Generally when a married couple files a joint return, both parties are liable for any unpaid liabilities for any unreported or under reported income. An “innocent spouse,” a taxpayer who did not know and did not have reason to know that his or her spouse understated or underpaid an income tax liability, can under certain circumstances, escape responsibility for these tax obligations.
Effective immediately, the IRS will no longer enforce a rule that required taxpayers to file for innocent spouse status within two years after receipt of an IRS collection notice. The deadline prevented taxpayers, who were in the dark about their spouse’s tax debts, from seeking relief.
There are three types of innocent spouse relief: the innocent spouse provision, separation of liability and equitable relief. The removal of the two-year limit only affects requests under the equitable relief provision.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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