Equitable Relief Changes The IRS’ updates to Sec 6015 (f) now make receiving innocent spouse relief more probable. With tens of thousands every year in the United States filing for innocent spouse relief, the significance of these changes is non-debatable. The new tax relief specifically extends to qualifying requesting spouses in Sec 6015 (f) – equitable relief. Historically, equitable relief allowed taxpayers another qualifying option if unable to meet criteria under Sec 6015 (b) – traditional innocent spouse relief or Sec 6015 (c) – allocation of liability. The changes of equitable relief lie in Rev. Proc. 2013-34, ultimately replace the predecessor, Rev. 2003-61. In attempts to broaden the rules, and ultimately enhance determinacy of
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Proc. 2013-34 abandons the earlier establishment of a two year time limit for filing an equitable relief claim after the IRS’s first collection. Although the Tax Court’s opinion agreed with the IRS’ stance on the case Lantz as a misinterpretation of the two year rule, ultimately the IRS denounced the two year limit. The taxpayer seeking innocent spouse relief, also known as the “requesting spouse”, now has generally ten years to seek ramifications for unpaid liabilities. However if the requesting spouse seeks a credit or a refund, the time limit is the greater of two years after the paid tax or before the three years after the return was filed. The time extensions validate some taxpayers’ concerns on the IRS’ previous questionable …show more content…
The equitable relief factors are no longer married, economic hardship, knowledge or reason to know, and significant benefit. No longer married extends to those that have not lived with their spouse for the past twelve months. People are no longer considered to be married if their spouse dies. The economic hardship factor, or when the spouse would undergo economic hardship if denied relief, is weighted more heavily in years 2013 and following. Knowledge or reason to know is not weighted more heavily than other factors. If the non-requesting spouse had an advantage at the expense of the requesting spouse, relief is more probable. The chance of relief under the knowledge factor is neutral if the amount of liability is insignificant. While the four factors for deciding equitable relief remain unchanged, applicability extends to more
Proc. 2013-34 abandons the earlier establishment of a two year time limit for filing an equitable relief claim after the IRS’s first collection. Although the Tax Court’s opinion agreed with the IRS’ stance on the case Lantz as a misinterpretation of the two year rule, ultimately the IRS denounced the two year limit. The taxpayer seeking innocent spouse relief, also known as the “requesting spouse”, now has generally ten years to seek ramifications for unpaid liabilities. However if the requesting spouse seeks a credit or a refund, the time limit is the greater of two years after the paid tax or before the three years after the return was filed. The time extensions validate some taxpayers’ concerns on the IRS’ previous questionable …show more content…
The equitable relief factors are no longer married, economic hardship, knowledge or reason to know, and significant benefit. No longer married extends to those that have not lived with their spouse for the past twelve months. People are no longer considered to be married if their spouse dies. The economic hardship factor, or when the spouse would undergo economic hardship if denied relief, is weighted more heavily in years 2013 and following. Knowledge or reason to know is not weighted more heavily than other factors. If the non-requesting spouse had an advantage at the expense of the requesting spouse, relief is more probable. The chance of relief under the knowledge factor is neutral if the amount of liability is insignificant. While the four factors for deciding equitable relief remain unchanged, applicability extends to more