The following commonly used terms apply to innocent spouse cases:

There are many different types of cases that can result in an appealed innocent spouse case. Innocent spouse cases are non-docketed or docketed, and post-assessment or pre-assessment. Appeals considers an innocent spouse issue as part of an appeal of any of the following types of cases (not all-inclusive):

Innocent spouse cases involve married or formerly married taxpayers who file joint or separate return(s) while married in community property states. The requesting spouse wants relief from a liability for tax plus related penalties and interest for which he or she believes only the non-requesting spouse or former spouse is liable.

When a married couple files a joint return, both spouses are responsible for the full amount of the tax. However, under IRC 6013(e), IRC 6015(b), IRC 6015(c) and IRC 6015(f) the IRS can determine only one spouse is responsible for all or part of the tax, penalties and interest.

If relief is denied in whole or in part to the RS, he/she may appeal the determination.

If relief is granted in whole or in part to the RS, the non-requesting spouse may appeal the determination to the extent relief is granted to the requesting spouse.

Both spouses might appeal a partial-relief preliminary determination.

The non-requesting spouse, however, may not appeal a decision to deny relief to the requesting spouse.

Certain procedures, such as giving full consideration to all possible relief provisions, apply to all types of innocent spouse cases.

If Form 8857, Request for Innocent Spouse Relief, was filed and shows a new name or address for the requesting spouse, the new name or address cannot be disclosed to the NRS.

Do not disclose the RS’s personal information to the NRS. Similarly, do not disclose the NRS’s personal information to the RS.

Information with respect to the joint return account, such as the balance due, can be disclosed to either spouse. See IRM 11.3.2.4.1 for additional information regarding disclosure of collection activities with respect to joint returns.

Married taxpayers who file a joint return and one or both spouses request innocent spouse relief are controlled on ACDS in a work unit that includes three records — one for the joint return, one for the requesting spouse and one for the non-requesting spouse.

The joint return is controlled as the key case. The requesting spouse and the non-requesting spouse are each controlled as a related case within the same work unit.

The related case records are created for the following reasons:

Special instructions apply for carding a case for married taxpayers who filed separate returns in community property states where one or both spouses is requesting equitable relief.

This type of case requires special CASES procedures to create a work unit that includes two records — one for the requesting spouse and one for the non-requesting spouse.

The requesting spouse is controlled as the key case. The non-requesting spouse is controlled as a related case.

If both spouses are docketed under separate docket numbers, each spouse must be controlled as a separate key case work unit. Enter cross reference information in the "Notes" field.

Letter 4141 CG, Uniform Acknowledgment Letter, is used for non-docketed Innocent Spouse cases. The Appeals Team Manager (ATM) is responsible for generating and issuing Letter 4141 on the date the case is assigned on ACDS, which cannot be later than 30 days from the ACDS "Received Date" .

Letter 4141 is also used for most docketed Innocent Spouse cases, unless an approved Uniform Acknowledgment Letter substitute is used, such as Letter 3808 or Letter 3808-A, combination acknowledgment/initial contact letters used in Campus Appeals offices. When UAL Letter 4141 is used, the ATM is responsible for generating and issuing it on the ACDS "Assigned Date" . In Campus Appeals offices, when approved Uniform Acknowledgment Letter substitute Letter 3808 or Letter 3808-A is used , the AO is responsible for generating and issuing it no later than 30 days from the ACDS "Assigned Date" .

Generate the UAL from ACDS APGolf and mail it to the taxpayer (and power of attorney if applicable).

When APGolf is used to prepare the letter, certain entries are made systemically on ACDS:

Because the UAL letter for an innocent spouse case is generated from a non-time sheet (related) record, the CARATS information about the UAL is not systemically entered. Until programming provides for systemic entry of CO-UAL information on CARATS on the time sheet case when the letter is generated from a non-time sheet case, the AO must manually make entries regarding the issuance of the UAL. Add CARATS action/sub-action code CO-OT on the time sheet (key case) record of the innocent spouse work unit and include the following information about the UAL:

Letter 965, Conference Letter Non-docketed Case, or other pattern conference letter available on APGolf. A conference letter may be used to schedule an informal conference with the appellant spouse, and it explains what they should do if they plan to provide additional information and supporting documentation, or be represented. It also may be used to request additional information to help support the taxpayer's position. Initial contact may be made by telephone in lieu of an initial contact conference letter.

Letter 3791, Appeals Conference for Innocent Spouse Relief - to Non-requesting Spouse. This letter replaces Letter 3287, Initial Notification Letter to Non-requesting Spouse (NRS). This conference letter is sent to the non-requesting spouse when the requesting spouse appeals the preliminary determination if Appeals proposes to increase the amount of relief recommended. It is sent to provide the non-requesting spouse with an opportunity to provide any relevant additional information, present his or her position, or request an Appeals conference before the final determination.

Letter 3792, Appeals Conference for Innocent Spouse Relief - to Requesting Spouse. This conference letter is sent to the requesting spouse when the non-requesting spouse appeals the preliminary determination if Appeals proposes to decrease the amount of relief recommended. It is sent to provide the requesting spouse with an opportunity to provide any relevant additional information, present his or her position, or request an Appeals conference before the final determination.

