Publication 89
Innocent Spouse Relief
(And Separation of Liability
And Equitable Relief)
Pub 89 (2/15)
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Publication 89
Innocent Spouse Relief
(And Separation of Liability
And Equitable Relief)
Pub 89 (2/15)
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| Note: A Publication is an informational document that addresses a particular topic of interest to taxpayers. Subsequent changes in the law or regulations, judicial decisions, Tax Appeals Tribunal decisions, or changes in department policies could affect the validity of the information contained in a publication. Publications are updated regularly and are accurate on the date issued. The information provided in this document does not cover every situation and is not intended to replace the law or change its meaning. |
| Table of contents Page Introduction .................................................................................................................................................... 4 Notification of your spouse or former spouse ................................................................................................. 4 Community property laws .............................................................................................................................. 5 Federal relief ................................................................................................................................................. 5 Definitions...................................................................................................................................................... 6 Understatement of tax.............................................................................................................................. 6 Substantial understatement of tax ............................................................................................................ 6 Underpayment of tax ............................................................................................................................... 6 Erroneous items ....................................................................................................................................... 6 Innocent spouse relief for tax years beginning before January 1, 1999 .......................................................... 7 Relief for tax years beginning on or after January 1, 1999 ............................................................................. 8 Innocent spouse relief .............................................................................................................................. 9 Partial relief ...................................................................................................................................... 10 Indications of unfairness for innocent spouse relief ......................................................................... 11 Separation of liability relief .................................................................................................................... 11 Burden of proof ................................................................................................................................ 12 Limitations on relief .......................................................................................................................... 12 How to estimate your separation of liability ...................................................................................... 13 Equitable relief ...................................................................................................................................... 13 Factors for determining whether to grant equitable relief .................................................................. 15 If you disagree with the Tax Department’s decision .................................................................................... 16 Conciliation conference .......................................................................................................................... 16 Tax Appeals hearing .............................................................................................................................. 17 Other types of relief ..................................................................................................................................... 18 Nonobligated spouse relief .................................................................................................................... 18 Offer in compromise .............................................................................................................................. 18 Power of attorney ........................................................................................................................................ 19 Frequently asked questions ......................................................................................................................... 19 Table 1 – Innocent spouse relief for tax years beginning before January 1, 1999 ........................................ 23 Table 2 – Relief for tax years beginning on or after January 1, 1999 ........................................................... 24 Worksheet 1 – Estimating your separation of liability ................................................................................... 25 Instructions for completing Worksheet 1 ................................................................................................ 26 Sample – Case A Completing Worksheet 1 ................................................................................................. 28 Example of completed Worksheet 1 (Sample case A)............................................................................ 29 Sample – Case B Completing Form IT-285 ................................................................................................. 30 Example of completed Form IT-285 ....................................................................................................... 32 Sample – Case C Completing Form IT-285 (Allocation of items between spouses) ..................................... 36 Example Allocation of items between spouses (Sample case C) ........................................................... 38 |
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Publication 89 (2/15)
Introduction When you file a joint income tax return, the law makes both you and your
spouse responsible for the entire tax liability. This is called joint and several
liability. Joint and several liability applies not only to the tax liability shown
on the return, but also to any additional tax, penalty, and interest the Tax
Department (the department) determines to be due, even if the additional
tax due is based on the income, deductions, or credits of your spouse (or
former spouse).
You remain jointly and severally liable for any tax, penalty, and interest due
on your joint return, and the department can collect from you even if you
later divorce and the divorce decree states that your former spouse is
solely responsible for the tax.
However, in some cases a spouse (or former spouse) will be relieved of
liability for all or a portion of the tax, interest, and penalties due on a joint
income tax return under the following provisions of the Tax Law:
• For tax years beginning before January 1, 1999, innocent spouse
relief is available under former Tax Law section 651(b)(5).
• For tax years beginning on or after January 1, 1999, section 654 of
the Tax Law provides for: innocent spouse relief, separation of liability
relief, and equitable relief.
Each type of relief has different requirements. This publication explains the
different types of relief, the requirements for each type of relief, who may
qualify, and how to apply for relief. Table 1 (see page 23) and Table 2 (see
page 24) compare the rules for the different types of relief.
You are not required to calculate the tax, interest, and penalties that qualify
for relief. The department will calculate the amount due after you request
relief and mail you a detailed description of any adjusted liability.
For information on nonobligated spouse relief, which prevents your share
of a joint income tax refund from being applied to certain debts of your
spouse, see Other types of relief on page 18.
By law, the department must contact your spouse (or former spouse) in
Notification of
matters related to a joint return. There are no exceptions, even for victims
your spouse or of spousal abuse or domestic violence. Therefore, the department will
former spouse inform your spouse (or former spouse) that you filed for innocent spouse
relief, separation of liability relief, or equitable relief and will allow him or
her to participate in the process. The department must also inform him or
her of the preliminary and final determinations regarding your request for
relief.
However, to protect your privacy, the department will not disclose your
personal information (for example, your current name, address, phone
number(s), employer, income, or assets) or any other information that does
not relate to your request for relief.
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Note: If you petition for a hearing in the Division of Tax Appeals (see
page 17), your spouse (or former spouse) may see your personal
information.
Generally, you must follow community property laws when filing a tax
Community
return if you are married and live in a community property state.
property laws Community property states are: Arizona, California, Idaho, Louisiana,
Nevada, New Mexico, Texas, Washington, and Wisconsin. Generally,
community property laws provide that you and your spouse are both
entitled to one-half of your total community income and responsible for
one-half of your expenses.
If you and your spouse filed a joint New York State income tax return while
a resident of another state that is a community property state, you are both
jointly and severally liable for the total liability on the return. If you request
relief from joint and several liability, community property laws are not taken
into account in determining whether an item belongs to you or your spouse
(or former spouse).
For federal income tax purposes, section 6015 of the Internal Revenue
Federal relief
Code (IRC) provides for relief from joint and several liability for taxpayers
who file joint federal income tax returns. For taxpayers requesting both
federal and New York State relief, the federal provisions will also apply for
New York State income tax purposes except to the extent that any
provision in section 6015 is either inconsistent with or not relevant to the
Tax Law. For information on how to request relief from a federal joint
income tax liability, see federal Publication 971, Innocent Spouse Relief.
Federal innocent spouse relief. Generally, if you have received innocent
spouse relief from the Internal Revenue Service (IRS) under
section 6015(b) of the IRC for an understatement of tax due to an
erroneous item(s) of your spouse (or former spouse), you are entitled to
equivalent relief from New York State. The understatement of tax on your
New York State income tax return must be from the same tax year and
attributable to the same erroneous item(s) as the federal income tax
liability. File Form IT-285, Request for Innocent Spouse Relief (and
Separation of Liability and Equitable Relief), and attach a copy of your
federal Form 8857, Request for Innocent Spouse Relief, and a copy of the
final determination received from the IRS to document the federal relief. If
you are not sure what type of federal relief was granted, contact the IRS at
1 800 829-1040.
Federal equitable relief. The IRS procedures for requests for equitable
relief (Rev. Proc. 2013-34) will apply for New York State income tax
purposes except to the extent that any provision is either inconsistent with
or not relevant to the Tax Law (see Equitable relief on page 13).
Victims of spousal abuse or domestic violence. If the IRS determines
that you signed your joint federal return under duress (threat of harm or
other form of coercion), the federal joint return is considered invalid and
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you are not liable for the federal tax from the joint return. However, the IRS
may require you to file a separate federal return for that tax year and pay
the tax due, if any.
Note: If the IRS determined that your joint federal income tax return is
invalid and you filed a joint New York State income tax return for the same
tax year, you must report the federal change (that is, from married filing
joint to married filing separate) by filing an amended New York State
income tax return.
Definitions
Understatement of An understatement of tax, or deficiency, is generally the difference between
the total amount of tax that the department determines should have been
tax
shown on the return, and the amount that actually was shown on the
return.
Example – You and your spouse filed a joint return showing $5,000 of tax
due, which was fully paid. The department audits the return and finds
$10,000 of income that your spouse earned but did not report. With the
additional income, the total tax becomes $5,700. The amount of the
understatement of tax is $700 ($5,700 - $5,000).
