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TAX PRACTICE & PROCEDURES
Updates and guidance on key
IRS practice developments.
Editor: referred to as the traditional claim, as
Valrie Chambers, CPA, Ph.D. Individuals it was part of the Internal Revenue
Code (with narrower relief) prior to
Three paths to innocent the expansion of innocent spouse relief
spouse relief in 1998.
Taxpayers who file “married filing The critical issues in meeting
Assess all the facts jointly” become jointly and severally this section are regularly whether
and circumstances liable for the tax that is due when the the requesting spouse did not know,
and had no reason to know, that
return is filed and for any subsequent
to determine which increases to tax (Sec. 6013(d)(3)). there was a potential understatement
of three avenues Often, one taxpayer is surprised to find and that it would be inequitable to
out that the tax reflected on the return
hold the requesting spouse liable for
should be pursued was not paid (or the return was delin- the deficiency.
for innocent spouse quently filed) or that an examination A taxpayer has reason to know of
relief; extensive has led to a large increase to tax. the understatement if a reasonably
There are three avenues for the
prudent taxpayer could be expected
documentation is unsuspecting spouse to request relief to know that the return contained the
required for claiming from the unpaid tax. They are the understatement (Briley, T.C. Memo.
2019-55). A taxpayer who signs a
“traditional” innocent spouse claim, the
two employment split or allocation of the deficiency, and return is generally charged with con-
tax credits enacted a request for equitable relief. structive knowledge of its contents. A
requesting spouse must establish that
to support the The ‘traditional’ innocent he or she was unaware, and had no
economy during the spouse claim reason to know, of the facts that gave
COVID-19 crisis. If an additional assessment arises, Sec. rise to the error; it is not enough to
be unaware of the tax consequences.
6015(b) can provide relief from joint
and several liability where there is an In short, Sec. 6015 does not protect a
understatement of tax attributable to spouse who turns a blind eye. Factors
erroneous items of one spouse. Under to be considered in making this deter-
this provision, the spouse requesting mination are:
relief (the “requesting spouse”) must 1. The requesting spouse’s level of
establish that in signing the return education;
the requesting spouse did not know, 2. The requesting spouse’s involve- PHOTO BY SEAN GLADWELL/HEMERA/THINKSTOCK
and had no reason to know, that there ment in the family’s business and
was a possible understatement and financial affairs;
that it would be inequitable to hold 3. The presence of expenditures that
the requesting spouse liable for the appear lavish or unusual when
deficiency. Sec. 6015(b) is commonly compared to the family’s past levels
34 January 2022 The Tax Adviser
