Under what condition is the IRS likely to grant innocent spouse relief?

The scenario in which the IRS is likely to grant innocent spouse relief occurs when one spouse is genuinely unaware of the other spouse's tax misreporting. This relief is designed to protect a spouse from being held liable for the tax deficiencies resulting from the other spouse's actions, particularly if they had no knowledge of the misrepresentation and were unaware that the information provided on their joint return was incorrect.

Innocent spouse relief is particularly focused on fairness; it ensures that individuals who did not participate in or were not aware of any wrongdoing can avoid the negative consequences, such as additional taxes, penalties, and interest, associated with their spouse's tax issues. The IRS considers factors such as the level of involvement in the financial decisions and whether the innocent spouse was deceived or misled.

The other options, while related in some form, do not meet the specific criteria established by the IRS for granting this type of relief. Joint agreements, the occurrence of an audit, or merely filing for an extension do not automatically qualify one for innocent spouse relief, as they do not address the knowledge aspect of the misreporting.