Substantial A substantial understatement of tax is any understatement of tax exceeding
one hundred dollars.
understatement of
tax
Underpayment of An underpayment of tax is tax that was properly shown on the return, but
has not been paid.
tax
Example – You filed a joint return that properly reflects your income and
deductions, but showed an unpaid balance due of $5,000. You and your
spouse were getting divorced. You gave your spouse $2,500 and your
spouse promised to pay the full $5,000, but your spouse did not. You and
your spouse are both liable for the $5,000 underpayment of tax.
Erroneous items Any income, deduction, credit, or basis is an erroneous item if it was
omitted from or incorrectly reported on the joint return. The following are
examples of erroneous items:
• Unreported income. Your spouse received a $10,000 cash bonus
but it was not reported on your joint income tax return.
• Incorrect deduction, credit, or basis. Your spouse claimed a
$15,000 business expense but did not actually incur this expense.
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For tax years beginning before January 1, 1999, relief from a joint liability is
Innocent
only available as innocent spouse relief under former Tax Law
spouse relief section 651(b)(5). For calendar year filers, this means tax year 1998 or
for tax years earlier.
beginning
To qualify for innocent spouse relief under section 651(b)(5), you must
before meet all of the following conditions:
January 1, 1999
• You filed a joint return that has a substantial understatement of tax
due to an erroneous item(s) of your spouse (or former spouse); and
• You establish that at the time you signed the joint return you did not
know, and had no reason to know, that there was a substantial
understatement of tax; and
• Taking into account all the facts and circumstances, it would be unfair
to hold you liable for the substantial understatement of tax.
In addition, if a substantial understatement of tax is attributable to a
New York deduction, exemption, credit, or property basis for which there is
no basis in fact or law (and not due to an omission from New York adjusted
gross income), one of the following additional requirements must be met in
order to qualify for innocent spouse relief:
• If the innocent spouse’s New York adjusted gross income for the most
recent tax year ending before the date the deficiency notice is mailed
is $20,000 or less, the liability from the erroneous item(s) must be
greater than 10% of the innocent spouse’s adjusted gross income.
• If the innocent spouse’s New York adjusted gross income for the most
recent tax year ending before the date the deficiency notice is mailed
is more than $20,000, the liability from the erroneous item(s) must be
greater than 25% of the innocent spouse’s adjusted gross income.
For purposes of making the computation for either item above, if the
innocent spouse is married to another spouse at the close of the most
recent tax year ending before the date the deficiency notice is mailed, the
innocent spouse’s New York adjusted gross income must include the
New York adjusted gross income of the new spouse, whether or not they
file a joint return.
How to request relief for tax years beginning before January 1, 1999.
You may use Form IT-285, Request for Innocent Spouse Relief (and
Separation of Liability and Equitable Relief), oryou can submit a signed
statement showing why you believe you qualify for relief for the tax year(s)
involved. If you do not use Form IT-285 and choose to send a statement,
the statement must include:
• your name,
• your current address,
• your social security number, and
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• the New York State Tax Department assessment (bill) ID number (if
known).
Send your Form IT-285 or statement (with any supporting documentation
attached) to:
NYS TAX DEPARTMENT
PROTEST CORRESPONDENCE UNIT
W A HARRIMAN CAMPUS
ALBANY NY 12227-5120
If the department determines that you are not eligible for innocent spouse
relief, you may protest that determination. See If you disagree with the Tax
Department’s decision on page 16.
If you would like to discuss the resolution of any balance due on your tax
liability, call the Civil Enforcement Division (CED) at (518) 457-5434.
Section 654 was added to the Tax Law in 1999 to make it easier for a
Relief for tax
taxpayer to be relieved from an income tax liability related to a spouse (or
years beginning former spouse). Section 654 applies to joint tax liabilities for any tax year
on or after beginning on or after January 1, 1999. For calendar year filers, this means
tax year 1999 or later.
January 1, 1999
Note: If you establish that you signed your joint New York State income tax
return under duress (threat of harm or other form of coercion), then it is not
a joint return, and you are not liable for tax from that return. However, you
may be required to file a separate return for that tax year, which may result
in you owing tax.
Section 654 of the Tax Law provides for the following three types of relief:
• Innocent spouse relief
• Separation of liability relief
• Equitable relief
You must use Form IT-285, Request for Innocent Spouse Relief (and
Separation of Liability and Equitable Relief), to request relief for a tax year
beginning on or after January 1, 1999. The department will consider
whether you qualify under innocent spouse relief, separation of liability
relief, or equitable relief.
File Form IT-285 as soon as you are notified by the department or you
otherwise become aware of an income tax liability for which you believe
only your spouse (or former spouse) should be liable.
Generally, to be considered for innocent spouse relief or separation of
liability relief, you must file Form IT-285 no later than two years after the
date on which the department first attempts to collect the tax from you by
issuing a levy, an income execution, or any other asset seizure.
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To be considered for equitable relief, the above mentioned two-year time
limit does not apply (see TSB-M-11(11)I , Equitable Relief). You may
request equitable relief regardless of when the department first took
collection action. However, you must file Form IT-285 within the period of
limitation on collection (generally 20 years from the first date a warrant
could have been filed by the commissioner, whether or not a warrant is
filed). In addition, if you are requesting a refund of tax you paid, you must
file Form IT-285 within the time period for requesting a refund (generally
three years from the date the original return was filed or two years from the
date the tax was paid, whichever is later).
If you are requesting relief for more than one tax year, you need to file only
one Form IT-285. However, you must complete a separate allocation
schedule and statement for each tax year for which you are requesting
relief (see the instructions for Form IT-285).
The department will review your Form IT-285 and supporting information
and let you know if you qualify for relief. If you qualify, the department will
also recalculate the understatement or underpayment of tax and related
penalty and interest.
If it is determined you are not eligible for any of the types of relief available
by filing Form IT-285, and you would like to discuss the resolution of any
balance due on your tax liability, call the Civil Enforcement Division (CED)
at (518) 457-5434.
If you disagree, in whole or in part, with the department’s determination
concerning your request for relief, see If you disagree with the Tax
Department’s decision on page 16.
Note: If you have not received a determination notice from the department
within six months from the date you filed Form IT-285, you may:
• request a conciliation conference from the Bureau of Conciliation and
Mediation Services (see page 16), or
• petition for a hearing in the Division of Tax Appeals (see page 17) to
protect your rights if the decision turns out to be unfavorable.
Innocent spouse You may qualify for innocent spouse relief only if all of the following apply:
relief
• you filed a joint return for the tax year(s) for which you are requesting
relief; and
• there is an understatement of tax on the return(s) that is due to an
erroneous item(s) of your spouse (or former spouse); and
• you can show that when you signed the return(s) you did not know,
and had no reason to know, that the understatement of tax existed (or
the extent to which the understatement existed); and
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• taking into account all the facts and circumstances, it would be unfair
to hold you liable for the understatement of tax.
By requesting innocent spouse relief, you may be relieved of responsibility
for paying tax, interest, and penalties if your spouse (or former spouse)
improperly reported items on or omitted items from your joint income tax
return. If you are allowed innocent spouse relief, the tax, penalty, and
interest that qualify for relief can be collected only from your spouse (or
former spouse). However, you are jointly and severally liable for any tax,
penalty, and interest that do not qualify for relief. The department can
collect these amounts from you or your spouse (or former spouse).
Refunds. You are not eligible for a refund of payments made with the joint
return (including withholding tax and estimated tax payments), joint
payments, or payments that your spouse (or former spouse) made.
You may be able to receive a refund of any separate payment(s) you
made. You may also be entitled to a refund of your portion of a joint
overpayment from another tax year that was applied to the liability to the
extent you can establish that you provided the funds resulting in the
overpayment. However, all claims for refunds must be made within the time
period for seeking a refund (generally three years from the date the original
return was filed, or two years from the date the tax was paid, whichever is
later).
Partial relief If you knew about any of the erroneous items but not the full extent of the
item(s), you may be allowed relief for the part of the understatement you
did not know about if you meet all other requirements.
You must explain in a written statement how much you knew, and why you
did not know or had no reason to know the full extent of the item(s). In this
instance, you may have to pay only your share of the jointly issued
assessment.
Example: At the time you signed and filed your joint income tax return, you
knew that your spouse had gambling winnings of $5,000 but did not report
these winnings on your joint tax return. The department examined your tax
return and determined that your spouse’s unreported gambling winnings
were $25,000. This resulted in a much larger understatement of tax than
you were aware of at the time you signed the return.