Letter 3288, Notice of Determination Concerning Your Request for Relief from Joint and Several Liability under Section 6015 - to Requesting Spouse. This letter is used to advise the requesting spouse of the determination concerning relief from joint and several liability under IRC 6015 and to provide information about filing a petition with Tax Court.

Letter 3289, Notice of Determination Concerning Relief from Joint and Several Liability under Section 6015 - to Non-requesting Spouse. This letter is used to advise the non-requesting spouse of the determination concerning relief from joint and several liability under IRC 6015. There are no provisions in IRC 6015 that allow the non-requesting spouse to petition the United States Tax Court from a notice of final determination.

Letter 969, Letter Transmitting Agreement Form Non-Docketed Case. This letter is used in non-docketed cases to send an agreement form to the taxpayer or representative for signature.

Letter 913, Closing Letter - Agreed Cases. This letter is used in non-docketed cases to notify the taxpayer that his or her case is being closed.

Use the same letters for an Innocent Spouse docketed case as used for a docketed case.

Form 870-IS, Waiver of Collection Restrictions in Innocent Spouse Cases, is used to allow a RS who requested relief under IRC 6015 to indicate agreement with the IRS determination and waive, in writing, the collection restrictions contained in IRC 6015(e)(1)(B). Use of this waiver is only appropriate in post-assessment innocent spouse cases.

Form 870-IS can be found on the Publishing web site.

See IRM 25.15.3.10, Waivers, for a complete discussion and detailed guidance and procedures for use of Form 870-IS.

The Appeals Officer is responsible for providing Appeals Processing Services with the necessary disposition information to update ACDS, ISTS and IDRS. Refer to IRM 25.15.14 for information on ISTS.

Use of the Customized Form 5402, Appeals Transmittal and Case Memo, for Innocent Spouse cases, is mandatory, and provides APS with the necessary information to update ISTS.

The AO must review the account for levies, liens, OICs, IAs, missing payment, and collection statute dates, and address these issues and any special processing instructions on the Customized Form 5402 prior to sending the case to APS for closing.

Allocation of any payments and credits must also be identified, and detailed information provided to APS in the closing instructions.

See IRM 25.15.14.4 for procedures on computing the allowed and disallowed amounts.

Instructions for completing the Innocent Spouse Customized Form 5402 are posted on the Utilities menu of ACDS.

A sample Appeals Case Memorandum for Innocent Spouse cases is posted on the Appeals Innocent Spouse web site.

See IRM 8.6.2, Appeals Case Memo (ACM), Appeals Case Memo Procedures for more detailed information on ACM guidelines.

The RS must file a request for relief with the IRS under any subsection of IRC 6015 no later than two years from the date of the first collection activity against the RS after July 22, 1998. Not all attempts to collect by the IRS trigger the two-year period.

Exercise caution when determining if a request for relief is untimely. Collection activity that may start the two-year rule includes applying (or offsetting) a RS's separate income tax refund to the joint tax for which the RS is seeking relief, IRC 6330 notices, filing of a suit by the United States against the RS, and claims in judicial proceedings.

See IRM 25.15.3.4, Collection Activity, for more information on this topic.

The two-year period will not run if the RS did not receive notice of his or her right to file a Form 8857 on or about the time the refund was applied to the joint tax. As of March 7, 2005, the IRS included notification with all offsets. Prior to that date, the IRS did not use this practice.

Refund offset notices issued after March 7, 2007 start the two-year period for filing an innocent spouse request for relief, and requests filed more than two years after such notices are considered untimely.

When denying untimely requests for relief due to refund offsets made after March 7, 2005, attempt to confirm that the Service notified the RS of the right to file an IRC 6015 request for relief at that time of the offset. Confirm the Service sent the RS a refund offset notice with Publication 1 or with language on the notice advising the RS of the RS's right to file a request for relief under IRC 6015 by asking the RS if he or she has a copy of the notice and by trying to locate the appropriate CP code on the RS's TXMOD transcript.

In McGee v. Commissioner, 123 T.C. 314 (2004), the Tax Court held that a refund offset alone will not trigger the two-year period for filing a request for relief unless the Service at the time of the offset notified the RS of his or her right to file a request for relief under IRC section 6015. As a result of this decision, a request will be considered timely unless there is evidence that at the time of the offset the Service notified the RS of his or her right to request relief.

Due to the McGee case, it was decided it was not appropriate for the Service to deny a request for relief solely based on the two-year rule where the collection activity at issue is a refund offset and the RS was not notified of his or her right to request relief under IRC 6015.The Office of Chief Counsel advised the Service to fully develop these cases on the merits. As a result, CCISO reworked a number of cases initially disallowed because the request was deemed late. Additionally, the National Taxpayer Advocate advised CCISO to issue a letter advising taxpayers that were disallowed because their claim was deemed untimely that they can now submit a new request.

If a case was reworked by the Cincinnati Centralized Innocent Spouse Operation (CCISO) due to the McGee court case, and the taxpayer appeals the determination, Appeals should accept and consider the case a new appeal, even if it was already appealed on the two-year rule.

