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HB 716

Income tax, state; innocent spouse tax relief.

2026 Regular Session

Virginia bill creates innocent spouse tax relief allowing joint filers unaware of partner's underreporting or improper deductions to claim separate liability for state income taxes.

Fiscal Impact statement From TAX (3/11/2026 2:16 pm)
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Bill Summary · HB 716

Legislative bill overview

HB 716 provides tax relief to Virginia taxpayers who filed joint returns but claim they were unaware of or did not participate in underreporting income or claiming improper deductions by their spouse. The bill establishes a mechanism for "innocent spouse" claims under state income tax law, similar to federal protections that exist under IRS rules.

Why is this important

This addresses a real problem where married couples filing jointly can both face liability for tax deficiencies even when only one spouse acted fraudulently or negligently. Without such protections, a spouse can face substantial tax bills, penalties, and interest for actions they didn't know about or authorize. The bill aligns Virginia law with existing federal innocent spouse provisions, potentially affecting hundreds of taxpayers annually.

Potential points of contention

  • Verification challenges: Determining what one spouse "knew or should have known" is inherently difficult and could generate disputes, requiring subjective judgments by tax officials
  • Revenue impact: Expanding tax relief mechanisms may reduce state revenue, particularly if coupled with penalty waivers that are part of innocent spouse relief
  • Definition scope: The bill's specific criteria for qualification (burden of proof, timeline for claims, types of tax issues covered) will determine whether relief is narrowly targeted or broadly available

Compiled from official sources — confirm details with the bill’s official record.

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