You establish that because of the way your spouse handled gambling
winnings, you did not know about, and had no reason to know about, the
additional $20,000 in gambling winnings. Therefore, the understatement of
tax due to $20,000 of gambling winnings will qualify for innocent spouse
relief if you meet the other requirements, but you will not qualify for relief for
the understatement of tax due to the $5,000 of gambling winnings you
were aware of.
You and your spouse are jointly and individually liable for the tax due on
the $5,000 understatement you knew about, and the department can
collect this amount from either you or your spouse.
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Indications of The department will consider all the facts and circumstances of your case
unfairness for to determine if it is unfair to hold you responsible for an understatement of
innocent spouse tax. Two indicators the department may use are whether you:
relief
• received any significant benefit from the unreported income that
caused the understatement of tax; or
• were later divorced from or deserted by your spouse.
You can receive a significant benefit either directly or indirectly. For
example, if your spouse did not report $10,000 of income on your joint
return, you can benefit directly if your spouse shares that $10,000 with you.
You can benefit indirectly from the unreported income if your spouse uses
it to pay extraordinary household expenses.
You do not have to receive a benefit immediately for it to be significant. For
example, money your spouse gives you several years after he or she
received it, or money you inherited from your spouse (or former spouse)
can be a significant benefit.
Support payments you receive as a result of a divorce proceeding are not
taken into account when determining whether you received a significant
benefit.
Separation of Under separation of liability relief, the department allocates (divides) the
understatement of tax (plus penalties and interest) on your joint return
liability relief
between you and your spouse (or former spouse). The understatement of
tax allocated to you is generally the amount you are responsible for. See
How to estimate your separation of liability on page 13.
Separation of liability relief applies only to amounts owed that have not
been paid. It cannot give you a refund of amounts already paid.
To request separation of liability relief you must have filed a joint return and
meet one of the following requirements at the time you file Form IT-285:
• You are no longer married to, or are legally separated from, the
spouse with whom you filed the joint return for which you are
requesting relief. (For purposes of this requirement, if your spouse is
deceased you are no longer married.)
• You were not a member of the same household as the spouse with
whom you filed the joint return at any time during the 12-month period
ending on the date you file Form IT-285.
Members of the same household. You and your spouse are not
members of the same household if you are living apart and are
estranged. However, you and your spouse are considered members
of the same household if any of the following conditions are met:
1. You and your spouse reside in the same dwelling.
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2. You and your spouse reside in separate dwellings but are not
estranged, and one of you is temporarily absent from the other’s
household as explained in below. 3.
3. Either spouse is temporarily absent from the household and it is
reasonable to assume that the absent spouse will return to the
household, and the household or a substantially equivalent
household is maintained in anticipation of the absent spouse’s
return. Examples of temporary absence include absence due to
imprisonment, illness, business, vacation, military service, or
education.
Burden of proof You must be able to prove that you meet all of the requirements for
separation of liability relief and that you did not transfer property to avoid
tax. You must also establish a basis for allocating any erroneous items.
Therefore, you should carefully complete Form IT-285 and attach all
supporting documentation.
Transfers of property to avoid tax. If your spouse (or former spouse)
transfers property (or the right to property) to you for the main purpose of
avoiding tax or payment of tax, the tax liability allocated to you will be
increased by the fair market value of the property on the date of the
transfer. A transfer will be presumed to have as its main purpose the
avoidance of tax or payment of tax if the transfer is made within one year
before the date the department first issued a Statement of Proposed Audit
Changes or a Notice of Deficiency.
This presumption will not apply if one of the following applies:
• the transfer was made under a divorce decree, separate maintenance
decree, or a written instrument incident to such a decree, or
• you establish that the transfer did not have as its main purpose the
avoidance of tax or payment of tax.
Limitations on relief Even if you meet the requirements for separation of liability relief, your
request will not be granted in the following situations:
1. The department can establish that you and your spouse (or former
spouse) transferred assets as part of a fraudulent scheme. A
fraudulent scheme includes a scheme to defraud the IRS, the
department, or another third party such as a creditor, ex-spouse, or
business partner.
2. The department can establish that at the time you signed your joint
return, you had actual knowledge of any erroneous item giving rise
to the deficiency that is allocable to your spouse (or former spouse).
3. Your spouse (or former spouse) transferred property to you to avoid
tax or the payment of tax. (See Transfers of property to avoid tax
above ) .
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In situations 2 and 3 above, the department will deny your request only for
the part of the deficiency due to the incorrect items about which you had
actual knowledge, or to the extent of the value of the property transferred. If
you establish that you signed your joint return under duress (threat of harm
or other form of coercion), it is not a joint return, and you are not liable for
tax from that return. However, you may be required to file a separate return
for that tax year which may result in you owing additional tax.
Actual knowledge. Relief does not apply to any part of the understated tax
due to your spouse’s (or former spouse’s) erroneous items of which you
had actual knowledge. You and your spouse (or former spouse) remain
jointly and severally liable for this part of the understated tax. If you had
actual knowledge of only a portion of an erroneous item, the department
will not grant relief for that portion of the item.
Example – You and your spouse filed a joint return showing your wages of
$50,000 and your spouse’s self-employment income of $10,000. The
department audited the return and found that you and your spouse did not
report an additional $20,000 of your spouse’s self-employment income on
the return. The additional income resulted in a $1,500 understatement of
tax, plus penalty and interest. After obtaining a legal separation from your
spouse, you filed Form IT-285 to request separation of liability relief.
The department proved that at the time you signed the joint return, you
actually knew about $5,000 of the additional income because your spouse
deposited the $5,000 into your joint bank account.
Your spouse is liable for all of the understatement of tax, interest and
penalties due to the $20,000 of unreported self-employment income. You
are liable only for the understatement of tax, interest, and penalties due to
the additional $5,000 that you actually knew about.
The department can collect the part of the understatement of tax, interest,
and penalties due to $5,000 of unreported income from either you or your
spouse. The department can collect the understatement of tax, interest,
and penalties due on the remaining $15,000 of unreported income only
from your spouse.
How to estimate your You are not required to calculate the amount of relief available under
separation of liability separation of liability. The department will calculate your separation of
liability, and any related interest and penalties, after you file a completed
Form IT-285 with the required statement and supporting documentation
(see the instructions for Form IT-285). However, if you wish to estimate
yourWorksheet 1 Estimating - your separation of separation of liability, use
liability on page 25. In addition to tax, your share of the liability may include
penalties and interest.
Equitable relief You may be allowed equitable relief if, taking into account all facts and
circumstances, the department determines you should not be held liable for
an understatement or underpayment of tax.
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Equitable relief generally applies to an underpayment of tax and part or all
of any understatement of tax that does not qualify for either innocent
spouse relief or separation of liability relief. The department will
automatically consider equitable relief for any understatement of tax if it
determines that innocent spouse relief and separation of liability relief do
not apply.
Refunds. You are not eligible for a refund of payments made with the joint
return (including withholding tax and estimated tax payments), joint
payments, or payments that your spouse (or former spouse) made.
You may be able to receive a refund of any separate payment(s) you
made. You may also be entitled to a refund of your portion of a joint
overpayment from another tax year that was applied to the liability to the
extent you can establish that you provided the funds resulting in the
overpayment. However, all claims for refunds must be made within the time
period for seeking a refund (generally three years from the date the original
return was filed, or two years from the date the tax was paid, whichever is
later).
You may qualify for equitable relief if you filed a joint return and you meet
all of the following conditions:
• you are not eligible for innocent spouse relief or separation of liability
relief;
• you and your spouse (or former spouse) did not transfer assets to one
another as part of a fraudulent scheme;
• your spouse (or former spouse) did not transfer assets to you for the
main purpose of avoiding tax or the payment of tax;
• you did not file or fail to file your return with the intent to commit fraud;
and
• you establish that, after taking into account all the facts and
circumstances, it would be unfair to hold you liable for the
understatement or underpayment of tax.
Example – You and your spouse filed a joint 2012 income tax return
showing tax due of $10,000. You and your spouse agree that you will each
pay $5,000 towards the tax due. Since you and your spouse maintain
separate checking accounts, you deposit $5,000 into your spouse’s
checking account so your spouse can write one check for $10,000 to pay
the tax due. Without your knowledge, your spouse pays only $5,000
towards the tax liability.
