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TAX MATTERS

to relief because she “had no dealings “taking into account all the facts and
with Oasys.” An IRS settlement officer circumstances, it is inequitable to hold
submitted the innocent-spouse relief the individual liable for any unpaid tax
request to the Cincinnati Centralized or any deficiency (or any portion of
Innocent Spouse Operation, which either).”
informed Chavis she did not meet the The Tax Court concluded that Sec.
basic eligibility requirements for Sec. 6015(f), like Secs. 6015(b) and 6015(c),
6015 relief because her request related to only applies to joint income tax liabili-
payroll tax liabilities rather than a jointly ties. In Rev. Proc. 2013-34, the IRS set
filed income tax return. out the procedures governing equitable
After considering several other issues, relief, which the court stated confirm
the IRS sustained the lien filing. Chavis that Sec. 6015(f) only applies to joint
Innocent-spouse relief petitioned the Tax Court to review the income tax liabilities. The court found
unavailable for TFRP, IRS’s determination to uphold the filing further support for its position in Regs.
of the NFTL against her.
Sec. 1.6015-1(a)(1)(iii), which states
Tax Court holds Issues: Among other issues, Chavis that Sec. 6015(f) only applies to “joint
Relief is only available for income continued to argue in Tax Court that and several liability for Federal income
tax,” and H.R. Rep’t No. 105-599, 105th
she was entitled to Sec. 6015 innocent-
tax liabilities on a joint return.
spouse relief with respect to the TFRP. Cong., 2d Sess., 254 (1998), which states
By Paul Bonner Holding: The Tax Court held that that Sec. 6015(f) applies only to “any
Chavis did not qualify for innocent- unpaid tax or deficiency arising from a
A taxpayer could not claim innocent- spouse relief from a TFRP under Sec. joint return.” Thus, although a TFRP
spouse relief under Sec. 6015 for a 6015(b), 6015(c), or 6015(f) because liability is a form of “unpaid tax,” since
Sec. 6672 trust fund recovery penalty relief under those provisions applies the liability did not arise from a joint
(TFRP) because Sec. 6015 applies only only to liabilities shown on jointly filed return, the court concluded that Chavis
to income tax liabilities on a jointly filed income tax returns. was also not entitled to relief under Sec.
return, the Tax Court held. The Tax Court first considered 6015(f).
Facts: Angela M. Chavis was secre- innocent-spouse relief under Secs. ■ Chavis, 158 T.C. No. 8 (2022)
tary of record, and her then-husband was 6015(b) and (c), which both by their
president, of Oasys Information Systems terms only allow relief to be granted — Paul Bonner is the JofA’s editor, tax.
Inc., which withheld payroll taxes from from liabilities shown or that should
Damages limited in
its employees’ wages but did not remit have been shown on a joint federal
them to the government. The IRS in income tax return. The court found IRS’s willful violation of
2015 notified the couple of its proposed that Chavis’s TFRP liabilities were not
bankruptcy discharge
assessment of a TFRP against each of shown on a joint federal income tax
them for the unpaid payroll taxes, which return and did not result from the filing
totaled $146,682 over nine calendar of such a return. Instead, the court deter- The IRS failed to take proper
quarters between 2011 and 2014. Chavis mined that her TFRP liabilities resulted precautions to abate a couple’s
signed a postal form acknowledging from her failure, as an officer of Oasys, discharged tax debt, a bankruptcy
receipt of the notice but did not appeal to ensure that the payroll taxes that the court holds, but it denies
the assessment. In November 2015 the company collected from its workers were attorneys’ fees.

IRS assessed the TFRP against her. properly paid over to Treasury. Thus,
By Paul Bonner
In 2019, the IRS issued Chavis a Chavis was not eligible for innocent-
Notice of Federal Tax Lien (NFTL) spouse relief under Sec. 6015(b) or (c). A bankruptcy court held that the IRS’s
showing an unpaid balance of $126,919 Having determined that Secs. repeated collection notices and delays IMAGE BY ILLUSTRATOR DE LA MONDE/GETTY IMAGES
on account of Oasys’s payroll tax 6015(b) and (c) did not apply, the Tax in abating a couple’s tax debts that had
liability. Chavis timely requested a Court then considered Sec. 6015(f). been discharged in bankruptcy willfully
Collection Due Process hearing and Under this provision, the IRS may allow violated the discharge, entitling the
filed Form 8857, Request for Innocent equitable relief to a taxpayer who does couple to damages under Sec. 7433. But
Spouse Relief, claiming she was entitled not qualify under Sec. 6015(b) or (c) if, the court limited the award to penalties

34 | Journal of Accountancy September 2022