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IRS Expands Availability of Innocent Spouse Relief

Posted on December 18th, 2012 by The Red Headed Lawyer

Original Article by Stephen J. Dunne for Forbes

Many couples going through a divorce find themselves in trouble when filing taxes jointly. When one spouse makes enough money to cover their own taxes, but the other doesn’t, then a problem could arise. Because of the prevalence of this issue, the IRS is now making innocent spouse relief more broadly available.

Internal Revenue Code § 6015 empowers the Commissioner of Internal Revenue to relieve a spouse from liability for a joint income tax return. The IRS issued Revenue Procedure 2003-61 to interpret IRC § 6015, and provide procedure for seeking relief under it. But the IRS and the U.S. Tax Court applied Rev. Proc. 2003-61 strictly, narrowly, denying relief to deserving spouses.

In January, 2012, the IRS issued Notice 2012-8, immediately effective, making innocent spouse relief more broadly available. Indeed the IRS is applying Notice 2012-8 in spirit, as we are seeing a marked increase in applicants granted innocent spouse relief. In one recent case, the applicant was denied relief by the IRS Innocent Spouse Office, but later granted innocent spouse relief by the IRS Appeals Office.

If you are filing jointly with your spouse and are seeking a divorce, then please contact the Essex Law Firm to make sure you are receiving the full benefit of innocent spouse relief.