You establish that you had no knowledge, or reason to know, that at the
time you signed the return your spouse would not pay the tax. Also, you
and your spouse divorced in 2013. Both these facts indicate that it may be
unfair to hold you liable for the $5,000 underpayment. The department will
consider these facts, together with all the other facts and circumstances, to
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determine whether to grant you equitable relief from the $5,000
underpayment.
Factors for The department will consider all the facts and circumstances of your case
determining whether in order to determine whether it is unfair to hold you responsible for the
to grant equitable understatement of tax. The department will consider all relevant factors and
relief weigh them appropriately.
Examples of factors that weigh in favor of equitable relief:
• You are separated (whether legally or not), widowed, or divorced from
your spouse.
Note: A temporary absence, such as an absence due to
imprisonment, illness, business, vacation, military service, or
education is not considered separation for this purpose. A temporary
absence is one where it is reasonable to assume that the absent
spouse will return to the household, and the household or a
substantially equivalent household is maintained in anticipation of the
absent spouse’s return.
• You would suffer economic hardship (for example, you would not be
able to pay your reasonable living expenses) if relief is not granted.
The department will take your current income, expenses, and assets
into consideration.
• You were abused by your spouse (or former spouse), or your spouse
(or former spouse) maintained control of the household finances by
restricting your access to financial information, and because of the
abuse or control you were not able to question or challenge the taxes
reported as due, or the payment of the taxes due, on the joint return.
• You were in poor mental or physical health on the date you signed the
return or at the time you requested relief.
• You did not know and had no reason to know about the items causing
the understatement or that the tax would not be paid.
• Your former spouse has a legal obligation to pay the tax under a
divorce decree or agreement. (This will not weigh in your favor if you
knew or had reason to know, at the time the divorce decree or
agreement was entered into, that your spouse would not pay the tax.)
• The tax for which you are requesting relief is attributable to your
spouse (or former spouse).
Examples of factors that weigh against equitable relief:
• You will not suffer economic hardship if relief is not granted.
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• You knew or had reason to know about the items causing the
understatement or that the tax would be unpaid at the time you signed
the return.
• You received a significant benefit from the unpaid tax or items causing
the understatement. (See Indications of unfairness for innocent
spouse relief on page 11 for a discussion of significant benefit.)
• You have not made a good faith effort to comply with New York State
income tax laws for the tax year for which you are requesting relief or
the following years.
• You have a legal obligation to pay the tax under a divorce decree or
agreement.
• The tax for which you are requesting relief is attributable to you.
If you disagree, in whole or in part, with the department’s decision
If you disagree
concerning your request for relief, or if you have not received a
with the Tax determination on your request within six months from the date you filed
Department’s Form IT-285 (for amounts related to tax years 1999 and later), you may:
decision
• request a conciliation conference from the Bureau of Conciliation and
Mediation Services (BCMS), or
• petition for a hearing in the Division of Tax Appeals.
Conciliation A conciliation conference is a rapid and inexpensive way to resolve
protests without a formal hearing.
conference
You can appear at the conference by yourself or appoint a representative
by completing a Power of Attorney (see page 19). A representative can
include:
• an attorney,
• a certified public accountant,
• a public accountant enrolled with the New York State Department of
Education, or
• an enrolled agent licensed to practice before the IRS.
All others may request special permission from the Director of BCMS to
represent a client.
An impartial conferee will conduct the conference, which typically lasts less
than two hours. A department representative will participate to explain the
department’s position. You will then have an opportunity to ask questions,
explain your position, and submit supporting documentation.
After all information and evidence has been presented, the conferee will
attempt to mediate the dispute. If mediation is unsuccessful, the conferee
will render a decision.
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After the conference, the conferee will send you a proposed resolution in
the form of a Consent. If you indicate your acceptance by signing and
returning the Consent within 15 days, the disagreement will be concluded.
Otherwise, the conferee will issue a Conciliation Order. This order is
binding on the Tax Department, and will be binding on you unless you file a
petition for a hearing with the Division of Tax Appeals within 90 days after
the Conciliation Order is mailed to you.
To request a conference, you must complete Form CMS-1, Request for
Conciliation Conference, and mail it to the department no later than 90
days from the date the department mailed its determination notice to you.
Mail your request to:
BCMS
WA HARRIMAN CAMPUS
BUILDING 9
ALBANY NY 12227-0918
Tax Appeals The Tax Appeals hearing process begins when you file a petition with the
Division of Tax Appeals. You must indicate in writing the specific actions of
hearing
the Tax Department youno later are protesting. You must file your petition
than 90 days from the date the department mails its determination or
within 90 days after a Conciliation Order is mailed to you (see Conciliation
conference on page 16). If you do not file a petition, or you file it late, the
Division of Tax Appeals cannot review your request for relief.
A Tax Appeals hearing is a proceeding before an impartial administrative
law judge and is reported stenographically. After the hearing, the
administrative law judge will issue a determination. The determination is
binding on both parties (i.e., you and the Tax Department) unless you or
the department requests a review of the determination by the Tax Appeals
Tribunal by filing an exception within 30 days of notification of the
determination. If such a review is requested, the record of the hearing and
any additional oral or written arguments will be considered. After this
review, the Tribunal will issue a decision affirming, reversing, or modifying
the administrative law judge’s determination, or referring the matter back to
the administrative law judge for further hearing.
Small claims option. You may also elect to have your hearing held in the
Small Claims Unit if the amount in dispute is within the dollar limits set by
the Rules of Practice and Procedure of the Tax Appeals Tribunal. The
hearing is conducted as informally as possible by an impartial presiding
officer. The presiding officer’s determination is conclusive and is not
subject to review by any other unit in the Division of Tax Appeals, the Tax
Appeals Tribunal, or by any court in the state.
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Petition forms and the Rules of Practice and Procedure are available on
the Division of Tax Appeals Web site (www.dta.ny.gov) or you may write to:
DIVISION OF TAX APPEALS
AGENCY BUILDING 1
EMPIRE STATE PLAZA
ALBANY NY 12223
Other types of
relief
Nonobligated Nonobligated spouse relief is different from innocent spouse relief,
spouse relief separation of liability relief, and equitable relief. It cannot be used to
request relief from a joint tax liability.
If you are filing a joint return and only your spouse owes a debt (as
described below), you can separate your part of the refund by submitting a
completed Form IT-280, Nonobligated Spouse Allocation, with your joint
New York State income tax return.
Debts your spouse may owe include: New York State tax liabilities (other
than a liability from a joint return you filed with your spouse); defaulted
governmental education, state university, or city university loans; past-due
support liability; past-due legally enforceable debt to a New York State
agency; or New York City warrant judgment debt.
You qualify as a nonobligated spouse if:
• you have income (such as wages or interest) and prepaid taxes (such
as withholding or estimated tax payments) to report on a joint return,
or
• you are going to file a joint return for any refundable credit(s), and do
not want to apply your part of the joint refund or refundable credit to a
debt owed solely by your spouse.
For more information about nonobligated spouse relief, visit the department
Web site.
Offer in You may qualify for an offer in compromise under section 171-eighteenth-d
of the Tax Law if you are jointly and severally liable on a joint income tax
compromise
return, and you meet the following conditions:
• at the time of the offer, you and your spouse are divorced, separated,
or living apart and ineligible to file a joint income tax return; and
• you are able to demonstrate that collection of your spouse’s (or former
spouse’s) share of liability from you could not be accomplished within
a reasonable length of time without imposing substantial economic
hardship on you. Substantial economic hardship does not necessarily
require you to file for bankruptcy or be insolvent.
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This offer in compromise would relieve you from the share of the joint
liability attributable to the income of your spouse (or former spouse). This
share is determined by multiplying the entire amount of the joint liability by
a fraction, the numerator of which is your spouse’s (or former spouse’s) tax
determined on a separate basis, and the denominator of which is the sum
of your spouse’s (or former spouse’s) tax plus your tax, both of which are
determined on a separate filing basis.
If you obtain an offer in compromise under section 171-eighteenth-d for
your spouse’s (or former spouse’s) share of the liability, this does not
relieve your spouse (or former spouse) from having to pay the entire
amount due with respect to that return.
To request offer in compromise relief under section 171-eighteenth-d, file
Form DTF-4.2, Compromise of Spousal Share of Liability on Joint Tax
Return.
