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IRS Eases Restrictions On Innocent Spouses

The IRS recently announced that they would be easing the 2 year deadline on taxpayers seeking innocent spouse relief.  A taxpayer who is a party to a joint tax return and later requests innocent spouse relief may be relieved of responsibility for paying taxes, interest, and penalties if their spouse (or former spouse) improperly reported or omitted items on their returns.  If a taxpayer qualifies for innocent spouse relief then the taxes, interest, and penalties at issue can only be collected from the spouse who is deemed responsible.

The previous 2 year limitation began to run from the date of the first collection notice issued by the IRS to the taxpayers.  This restriction had been criticized as failing to properly account for spouses who had been subjected to conditions that would reasonably cause them to fail to know about the issuance of collection notices or those who were fearful of filing for innocent spouse treatment due to circumstances such as domestic abuse.  Previously, the IRS had been successful in defending the two year limitation in court, so any change to this policy had to come from within the agency.  According to IRS Commissioner Doug Shulman, “[i]n recent months, it became clear to me that we need to make significant changes involving innocent spouse relief.  This change is a dramatic step to improve our process to make it fairer for an important group of taxpayers.  We know these are difficult situations for people to face, and today’s change will help innocent spouses victimized in the past, present and the future.”

The change will apply to current, as well as past cases, where the taxpayer has been denied an innocent spouse claim simply because of the two year restriction.  In the press release announcing the change, the IRS invited those who had been previously denied relief due to their failure to meet the 2 year deadline to reapply using IRS Form 8857.  Interested taxpayers may also consult Publication 971 for more information.

If you are currently seeking innocent spouse treatment, have been denied innocent spouse treatment in the past or need assistance with any other tax issue, contact an Attorney in Jacksonville to see how we can help you today.