Tax Law FAQ

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Am I an innocent spouse?

Are you an individual who claims to be an innocent spouse? Perhaps you are going through a divorce and are concerned about being held responsible for your spouse’s tax liabilities, which you did not know about. Although your divorce attorney may be negotiating a divorce decree or other legally binding agreement in state court that will allocate responsibility to pay the taxes between you and your spouse, you may be surprised to learn that the IRS is not bound by a state court order and can still take collection against one or both spouses. An option that does exist, however, is the innocent spouse provisions of the Internal Revenue Code.

Section 6015(f) authorizes the IRS to grant equitable relief from joint and several liability if, taking into account all the facts and circumstances, it is inequitable to hold the individual taxpayer liable for the unpaid tax or any income tax deficiency arising from a jointly filed return.

Rev. Proc. 2013-34, 2013-43 IRB 397, provides guidance for taxpayers seeking equitable relief from income tax liability under section 66(c) or 6015(f). Most notably, the IRS now gives greater deference to the presence of abuse or financial control by the non-requesting spouse. It also recognizes that abuse can come in many forms, including physical, psychological, sexual, or emotional abuse. The IRS acknowledges that abuse or financial control may mitigate other factors that might otherwise weigh against granting equitable relief. This and other significant policy changes are a breath of fresh air to taxpayers seeking relief from unpaid taxes because of a former spouse who was abusive or maintained control over the household finances by restricting access to financial information.

The revenue procedure was preceded by a chief counsel notice, CC-2013-011, providing litigation guidance for cases involving claims for relief under section 6015(f). The notice discusses important policy changes and new procedural rules regarding how the IRS Office of Chief Counsel handles section 6015(f) cases docketed in the Tax Court.

Both Rev. Proc. 2013-34 and CC-2013-011 are important documents for practitioners to read when counseling clients on innocent spouse cases. The rules are less rigid and consider all the facts and circumstances of a particular case. Thus, individuals who believe they may be entitled to equitable relief under section 6015(f) may now have a greater chance of success at the administrative and judicial levels.

Individuals, who believe that they may be entitled to innocent spouse relief, should contact competent tax counsel who can evaluate the case, explain the options, and develop a defensible strategy.

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