The Tax Law contains strict secrecy provisions to protect the confidentiality
Power of
of tax returns and tax return information. Consequently, you must give
attorney specific written authorization to a practitioner, paid preparer, or other
representative before he or she will be given access to your confidential
records or be allowed to represent you before the department or the
Division of Tax Appeals.
A power of attorney is evidence that a practitioner or other person may act
on your behalf. The power of attorney must contain explicit authorization for
your representative to act for you, and must be properly completed and
signed.
The department prefers that you use one of the department’s power of
attorney forms, but will accept other forms if they contain all the necessary
elements as required on the Tax Department forms. Tax Department power
of attorney forms may be used for New York State tax matters,
New York City tax matters, or both.
If you would like the department to correspond with your representative,
you should complete and send a power of attorney with your request.
This section answers questions commonly asked by taxpayers about relief
Frequently
from a joint tax liability.
asked
questions
What is joint and When you file a joint income tax return, the law makes both you and your
spouse jointly and individually responsible for the tax and any interest or
several liability?
penalty due on the joint return. This applies not only to the tax shown on
the return, but also to any additional tax, penalty, and interest the
department determines to be due after the return is filed. You remain jointly
and severally liable for the taxes, and the department can collect from you
even if you later divorce and the divorce decree states that your former
spouse is solely responsible for the tax.
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How can I get For tax years beginning before January 1, 1999, you may request innocent
spouse relief under former Tax Law section 651(b)(5) (see page 7).
relief from joint
and several For tax years beginning on or after January 1, 1999, you may request
liability? innocent spouse relief, separation of liability relief, or equitable relief under
Tax Law section 654 (see page 8).
If you do not qualify for relief under sections 651(b)(5) or 654, see Other
types of relief on page 18.
What if the On the date your request for relief is received by the department, the
department will suspend all collection activity on that liability until a final
department has
determination is made.
levied my bank
account for a tax
liability I want to
request relief for?
Do I qualify for No. There are many situations where you may owe tax that is related to
your spouse (or former spouse), and you may not be eligible for relief. For
relief for all
example, you and your spouse file a joint return that reports $10,000 of
situations when income. You know that your spouse earns income on a cash basis and that
there is an $5,000 of additional income was not reported on your joint return. You are
understatement of not eligible for innocent spouse relief or separation of liability relief when
tax? you have knowledge of the understatement of tax.
If the understatement of tax does not qualify for innocent spouse relief or
separation of liability relief, the department will automatically consider
equitable relief. Equitable relief is generally available for liabilities that are
unpaid.
Is my marital Yes. If you are now divorced, legally separated, or living apart from the
spouse you filed the joint return with, or if your spouse (or former spouse)
status a
is deceased, this will be a factor in considering your request for innocent
consideration in spouse relief or equitable relief. However, you may still qualify for innocent
granting relief spouse relief or equitable relief even if your marital status has not changed
from a joint and since you filed the joint return.
several liability?
To request separation of liability relief, at least one of the following must be
true:
• You are no longer married.
• Your spouse is deceased.
• You are legally separated from your spouse.
• You were not a member of the same household as the spouse you
filed the joint return with at any time during the 12-month period
ending on the date you filed Form IT-285.
If you were abandoned or receive no economic support from your spouse
(or former spouse), attach supporting documentation to your request.
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Will my spouse Yes. By law, the department must notify your spouse (or former spouse) in
matters related to a joint return, including a request for relief and the
(or former
department’s final determination. Your spouse (or former spouse) will have
spouse) be the option of participating in the determination of the amount of relief, if
notified of my any, from the liability. (See Notification of your spouse or former spouse on
request for relief? page 4.)
How do I Economic hardship means you are unable to pay your basic living
expenses such as food, clothing, housing, medical expenses (including
demonstrate
health insurance), transportation, child care, child support, etc.
economic
hardship? Attach a signed statement to your request for relief detailing the facts and
circumstances that support your claim of current economic hardship.
Factors that are considered include late child support payments, difficulty in
meeting household expenses, medical bills and expenses, or other similar
examples of economic distress. The department will contact you if
additional documentation is needed.
Can I request Yes. File Form IT-285, Request for Innocent Spouse Relief (and
Separation of Liability and Equitable Relief), with the department employee
relief while my
assigned to your audit case.
joint return is
under audit by the
Tax Department?
How will I find out The department will send you a determination letter notifying you of its
decision to accept or deny your request. For tax years 1999 and later, if
the result of my
you have not received a determination within 6 months after you filed your
request for relief? request, or if you disagree with a determination you received for any tax
year, see If you disagree with the Tax Department’s decision on page 16.
Why would a Even if you meet the requirements (see Separation of liability relief on
page 11), the department will not grant a request for separation of liability
request for
relief in any of the following situations:
separation of
liability be • The department can establish that you and your spouse (or former
denied? spouse) transferred assets as part of a fraudulent scheme.
• The department can establish that at the time you signed your joint
return, you had actual knowledge of any erroneous items giving rise
to the deficiency that can be allocated to your spouse (or former
spouse).
• You transferred property to your spouse (or former spouse) just to
avoid tax or the payment of tax.
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If I am denied No. The department will automatically consider whether separation of
liability relief or equitable relief would apply to your situation, and contact
innocent spouse
you if additional information is required.
relief, must I file
another
Form IT-285 if I
believe I might
qualify for
separation of
liability relief or
equitable relief?
Can I get a refund If you are granted relief, refunds are permitted under innocent spouse relief
and under limited circumstances, equitable relief. Refunds are
of payments not
permitted under separation of liability relief.
already made
toward the tax In cases where refunds are permitted, the department will only refund
liability after I am payments you can prove you made with your own money. However, no
granted relief? proof must be submitted in a case where the department applied all or a
part of a New York State income tax refund from a return you filed, to pay a
liability on a joint return for another year.
Where do I send You will receive an adjusted assessment notice with payment instructions
after you receive the determination letter. You may also call the Civil
payment for any
Enforcement Division (CED) at (518) 457-5434.
tax that may still
be due after I
receive relief?
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Table 1 – Innocent spouse relief for tax years beginning before January 1, 1999
(Former Tax Law section 651(b)(5))
Type of liability You must have filed a joint return that has a substantial understatement of tax
(an amount over $100) due to an erroneous item of your spouse (or former
spouse).
Marital status Not considered a factor for relief.
Knowledge You must establish that at the time you signed the joint return you did not know,
and had no reason to know, that there was a substantial understatement of tax.
Other qualifications If a substantial understatement is attributable to a New York deduction,
exemption, credit, or property basis for which there is no basis in fact or law, the
tax liability must exceed a specified percentage of the innocent spouse’s
New York adjusted gross income for the most recent tax year ending before the
date the deficiency is mailed. This requirement does not apply to a substantial
understatement attributable to an omission from New York adjusted gross
income.
Unfairness When taking into account all the facts and circumstances, it would be unfair to
hold you liable for the substantial understatement of tax.
Refunds Your request can generate a refund.
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Table 2 – Relief for tax years beginning on or after January 1, 1999
(Tax Law section 654)
Factors Innocent spouse relief Separation of liability Equitable relief
Type of liability You must have filed a joint You must have filed a joint You must have filed a
return that has an return that has an joint return that has either
understatement of tax due understatement of tax due, an understatement or an
to an erroneous item of at least in part, to an underpayment of tax.
your spouse. erroneous item of your
spouse.
Marital status Marital status may be You must be divorced (or Marital status may be
considered in determining your spouse is deceased), considered in determining
whether to grant relief. legally separated, or not a whether to grant relief.
member of the same
household as your spouse
for an entire year before you
file for relief.
Knowledge You must establish that at If the department establishes May be considered as a
the time you signed the that you actually knew of the factor.
joint return you did not item giving rise to the
know, and had no reason understatement, then you
to know, that there was an are not entitled to relief for
understatement of tax or any portion of the liability
the extent of the attributable to that item.
understatement.
Other None None You do not qualify for
qualifications either innocent spouse
relief or separation of
liability.
Unfairness When taking into account Not considered as a factor When taking into account
all the facts and for relief. all the facts and
circumstances, it would be circumstances, it would
unfair to hold you liable for be unfair to hold you liable
the understatement of tax. for the understatement of
tax.
Refunds Your request can generate No refunds are permitted. Your request can
a refund. generate a refund.
