Sam Brotman, JD, LLM, MBA January 15, 2014 4 min read

Theory of IRS Innocent Spouse Relief

Because of certain benefits that filing jointly allows, many married taxpayers elect to file joint returns. However, filing a joint return carries the added burden of both parties being liable for the tax due. In addition, under the Internal Revenue Code, married taxpayers who file jointly are each liable for any additions to the tax, penalties, or interest associated with the account.[1] This is a concept in the law known as joint and several liability, meaning that the spouses are responsible for any tax liabilities together (jointly) but can be held responsible for them as individuals (severally).

From a practical standpoint, the IRS does not have the resources to make the determination on its own of who is an innocent spouse. This would require the IRS to review thousands upon thousands of joint collection accounts and make individual determinations as to whom should be assessed an increase in liability. This is why when a married couple signs their tax return both parties are attesting to the accuracy of the tax that is owed. As such, if the IRS finds an increase in the amount of tax that is owed, it holds both parties equally responsible for the increase. This carries two implications. First, it places the burden on the parties to determine how to pay the liability, rather than the IRS. Second, since both parties are considered responsible for the liability, the IRS can proceed with collection action against either one of them then just limiting itself to one spouse.

Courts have supported the IRS policy of targeting either spouse for a balance that is due. Spouses, even if both agree, may not insist that the IRS first try to collect from one spouse before going after the assets of the other.[2] In addition, courts have also held that the IRS is not bound by divorce decrees and other otherwise legally binding agreements reached by the spouses. [3] The rationale behind this is that it would be unfair to limit the collection rights of the IRS by virtue of an agreement that it was not a party to. [4] However, the Internal Revenue Code recognizes that it is not fair to hold innocent spouses responsible for liabilities in all circumstances. Thus, it created several avenues where taxpayers can seek relief from IRS collection activities. Although commonly known as innocent spouse relief, these actually constitute three different ways that taxpayers can absolve themselves from past liability owed.

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[1] IRC 6013(d)(3)

[2] Bloom v. United States, 272 F.2d 215 (9th Cir. 1959)

[3] Pesch v. Comm'r, 78 T.C. 100 (1982) (it is clear that a taxpayer cannot avoid such liability through the simple medium of an agreement to which the IRS is not a party.)

[4] Pesch v. Comm'r, 78 T.C. 100 (1982) (it is clear that a taxpayer cannot avoid such liability through the simple medium of an agreement to which the IRS is not a party.)

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

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