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Can I appeal a denial of innocent spouse relief?

A taxpayer will know the status of their relief claim when the IRS issues a Notice of Preliminary Determination. The notice will contain information regarding the IRS’s decision and its basis. If a taxpayer disagrees with the IRS’s initial determination, the taxpayer will have the right to file one or multiple appeals. Their first opportunity to appeal is with the IRS Appeals Division. The taxpayer can complete the Form 12509 Statement of Disagreement to explain why he/she disagrees with the IRS’ determination. It is important to note that the timing for this initial appeal is extremely tight. Taxpayers generally have only 30 days to file their objection with IRS Appeals.

If a taxpayer requesting innocent spouse relief is denied such relief and is issued a letter of final determination, the IRS will reconsider their decision under certain circumstances. Reconsideration requires that the taxpayer requesting reconsideration submit additional documentation. This is because the IRS made a unfavorable determination regarding innocent spouse relief before and the only way that they will reconsider that decision is with new documentation that was not submitted with the first request.

Though the ruling of the IRS in regard to an innocent spouse relief request is final, there are a few ways in which the United States Tax Court may decide on this issue. First, a taxpayer may attempt to use an innocent spouse claim as a defense to a 90-day letter (Notice of Deficiency). If a taxpayer has not received a final determination notice from the IRS, a taxpayer may also petition the court after innocent spouse relief has been requested but before the IRS issues a final determination. The petition must be filed within six months from filing the request for innocent spouse relief. If a taxpayer appeals a matter and fails to include a request for relief such as innocent spouse relief, he or she may be permanently barred from asserting a claim of this type. In either case, the non-requesting spouse will have an opportunity to be heard in court and present evidence that could rebut the claims of the spouse requesting relief.

How Will a Tax Court Consider My Innocent Spouse Relief Appeal?

If you appeal a tax decision, the matter will be approached as if it was a new matter. In legalese, your matter is approached de novo. This means that the court is free to consider new evidence that may not have been available or included for consideration in earlier proceedings. Furthermore, the Tax Court will not consider the determination the IRS made regarding your claims or petition. Rather, the matter will be decided independently based on the interpretation of the law in light of existing and new evidence.