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Worksheet 1 – Estimating your separation of liability
See instructions on page 26.
(This optional worksheet is provided for you to estimate your liability. You are not required to complete it.)
Do not send this worksheet to the Tax Department.
1. Enter the net amount of income and
deductions used to calculate the
understatement of tax and allocated
to you. 1.
2. Enter the net amount of all income
and deductions used to calculate the
understatement of tax.* 2.
3. Divide line 1 by line 2. Enter the
result as a decimal (rounded to at
least three places). 3.
4. Enter the understatement of tax.* 4.
5. Enter the credits and other taxes
taken into account used to calculate
the understatement of tax and
allocated to your spouse (or former
spouse).* 5.
6. Enter the credits and other taxes
used to calculate the understatement
of tax and allocated to you.* 6.
7. Add lines 5 and 6. 7.
8. Subtract line 7 from line 4. 8.
9. Multiply line 8 by line 3. 9.
10. Add lines 6 and 9. This is your
estimate of the understatement of tax
you may be found responsible for. 10.
*This amount is shown on the Tax Department notice or audit report.
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Instructions for completing Worksheet 1
Line 1 When allocating income and deductions taken into account in computing the
understatement of tax, allocate the items in the same manner you would have
allocated the items if you (and your spouse or former spouse) had filed a
separate return.
If you filed federal Form 8814, Parent’s Election to Report Child’s Interest and
Dividends, allocate the tax liability from that income as appropriate between you
and your spouse.
You must allocate all income and deductions equally between you and your
spouse (or former spouse) unless there is clear and convincing evidence that
shows a different allocation is appropriate or the department establishes that you
had actual knowledge of the joint items. For example:
• Allocate wages and salaries to the spouse who performed the job and
received federal Form W-2, Wage and Tax Statement.
• Allocate investment income (including capital gains) according to which
spouse owned the investment.
• Allocate New York addition and subtraction modifications (such as 414(h)
retirement contributions and/or pension exclusions) to the spouse to whom
the modification belongs.
• Allocate business income and deductions according to the ownership of the
business. You generally allocate business income according to which
spouse owned the business that produced the income.
• Allocate personal deductions (such as itemized deductions for mortgage
interest and taxes).
Items limited or If a deduction would not be allowed if you had filed a separate return, calculate
not allowed on the deduction as you would on a joint return and allocate that amount equally
separate returns between you and your spouse (or former spouse).
Do the same with income and deductions (such as an IRA deduction) that are
subject to special limits on a separate return. Calculate these items as you would
on a joint return and allocate the items between you and your spouse (or former
spouse).
Example: You and your spouse filed a joint return and you both qualify for an
IRA deduction. Several months after filing the return, you received a notice from
the department for additional tax because of unreported interest and dividend
income. You would like to estimate your separation of liability so you are using
Worksheet 1.
You and your spouse both contributed to IRA accounts. If you and your spouse
had filed separate returns, the IRA deductions would have been eliminated due
to the federal limits on IRA deductions on separate returns.
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On Worksheet 1, each spouse should take the IRA deduction allowable as if you
had filed a joint return.
Items allocable If a deduction that is otherwise allocable to one spouse created a tax benefit for
to one spouse the other spouse, you must allocate that deduction to the other spouse to the
that benefit the extent the item created a benefit.
other spouse
Example: Your joint income tax return shows $50,000 of wages allocable to you,
$15,000 of self-employment income allocable your spouse, and a $20,000
deduction allocable to your spouse. The department audited your return and
disallowed the $20,000 deduction. Only $15,000 of the disallowed deduction is
allocable to your spouse (the amount that offset your spouse’s self-employment
income). The remaining $5,000 must be allocated to you because the amount
offset your income.
Lines 5 and 6 Enter the part of the understatement of tax that is due to the disallowance of a
credit or to the increase in any tax, other than income tax. Allocate credits and
other taxes as you would have if you and your spouse (or former spouse) had
filed separate returns.
Example: You reported a $750 separate tax on a lump-sum distribution. All of
this tax is allocable to you. The department audited your return and determined
that your separate tax on a lump-sum distribution should have been $1,100. On
line 6, enter the $350 increase in separate tax on lump-sum distributions
($1,100 - $750).
Credits not If a credit would not be allowed if you had filed a separate return, calculate the
allowed on credit as you would on a joint return and allocate that amount between you and
separate returns your spouse (or former spouse). Examples of credits not generally allowed on a
separate return are the child and dependent care credit and the earned income
credit.
Example: You claimed a credit of $860 for child and dependent care expenses
on your tax return. The department audited your return and allowed only $500.
Even though none of the credit would have been allowed on separate returns,
you are entitled to a $500 credit amount for purposes of estimating your
separation of liability. Allocate the $360 disallowance ($860 - $500) between you
and your spouse on lines 5 and 6.
Credits allocable If a credit that is otherwise allocated to one spouse created a tax benefit for the
to one spouse other spouse, it must be allocated to the other spouse to the extent the credit
that benefit the created a benefit.
other spouse
Example: Your joint income tax return shows $60,000 of wages attributable to
you, and a $2,000 conservation easement tax credit attributable to your spouse.
This credit was for land owned by your spouse that you have no ownership
interest in. Since your spouse had no income, the entire credit offset $2,000 of
your income tax on the joint return. You received the tax benefit from the entire
credit. The department audited your return and disallowed $400 of the credit. You
and your spouse remain jointly and severally liable for the $400 deficiency. It was
your spouse’s item and you received a $400 tax benefit.
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Sample – Case A
Completing Worksheet 1. Mary and Sam timely filed a joint income tax return (Form IT-201) for tax year
2010. They divorced May 3, 2013. On July 27, 2014, the department issued a Notice of Deficiency to Mary and
Sam for their 2010 return. The notice shows a $504 understatement of tax based on the following four items
listed on the notice:
1. $2,500 of wages that Mary did not report on the joint return.
2. $336 for a disallowed resident credit attributable to Mary.
3. $150 for an additional New York subtraction modification for interest income on U.S. government bonds
belonging entirely to Mary.
4. $500 of interest income not reported on the joint return from an account belonging entirely to Sam.
Sam decides to file Form IT-285 to request relief under separation of liability. Sam must allocate the items
between Sam and Mary as follows:
Items to allocate Sam Mary
Wages $2,500
Disallowed resident credit $ 336
New York subtraction modification on
U.S. government bonds $ 150
Interest income $500
Although not required, Sam uses Worksheet 1 to estimate the understatement of tax that is allocable to him.
He fills out the worksheet as follows (see Example of completed Worksheet 1 on page 29).
Line 1 Sam enters the $500 interest income from his bank account.
Line 2 The net amount of income and deductions used to calculate the understatement of tax is $2,850.
This is the sum of the unreported wages ($2,500) and interest income ($500), minus the additional
New York subtraction modification for interest on U.S. government bonds ($150).
Line 3 Divide line 1 by line 2 (carry the decimal to at least three places) to get .175.
Line 4 Sam enters the $504 understatement of tax as shown on the Notice of Deficiency.
Line 5 Sam enters the disallowed resident credit of $336 allocated to Mary.
Line 6 Sam enters $0 because there are no credits or taxes allocated to Sam.
Line 10 Sam completes lines 7 through 10. Line 10 estimates that Sam is responsible for $29 of the
understatement of tax. Mary would be responsible for the remaining amount ($475).
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Example of completed Worksheet 1
(Sample case A)
1. Enter the net amount of income and
deductions used to calculate the
understatement of tax and allocated
to you. 1. $500
2. Enter the net amount of all income
and deductions used to calculate the
understatement of tax.* 2. $2,850
3. Divide line 1 by line 2. Enter the
result as a decimal (rounded to at
least three places). 3. .175
4. Enter the understatement of tax.* 4. $504
5. Enter the credits and other taxes
used to calculate the understatement
of tax and allocated to your spouse
(or former spouse).* 5. $336
6. Enter the credits and other taxes
used to calculate the understatement
of tax and allocated to you.* 6. $0
7. Add lines 5 and 6. 7. $336
8. Subtract line 7 from line 4. 8. $168
9. Multiply line 8 by line 3. 9. $29
10. Add lines 9 and 6. This is your
estimate of the understatement of tax
you may be found responsible for. 10. $29
*This amount should be shown on the Tax Department notice or audit report.
