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Innocent Joint Filer Tax Liability Relief

When you file a California joint tax return, you and your spouse/registered domestic partner (RDP) both assume responsibility for paying the taxes, applicable penalties, and interest. However, if you meet certain legal requirements, you may qualify for relief from payment of all or part of the tax liability.

Note that if you establish that you did not sign the joint return or authorize anyone else to sign or file a joint return for you, we will consider that joint return an invalid joint return. In other words, we will not consider it your return, and you will not be eligible to be considered for innocent joint filer relief because there will no longer be a valid joint return. However, if you were required to file a return for any of the tax years in question and you haven't filed your own separate returns, you would need to file any necessary return(s), report your income and tax liability, and pay or make arrangements to pay the liability you report. If you don't file any required returns, we may propose a tax assessment based on information available to us for any of the years in question.

We will work with you to determine if you qualify for relief.

Traditional innocent joint filer relief

You may qualify for relief from assessed additional tax, penalties, and interest if you meet all of the following conditions:

  • You filed a valid joint tax return.
  • At the time you signed the joint 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.

Relief by separate allocation of liability

Under this type of relief, we determine which spouse/RDP is liable for the assessed additional tax, penalties, and interest. We assign the liabilities to the responsible spouse/RDP. To qualify, 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 additional tax we assessed is attributable in part or in full to your spouse/RDP.
  • You had no knowledge of the items that created the tax liability when you signed the joint tax return.

Equitable relief

If you filed a joint tax return and do not qualify for traditional innocent joint filer relief or relief by separate allocation of liability, you may be entitled to equitable relief under certain conditions. To be considered for equitable relief, you must show that some or all of the unpaid liability is attributable to the other spouse/RDP (unless you establish that you were the victim of abuse or financial control by your spouse/RDP). FTB considers all facts and circumstances to determine if it's fair to hold you responsible for the unpaid liability. Some of the factors we consider include:

  • Your current marital/RDP status.
  • Whether you experienced abuse from your spouse/RDP during your marriage or registered domestic partnership.
  • Whether you knew when you signed the tax return that it understated your tax liability or that your spouse/RDP would pay the liability when the return was filed.
  • Your current financial situation and your ability to pay the tax liability.
  • Whether a divorce decree, termination of a registered domestic partnership, or the legally binding agreement identifies you or your spouse/RDP as the person legally liable to pay the tax liability.
  • Whether you received a significant benefit from the unpaid income tax liability or tax deficiency.
  • Your compliance with income tax laws for tax years following the tax years for which you requested relief.

Internal Revenue Service (IRS) relief

If the IRS granted you innocent spouse relief, we may grant you relief from self-assessed unpaid state tax liabilities or an assessed deficiency of additional taxes, if you meet the following conditions:

  • You filed a valid joint tax return.
  • You submitted a completed FTB 705, Innocent Joint Filer application.
  • The facts and circumstances underlying the federal unpaid liability and the California unpaid liability are the same.
  • You were granted relief by the IRS for the same tax years.
  • You provide a copy of the IRS Final Determination Letter.

Relief from community income

If you failed to include community income on your separate tax return, and FTB assessed additional tax against you based on that omitted community property income, you may be entitled to relief from having that community property income included as part of your own gross income 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

Alternatively, you may qualify for revision of joint and several tax liability by a court order if you obtained a divorce decree/termination of registered domestic partnership from your spouse/RDP and the court issues an order relieving you of some of all of the unpaid tax due from a joint tax liability. To qualify for court-ordered revision, the following items must be included in the court order:

  • A specific reference to the amount of California state income tax liabilities for each tax year for which relief is granted.
  • The amount of the total unpaid tax liability each taxpayer is liable for paying.

If you seek court-ordered relief and your joint gross income exceeds $150,000 or you owe more than $7500 for the tax years for which you seek relief, you must send us a letter to request a Tax Revision Clearance Certificate (TRCC) prior to seeking court-ordered relief. In your letter, include your name, address, telephone number, and social security number. You must provide the TRCC to the court. After the court issues its order, provide us with a copy.

Please note that the court is limited in the relief it can provide:

  • The court cannot relieve you of your responsibility to pay taxes on your earned income.
  • Generally, the court cannot provide relief for taxes already paid.

While you obtain a divorce/registered domestic partnership termination, call an Innocent Joint Filer representative at 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 TRCC with the court. We can only relieve you of the liability created from the income that you did not earn, manage, or control.

No Injured Spouse Provision for California

Under Federal law, a spouse may seek relief in instances where a refund on a joint return is used to pay (offset) a debt of the other spouse. California does not conform to this provision.

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.

Collection action delays

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.

Spouse/RDP notification

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 the non requesting 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.

Submit the following documents:

  • FTB 705, Innocent Joint Filer application.
  • A 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 IRS, attach a copy of any IRS correspondence responding to your relief request.
  • 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.

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

Call us at 916.845.7072 to discuss your specific case and circumstances.

We also offer assistance in Spanish by phone or mail.

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Last Updated: 01/17/2018

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