to discuss your specific case and circumstances.

We also offer assistance in Spanish by phone or mail.