Page 38 - TaxAdviser_2022

TAX PRACTICE & PROCEDURES

administrative record established at the
Sec. 6015(f) provides relief for unpaid tax time of the determination and any ad-
ditional newly discovered or previously
or a deficiency when it is equitable to do unavailable evidence.
so and when relief is unavailable under Expect a rigorous review
Sec. 6015(b) or (c). Taxpayers who face unexpected tax li-

abilities have avenues to request relief
from the liabilities. In making a claim,
a taxpayer should expect a rigorous
has issued Rev. Proc. 2013-34, detailing (5) significant benefit; (6) compliance review of the facts from the Service.
qualification for this relief. with income tax laws; and (7) mental From Timothy Burke, CPA, J.D.,
The revenue procedure establishes or physical health. No single factor LL.M., Braintree, Mass.
seven threshold requirements to be is determinative, and the IRS weighs
considered for relief: and considers all these factors and can
1. The requesting spouse filed a joint assign varying weight to each factor or Credits Against Tax
return for the tax year for which include other factors, depending on the
relief is sought; specific facts and circumstances of each Documenting COVID-19
2. Relief is not available to the re- case (Rev. Proc. 2013-34, §4.03). employment tax credits
questing spouse under Sec. 6015(b) A request for equitable relief can be COVID-19 legislation enacted in
or (c); filed during the period that the IRS March 2020 created significant
3. The claim for relief is timely filed; can collect the tax under Sec. 6502 or, temporary employment tax credits
4. No assets were transferred between if the tax has been paid, during the to help employers continue to pay
the spouses as part of a fraudulent time when the taxpayer may submit a workers even if they were unable to
scheme; claim for refund or credit of such pay- work due to illness, child care needs,
5. The nonrequesting spouse did not ment under Sec. 6511. or reduced business activity. The first
transfer disqualified assets to the credits, created by the Families First
requesting spouse; How to file for relief; appeal Coronavirus Response Act (FFCRA),
6. The requesting spouse did not rights P.L. 116-127, were for paid sick and
knowingly participate in the filing To request relief of any of the types family leave provided by employers
of a fraudulent joint return; and discussed above, use Form 8857, with fewer than 500 employees. The
7. Absent certain enumerated excep- Request for Innocent Spouse Relief. A re- Coronavirus Aid, Relief, and Economic
tions, the tax liability from which quest can also be made as part of a U.S. Security (CARES) Act, P.L. 116-136,
the requesting spouse seeks relief Tax Court petition under the Taxpayer created the employee retention credit
is attributable to an item of the First Act, P.L. 116-25. (ERC), available to all businesses that
nonrequesting spouse (Rev. Proc. In the event the request for innocent continued to pay workers during the
2013-34, §4.01). spouse relief is denied, a requesting pandemic and met specific criteria.
Where a requesting spouse meets spouse is entitled to an administrative This item focuses on documen-
the threshold conditions, he or she is appeal. A requesting spouse can petition tation required in claiming these
eligible for equitable relief if, taking the Tax Court (a stand-alone petition) COVID-19 employment tax credits.
into account all the facts and circum- within 90 days after the date of the It does not delve into the operational
stances, it would be inequitable to hold Service’s notice of final determination details. For that, see other articles in
the requesting spouse liable for the denying relief. If the IRS does not act The Tax Adviser, AICPA member re-
deficiency. The IRS takes into account upon the request, the requesting spouse sources, and, of course, the public laws
the following factors when determin- can petition the court six months after and guidance from the IRS. The table,
ing whether to grant equitable relief: the date the request for relief is filed, “Summary of Key Elements of the
(1) marital status; (2) economic hard- and not later than 90 days after the IRS COVID-19 Employment Tax Cred-
ship; (3) in the case of an understate- sends a notice of final determination its,” provides a brief summary of the
ment, knowledge or reason to know of denying relief. FFCRA and CARES Act employment
the items giving rise to the understate- The Tax Court’s scope of review tax credits as enacted and as modified
ment or deficiency; (4) legal obligation; is de novo and is based upon the by later laws.

36 January 2022 The Tax Adviser