Sam decides to file Form IT-285 (not illustrated) to request separation of liability. Sam does not send
Worksheet 1 with the form; he keeps it for his records only. Sam completes the entire Form IT-285 so the
department will consider all three types of relief and attaches the required statements and supporting
documentation to Form IT-285.
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Sample – Case B
Completing Form IT-285. Alice and David timely filed their joint 2011 New York State income tax return
(Form IT-201). They divorced December 12, 2012. On February 9, 2014, the Tax Department issued a Notice
of Deficiencyto Alice and David because there was $5,000 of unreported income attributable to tax year 2011.
The notice shows tax due of $350 and penalties and interest of $80.
The $5,000 in unreported income was from David’s business. The Internal Revenue Service (IRS) had
previously assessed Alice and David for the same $5,000 of unreported income on their 2011 federal income
tax return. Alice had requested and recently received innocent spouse relief from the IRS.
Alice believes she qualifies for New York State relief because:
1. Alice and David filed a joint return for tax year 2011.
2. Alice is no longer married to David.
3. Alice did not know about the $5,000 in business income that was not included on the return.
4. Alice received innocent spouse relief from the IRS for the same erroneous item for the same tax year.
Line 1 Alice marks an Xfor Yes; she is requesting relief from a liability from a joint return .
Line 2 Alice marks an Xfor No.
Line 3 Alice enters 2011; this is the tax year for which she is requesting relief.
Line 4 Alice provides an explanation and will attach the same supporting documentation she sent to the
IRS.
Line 5 Alice enters David’s name and social security number. She does not know his current address or
phone number.
Line 6 Alice marks an Xin the box that indicates she is divorced and includes the date. (She must provide
a copy of the entire divorce decree with the attachments to Form IT-285.)
Line 7 Alice marks an Xfor No.
Line 8 Alice marks an Xin the boxes that apply. She uses the explanation line to state that she had access
to a joint account for household finances, but she had no access to David’s business bank accounts
and records.
Line 9 Alice marks an Xin the boxes to indicate she gave David her Form W-2 for return preparation and
reviewed the return before she signed it.
Line 10 Alice marks an Xfor No.
Line 11 Alice marks an Xto indicate she did not know that anything was incorrect or missing. She also
explains that she had no way to know if the information reported for David’s business was correct.
Line 12a Alice marks an forX Yes. She must include a copy of federal Form 8857 with her attachments to
Form IT-285.
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Publication 89 (2/15)
Line 12b Alice marks an forX Yes. She must include a copy of the final federal determination with her
attachments to Form IT-285.
Alice does not complete the allocation schedule on page 4 because she does not have the specific information
she needs. She signs Form IT-285, and attaches all required supporting documentation and statements as
required by the instructions for the form. She explains why she feels she qualifies for relief, why she did not
know about David’s unreported business income, and documentation from the IRS that shows the $5,000
understatement was attributable to David. She also states that holding her liable for the tax due would cause
an economic hardship because of a lack of child support from David and excessive medical expenses.
Note: Filing Form IT-285 to request relief will not extend the deadline to protest the notice of deficiency. If Alice
wishes to protest the notice of deficiency, she must also file a Request for Conciliation Conference with the Tax
Department’s Bureau of Conciliation and Mediation Services or petition for a hearing in the Division of Tax
Appeals within the time limit specified in the notice. The request should include the same information that
supports Alice’s request for relief from the joint liability, including when and why she filed or plans to file
Form IT-285. (Also see If youon page 16 .) disagree with the Tax Department’s decision
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Department of Taxation and Finance
Request for Innocent Spouse Relief IT-285(9/15)
(and Separation of Liability and Equitable Relief)
Important: Do not file this form with your income tax return. See Where to file on page 4.
Your first name and middle initial Your last name Your social security number
Alice Smith 111-22-3333
Mailing address (number and street or PO box) Apartment number
1 Main Street
City, village, or post office State ZIP code Daytime phone number Evening phone number
Anytown NY 11111 ( 444) 555-6666 ( )
Important notes:
– See the instructions, Form IT-285-I, and our Web site for information on the types of relief available.
– By law, the Tax Department must contact the person who was your spouse during the years for which you want relief. There are no
exceptions, even for victims of spousal abuse or domestic violence. Your personal information (such as your current name, address,
and employer) will be protected. However, if you petition the Division of Tax Appeals, your personal information may be released. See
instructions.
1 Are youX requesting relief from a liability that resulted from a jointly filed return? Mark an in the appropriate box.
Yes. Go to line 2. No. Stop. You cannot file Form IT-285.
2 Are you requesting that all or part of your share of a joint refund, that was (or will be) applied against your spouse’s past-due debt
(such as child support), be refunded to you?
Yes. Stop. Use Form IT-280, Nonobligated Spouse Allocation, No. Go to line 3.
to make this request. Do not use Form IT-285.
3 Enter the tax year(s) for which you are requesting relief from liability for tax. (Form IT-285 must be
used for tax years beginning on or after January 1, 1999. For relief from a joint liability for prior
years, see General information in the instructions.) ................................................................. 3 2011
Note: If the answers are not the same for each of the following questions for all tax years for which you are filing
this form, submit an explanation (be sure to include your name and social security number).
4 Explain why you believe you qualify for relief. You must submit a statement and appropriate supporting documentation (see instructions).
I am no longer married to David. I did not know anything about his business finances.
(continued)
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Page 2 of 4 IT-285 (9/15)
5 Information, if known, about your spouse (or former spouse) to whom you were married at the end of the year(s) on line 3.
First name and middle initial Last name Social security number
David Smith 222-33-4444
Mailing address (number and street or PO box; see instructions) Apartment number
unknown
City, village, or post office State ZIP code Daytime phone number Evening phone number
( ) ( )
6 What is the current marital status between you and the person on line 5?
Married and still living together
Married and living apart since (mm-dd-yyyy) ..................................................................................
Widowed since (mm-dd-yyyy)
(Include a photocopy of the death certificate.) ..................................................................................
Legally separated since (mm-dd-yyyy)
(Include a photocopy of your entire separation agreement.) ...............................................................
Divorced since (mm-dd-yyyy)
(Include a photocopy of your entire divorce decree.) ......................................................................... 12-12-2012
Note: A divorce decree stating that your former spouse must pay all taxes does not necessarily mean you qualify for relief.
7 Were you a victim of spousal abuse or domestic violence, or suffering the effects of such abuse during the tax years for which you
are requesting relief or when any of the returns were filed for those years?
Yes. See instructions. No.
8 For the years for which you want relief, how were you involved in the household finances? Mark all that apply.
You were not involved in handling money for the household. Explain below.
You knew the person on line 5 had separate accounts.
You had joint accounts but you had limited use of them or did not use them. Explain below.
You used joint accounts. You made deposits, paid bills, balanced the checkbook, or reviewed the monthly bank statements.
You made decisions about how money was spent. For example, you paid bills or made decisions about household purchases.
Other:
Explain anything else you want to tell us about your household finances: We had a joint checking account to pay household bills.
I could write checks but I did not balance the account. I had no access to David's business accounts. I did not see bank
statements for any of the checking accounts.
(continued)
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IT-285 (9/15) Page 3 of 4
9 How were you involved with preparing your tax return(s)? Mark all that apply and explain, if necessary.
You were not involved in preparing the returns.
You filled out or helped fill out the returns.
You gathered receipts and canceled checks.
You gave tax documents (such as federal Forms W-2, 1099, etc.) for the preparation of the returns.
You reviewed the returns before they were filed.
You did not review the returns before they were filed. Explain below.
You did not know a joint return was filed.
Other:
Explain: I gave David my W-2 form and reviewed the return before I signed it. I had no way of knowing if the numbers
for David's business were correct.
10 When the returns were filed, did you know any amounts were due to New York State?
Yes No If Yes, explain when and how you thought the amount of tax reported on your return would be paid:
11 When the returns were filed, what did you know about any incorrect or missing information? Check all that apply and explain, if
necessary.
You knew something was incorrect or missing, but you said nothing. Explain below.
You knew something was incorrect or missing, and asked about it. Explain below.
You did not know anything was incorrect or missing.
Not applicable. There was no incorrect or missing information.
Explain:
12a Did you file federal Form 8857, Request for Innocent Spouse Relief, with the IRS for the same tax year(s) and with the same
missing or incorrect items on your return(s) for which you are filing this form?
