In Notice 2012-8 the IRS has improved the possibility of “Innocent Spouse” claims for relief from tax liability being granted. The new factors that the IRS will take into consideration are actual abuse or lack of financial control. The actual abuse in the form of physical intimidation is best proven through police reports of domestic violence or opinions of treating professionals. The more interesting grounds for relief are lack of financial control.
The lack of financial control test, as in the physical abuse test, is subject to proof based upon facts and circumstances. For some taxpayers the evidence will be both personal and cultural. Example: A cultural up bringing in which a spouse is expected to obey and respect another may be a foundational element for lack of control. Other factors, of course can be important, but the social, religious and immigration history may also be important. Recent immigration from a culturally submissive environment may be very important to the claim of innocent spouse relief.
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