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of income, standard of living, and
spending patterns; and Sec. 6015(c) provides another avenue for relief
4. The culpable spouse’s evasiveness
and deceit concerning the couple’s from joint and several liability from an audit
finances (see Hayman, 992 F.2d assessment by making it possible to elect
1256, 1261 (2d Cir. 1993), aff ’g separate liability.
T.C. Memo. 1992-228; Butler, 114
T.C. 276, 284 (2000)).
As to the first factor, level of edu- relief. A surviving spouse can make this than two years after the date that the
cation, it is the requesting spouse’s election if his or her spouse died more IRS begins collection activity (Secs.
understanding of finances and tax, and than 12 months before the election. 6015(b)(1)(E) and (c)(3)(B)). Regs.
not the level of academic achievement, If the requesting spouse is eligible Sec. 1.6015-5(b)(2)(i) defines col-
that is determinative of the requesting to make this election, he or she is liable lection activity as a Sec. 6330 notice;
spouse’s eligibility for relief (Wang, T.C. for the amount of tax that arises (or an offset of a refund of the request-
Memo. 2014-206). should have arisen) from the request- ing spouse; the filing of a suit by the
As to the second and third factors ing spouse’s separate income and United States against the requesting
— involvement in the family’s financial deductions at the time the return(s) spouse for the collection of the joint
affairs and level of expenditure — great were filed. If the requesting spouse is tax liability; or the filing of a claim by
weight is given to whether the family’s successful, the deficiency is allocated by the United States in a court proceed-
lifestyle exceeds what could be reason- the ratio of the net amount of errone- ing in which the requesting spouse
ably expected from the information ous items allocable to the requesting is a party or that involves property
reported on the return(s). spouse divided by the net amount of all of the requesting spouse. The term
While all the facts and circumstanc- erroneous items. “property of the requesting spouse” is
es are considered (Sec. 6015(d)(3)(B)), To qualify for relief, the requesting defined to mean property in which the
the court holdings show that a critical spouse must lack actual knowledge of requesting spouse has an ownership
concern is whether the requesting the facts involving the erroneous item interest (other than solely through
spouse significantly benefited, directly or items. The IRS has the burden of the operation of community property
or indirectly, from the understatement proving actual knowledge. laws), including property owned jointly
of tax. A significant benefit is any Relief will not be granted if spouses with the nonrequesting spouse. Collec-
benefit in excess of normal support. transferred assets to each other as part tion activity does not include a notice
Mortgage payments on a middle-class of a fraudulent scheme or to avoid tax of deficiency, the filing of a Notice of
home are considered normal support. or the payment of tax. A rebuttable Federal Tax Lien, or a demand for pay-
The receipt of property (including life presumption is established that an ment of tax.
insurance proceeds) by the requesting asset transfer from the nonrequesting A claim for relief can also be filed
spouse that is beyond normal support spouse to the requesting spouse during once a liability is proposed during an
and that can be traced to items omitted the 12-month period before the mail- examination, as part of a petition to
from gross income and attributable to ing date of the first letter of proposed the U.S. Tax Court for a redetermina-
the nonrequesting spouse, can be con- deficiency (whether a 30-day letter or tion of the Service’s assessment of tax,
sidered as a significant benefit (Regs. a notice of deficiency) is a disqualified and as part of a Collection Due Pro-
Sec. 1.6015-2(d)). asset transfer, but this presumption cess hearing.
will not apply to any transfer pursu-
Election to split or allocate the ant to a decree of divorce or separate A request for equitable relief
deficiency maintenance or a written instrument The third avenue that may be available
Sec. 6015(c) provides another avenue incident to such a decree (Sec. 6015(c) to an unsuspecting spouse is to request
for relief from joint and several liability (4)(B)(ii)). equitable relief. Sec. 6015(f) provides
from an audit assessment by making relief for unpaid tax or a deficiency
it possible to elect separate liability. To Time limit to seek these types when it would be equitable to do so and
do so, the requesting spouse must be of relief when relief is unavailable under Sec.
divorced, legally separated, or living Both a “traditional” innocent spouse 6015(b) or (c). Significantly, this sec-
apart from his or her spouse during the claim and an election to split/allocate tion provides relief for amounts owed
12 months preceding the request for the deficiency must be made no later when the return was filed. The Service

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