If you are representing clients in divorce proceedings, innocent spouse relief can help you to protect your clients from liability for underpayment or nonpayment of taxes caused by their spouse’s dishonesty. Innocent spouse relief provides an important source of relief from tax debt, but until recently, there were significant limitations on when innocent spouse tax relief could be claimed. The IRS recently lifted some of these limitations and the changes that were made can help you to make sure your client doesn’t become unfairly burdened with his or her spouse’s tax debts.
On July 25, 2011 the IRS issued Notice 2011-70, which made a significant change to the requirements for those seeking innocent spouse relief under (IRC Section 6015(f). IRS Commissioner Douglas Shulman indicated that the change was made because “when people are in tough circumstances, we [The IRS] need to be willing to work with them.” Taxpayer Advocate Nina Olson has indicated that the change was a “a welcome occasion where everybody has emerged a winner.”
The changes made by the IRS are simple – they extended the eligibility period for those seeking equitable relief, lifting the previously enforced two-year limit.
Mark S. Gottlieb recently wrote a white paper entitled, An Attorney’s Guide to the Recent IRS Changes Regarding Innocent Spouse Relief. This is a must read for all matrimonial and family law practitioners.
This white paper is part of a 3 part special issue for all matrimonial practitioners.
Part 1 – An Attorney’s Guide to Divorce-Related Tax Issues.
Part 2 – An Attorney’s Guide to the Recent I.R.S. Changes Regarding Innocent Spouse Relief.
Part 3 – An Initial Document Request for Valuation & Litigation Services.