Publication 971 - Innocent Spouse Relief - Internal Revenue Service (Page 3 of 24) in pdf

Exception for equitable relief. On July 25, 2011, the IRS

3. You entered into an offer in compromise with the

IRS.

issued Notice 2011-70 (available at

2011-32_IRB/ar11.html) expanding the amount of time to

4. You entered into a closing agreement with the IRS

request equitable relief. The amount of time to request

that disposed of the same liability for which you want

equitable relief depends on whether you are seeking relief

to seek relief.

from a balance due, seeking a credit or refund, or both:

•

Exception for agreements relating to TEFRA part-

Balance Due – Generally, you must file your request

nership proceedings. You may be entitled to relief, dis-

within the time period the IRS has to collect the tax.

cussed in (4) earlier, if you entered into a closing

Generally, the IRS has 10 years from the date the

agreement for both partnership items and nonpartnership

tax liability was assessed to collect the tax. In certain

items, while you were a party to a pending TEFRA partner-

cases, the 10-year period is suspended. The amount

ship proceeding. (TEFRA is an acronym that refers to the

of time the suspension is in effect will extend the

“Tax Equity and Fiscal Responsibility Act of 1982” that

time the IRS has to collect the tax. See Pub. 594,

prescribed the tax treatment of partnership items.) You are

The IRS Collection Process, for details.

not entitled to relief for the nonpartnership items, but you

•

Credit or Refund – Generally, you must file your

will be entitled to relief for the partnership items (if you

request within 3 years after the date the original

otherwise qualify).

return was filed or within 2 years after the date the

Transferee liability not affected by innocent spouse

tax was paid, whichever is later. But you may have

relief provisions. The innocent spouse relief provisions

more time to file if you live in a federally declared

do not affect tax liabilities that arise under federal or state

disaster area or you are physically or mentally una-

transferee liability or property laws. Therefore, even if you

ble to manage your financial affairs. See Pub. 556,

are relieved of the tax liability under the innocent spouse

Examination of Returns, Appeal Rights, and Claims

relief provisions, you may remain liable for the unpaid tax,

for Refund, for details.

interest, and penalties to the extent provided by these

•

Both a Balance Due and a Credit or Refund – If you

laws.

are seeking a refund of amounts you paid and relief

from a balance due over and above what you have

Example. Herb and Wanda timely filed their 2008 joint

paid, the time period for credit or refund will apply to

income tax return on April 15, 2009. Herb died in March

any payments you have made, and the time period

2010, and the executor of Herb’s will transferred all of the

estate’s assets to Wanda. In August 2010, the IRS as-

for collection of a balance due amount will apply to

sessed a deficiency for the 2008 return. The items causing

any unpaid liability.

the deficiency belong to Herb. Wanda is relieved of the

deficiency under the innocent spouse relief provisions, and

Exception for relief based on community property

Herb’s estate remains solely liable for it. However, the IRS

laws. If you are requesting relief based on community

may collect the deficiency from Wanda to the extent per-

property laws, a different filing deadline applies. See Relief

mitted under federal or state transferee liability or property

from liability arising from community property law dis-

laws.

cussed later under

Community Property

Laws.

The IRS Must Contact Your Spouse or

Form 8857 filed by or on behalf of a decedent. An

Former Spouse

executor (including any other duly appointed representa-

tive) may pursue a Form 8857 filed during the decedent’s

By law, the IRS must contact your spouse or former

lifetime. An executor (including any other duly appointed

spouse. There are no exceptions, even for victims of

representative) may also file Form 8857 as long as the

spousal abuse or domestic violence.

decedent satisfied the eligibility requirements while alive.

We will inform your spouse or former spouse that you

For purposes of separation of liability relief (discussed

filed Form 8857 and will allow him or her to participate in

later), the decedent’s marital status is determined on the

the process. If you are requesting relief from joint and

earlier of the date relief was requested or the date of death.

several liability on a joint return, the IRS must also inform

him or her of its preliminary and final determinations re-

Situations in which you are not entitled to relief. You

garding your request for relief.

are not entitled to innocent spouse relief for any tax year to

However, to protect your privacy, the IRS will not dis-

which the following situations apply.

close your personal information (for example, your current

name, address, phone number(s), information about your

1. In a final decision dated after July 22, 1998, a court

employer, your income or assets) or any other information

considered whether to grant you relief from joint lia-

that does not relate to making a determination about your

bility and decided not to do so.

request for relief from liability.

2. In a final decision dated after July 22, 1998, a court

If you petition the Tax Court (explained below),

did not consider whether to grant you relief from joint

your spouse or former spouse may see your

liability, but you meaningfully participated in the pro-

personal information.

ceeding and could have asked for relief.

CAUTION

Publication 971 (September 2011)

Page 3

Publication 971 - Innocent Spouse Relief - Internal Revenue Service Page 3

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