Yes. Include a copy of your Form 8857 and continue with line 12b.
No. Continue with the Allocation of items between spouses schedule.
12b Did you receive a final determination from the IRS granting you Innocent Spouse relief under IRC section 6015(b)?
Note: Other types of relief can be granted by the IRS. If you are unsure which type of relief you were granted, mark the No box
or contact the IRS to determine the type of relief you were granted.
Yes. Include a copy of the final determination. Sign the form and see Where to file on page 4.
Do not complete the Allocation of items between spouses schedule.
No. Complete the Allocation of items between spouses schedule.
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Allocation of items between spouses
If filing for more than one tax year, complete a separate schedule for each year. Include copies of all federal Forms W-2, all federal
schedules, and copies of any notices from the New York State Tax Department.
If youX do not have specific information to complete the allocation schedule, mark an in the box and see instructions.
a –Allocated to b –Allocated to yourc –Total of
Allocated items you spouse or former spouse column a plus column b
13 Enter the tax year covered by this schedule
14 Wages ..............................................................................
15 Interest and dividends ......................................................
16 Business income ..............................................................
17 All other income. Identify the type and amount below.
Line 17 total ...
18 Federal adjustments to income. Allocate separate
adjustments, such as an IRA deduction, to the spouse to
whom they belong .............................................................
19 New York adjustments to income. Allocate separate
adjustments, such as 414(h) contributions and/or pension
exclusions, to the spouse to whom they belong................
20a Estimated tax payments (see instructions) ..........................
b Payment made with extension Form IT-370 or using
the online application ........................................................
c Payments made with return ..............................................
d Payments made on assessments (bills)............................
21 Income tax withheld. Allocate New York State/New York
City/Yonkers income tax withheld to each spouse as
shown on federal Forms W-2. Be sure to submit copies
of these forms with this Form IT-285 .................................
▼ Paid preparer must complete (see instr.) ▼ Date ▼ Taxpayer sign here ▼
Your signature
Preparer’s signature Preparer’s NYTPRIN
(or yours, if self-employed) Preparer’s PTIN or SSN Date
Firm’s name
Daytime phone number
Address Employer identification number ( )
E-mail:
NYTPRIN
excl. code
Keep a copy of this form for your records.
E-mail:
Where to file
Generally, you should send this form to: NYS Tax Department, Protest Correspondence Unit, W A Harriman Campus,
Albany NY 12227-5120. But, if you are meeting with a Department of Taxation and Finance employee, or you received a notice of
deficiency, or you are using a private delivery service, see instructions. If you would like the Tax Department to correspond with your
representative, you must complete and submit a power of attorney.
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Publication 89 (2/15)
Sample - Case C
Completing Form IT-285 (Allocation of items between spouses). Michael and Sue filed a joint 2010
New York State income tax return (Form IT-201). They divorced November 28, 2011. On July 10, 2013, the
Tax Department issued a Notice of Deficiency to Michael and Sue for tax year 2010 for additional tax due of
$801 plus penalty and interest. The deficiency is the result of $12,100 in income that was not reported on their
2010 joint return.
The understatement of tax is based on these following items not reported on the joint return:
1. $200 of wages that Sue earned.
2. $900 of dividends from stocks that belonged solely to Michael.
3. $11,000 Michael received as a cash prize from a contest.
Sue believes she may qualify for relief because:
• She filed a joint return with Michael for tax year 2010.
• She is no longer married to Michael.
• She did not know about the stocks belonging to Michael or the $11,000 cash prize that Michael received.
To request relief, Sue must file Form IT-285 with the department. Michael and Sue’s original joint return
reported $50,000 in wage income from Michael’s job and $2,000 in taxable interest and dividends from jointly
held accounts. On lines 13 through 21 of Form IT-285, Sue must allocate these items and the additional items
from the Notice of Deficiency.
Sue completes the applicable lines in the Allocation of items between spouses section ,columns a and b, as
follows:
Line 13 Sue enters 2010.
Line 14 Column a – Sue enters $200 for the wages she earned but did not report (the amount from the
deficiency)
Column b – Sue enters $50,000 for the wages Michael earned that were reported on the original
return.
Line 15 Column a – Sue enters $1,000 for her share of the interest and dividends that were reported on the
original return.
Column b – Sue enters $1,900 for Michael’s share of interest and dividends ($1,000 for his share
of the amount that was originally reported on the return plus $900 from the deficiency).
Line 17 Column a – Sue enters $0.
Column b – Sue enters $11,000 for the cash prize won by Michael (the amount from the
deficiency).
Line 21 Column a – Sue enters $0.
Column b – Sue enters $2,780 as shown on Michael’s 2010 federal Form W-2.
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Publication 89 (2/15)
Sue attaches a statement and supporting documentation as required by the instructions for Form IT-285. The
statement includes why she feels she qualifies for relief from the joint liability, why she did not know about the
dividend income, and documentation that shows that the $11,000 cash prize was won by Michael while he was
at a sporting event she did not attend. She states that holding her liable for the tax due would cause an
economic hardship since she is only able to work part-time because she has to care for a disabled family
member.
Note: Filing Form IT-285 to request relief will not extend the deadline to protest the notice of deficiency. If Sue
wishes to protest the notice of deficiency, she must also file a Request for Conciliation Conference with the Tax
Department’s Bureau of Conciliation and Mediation Services or petition for a hearing in the Division of Tax
Appeals within the time limit specified in the notice. The request should include the same information that
supports Sue’s request for relief from the joint liability, including when and why she filed or plans to file
Form IT-285. (Also see If youon page 16 .) disagree with the Tax Department’s decision
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Page 4 of 4 IT-285 (9/15)
Allocation of items between spouses
If filing for more than one tax year, complete a separate schedule for each year. Include copies of all federal Forms W-2, all federal
schedules, and copies of any notices from the New York State Tax Department.
If youX do not have specific information to complete the allocation schedule, mark an in the box and see instructions.
a –Allocated to b –Allocated to yourc –Total of
Allocated items you spouse or former spouse column a plus column b
13 Enter the tax year covered by this schedule 2010
14 Wages .............................................................................. 200.00 50000.00 50200.00
15 Interest and dividends ...................................................... 1000.00 1900.00 2900.00
16 Business income ..............................................................
17 All other income. Identify the type and amount below.
Cash prize
Line 17 total ... 0.00 11000.00 11000.00
18 Federal adjustments to income. Allocate separate
adjustments, such as an IRA deduction, to the spouse to
whom they belong .............................................................
19 New York adjustments to income. Allocate separate
adjustments, such as 414(h) contributions and/or pension
exclusions, to the spouse to whom they belong................
20a Estimated tax payments (see instructions) ..........................
b Payment made with extension Form IT-370 or using
the online application ........................................................
c Payments made with return ..............................................
d Payments made on assessments (bills)............................
21 Income tax withheld. Allocate New York State/New York
City/Yonkers income tax withheld to each spouse as
shown on federal Forms W-2. Be sure to submit copies
of these forms with this Form IT-285 ................................. 0.00 2780.00 2780.00
▼ Paid preparer must complete (see instr.) ▼ Date ▼ Taxpayer sign here ▼
Your signature
Preparer’s signature Preparer’s NYTPRIN
(or yours, if self-employed) Preparer’s PTIN or SSN Date
Firm’s name
Daytime phone number
Address Employer identification number ( )
E-mail:
NYTPRIN
excl. code
Keep a copy of this form for your records.
E-mail:
Where to file
Generally, you should send this form to: NYS Tax Department, Protest Correspondence Unit, W A Harriman Campus,
Albany NY 12227-5120. But, if you are meeting with a Department of Taxation and Finance employee, or you received a notice of
deficiency, or you are using a private delivery service, see instructions. If you would like the Tax Department to correspond with your
representative, you must complete and submit a power of attorney.
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| New York State Tax Department Online Services Create an Online Services account and log in to: • make payments • file certain returns and other tax forms • view your account and filing information • change your address • receive email notifications • respond to bills and notices Access is available 24 hours a day, 7 days a week (except for scheduled maintenance). www.tax.ny.gov |
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Publication 89
(2/15)
Need help?
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Visit our Web site at www.tax.ny.gov hearing and speech disabilities using a TTY): If you
• get information and manage your taxes online have access to a TTY, contact us at (518) 485-5082.
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To order forms and publications: (518) 457-5431 the information center.
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