For more information on this topic, see IRM 25.15.3.4, Collection Activity.

In some cases, the file may contain information the RS was previously abused and fears harassment or retaliation from the NRS in response to filing of the request for relief. Special procedures were developed to help protect the RS’s address, location, and contact information. First contact the RS to determine if there is a need to take additional precautions to protect the RS’s address, location, and contact information. If so, letters to be sent to the NRS are prepared by the Field Appeals Officer, but sent from the Covington Campus Appeals office with the Covington Campus Appeals office address and contact information on the letter. Campus Appeals Officers follow normal procedures since their letters are already mailed from a centralized location.

The NRS must be notified and given an opportunity to present further arguments and information if the AO is considering increasing the relief recommended.

If it is necessary to contact the NRS and there is a need to take additional precautions to protect the RS’s address, location, and contact information, prepare the conference letter, Letter 3791, as follows and send it as an attachment in an encrypted E-mail to the Covington APS Processing Team Manager (PTM):

The PTM signs Letter 3791 on behalf of the Deputy Chief of Appeals and mails it by regular mail. The PTM or assigned employee faxes a copy to the Appeals Officer, monitors the response for 45 days, and forwards any response to Appeals. To monitor the response, APS -

When the Field Appeals Officers determine there is a need to take additional precautions to protect the RS’s address, location, and contact information, they prepare the decision letter, Letter 3289, Notice of Final Determination, as follows and send it as an attachment in an encrypted E-mail to the Covington APS Processing Team Manager (PTM). Again, the Appeals Officer -

The PTM signs Letter 3289 on behalf of the Deputy Chief of Appeals. The PTM or assigned employee mails the letter by regular mail to the NRS, and faxes a copy to the Appeals Officer.

Generally, for a non-docketed proposed deficiency case, the case is returned to the originating Examination function for consideration of the Relief from Joint and Several Liability issue. Jurisdiction is released, since this is a new issue which requires Examination work.

If unusual circumstances exist (e.g., short statute), Appeals and Examination decide the best way to handle the request on a case-by-case basis.

When AUR is ready to issue a notice of deficiency and CCISO has not yet made a determination on the Innocent Spouse request for relief, AUR checks IDRS CC: ISTSRA to determine the latest stage, and then:

When AUR issues a notice of deficiency and CCISO has not made a determination, AUR also issues Letter 2645C to only the RS. This letter includes a paragraph to inform the RS of the impending notice of deficiency to be issued to both taxpayers within the next 2 to 4 weeks. The letter explains that CCISO is in the process of making a determination based the Innocent Spouse request and provides the requesting spouse with a CCISO contact name, toll free number, and hours of operation.

When CCISO makes a determination before AUR has issued the notice of deficiency, AUR follows the instructions in IRM 25.15.7.4.

When CCISO informs AUR prior to the issuance of the notice of deficiency that the IS determination was appealed:

AUR will:

If, after AUR issued or when it is too late to stop the issuance of the notice of deficiency, either the RS or NRS contacts AUR to request an Appeals conference on the Innocent Spouse determination, AUR notifies CCISO of the appeal. CCISO sends the appealed Innocent Spouse case to Covington APS, and flags its separate file to indicate it is part of a related AUR/IS case and should be associated with the other file. AUR will follow the steps outlined below in (3).

If, after AUR issued or when it is too late to stop the issuance of the notice of deficiency, either the RS or NRS contacts CCISO to request an Appeals conference on the Innocent Spouse determination, CCISO notifies AUR of the appeal, send the appealed Innocent Spouse case to Covington APS, and flag its separate file to indicate it is part of a related AUR/IS case and should be associated with the other file. AUR follows the steps outlined below in (3).

AUR follows the procedures in IRM 4.19.3.20. AUR will:

:

Source functions route non-docketed AUR/Innocent Spouse cases to Covington APS and docketed Innocent Spouse cases to the Appeals office indicated on the docket list. Refer to the Campus Case Routing guidelines posed on the Appeals web site.

Create one work unit for the "AUR/Innocent Spouse" case.

Most Innocent Spouse cases are routed to Covington APS. Covington APS usually receives the CCISO Innocent Spouse first, due to the close proximity of the Covington Campus Appeals Office to CCISO.

Card the Innocent Spouse case following the Innocent Spouse carding procedures described earlier in this IRM. Because it is typical to only receive the CCISO file first, pending receipt of the AUR file, hold the case in suspense until the AUR file is received and associated. After carding the Innocent Spouse case, take the following steps:

The case is either -

Consideration is given to the Innocent Spouse issue and any other issues in the case.

Ensure all required notices are sent to the non-appellant spouse.

If agreement is reached with both spouses regarding a proposed deficiency:

Show the deficiency on Form 870 as follows:

If agreement is reached with only one spouse, secure Form 870 from that spouse and issue a notice of deficiency to the other spouse. Send closing Letter 913 to the spouse who agrees. See IRM 25.15.12.23. This section provides language to include in the notice of deficiency for the unagreed spouse.

If agreement is not reached with either spouse, issue a notice of deficiency, jointly or separately, as required. The language in the notice of deficiency serves to notify the RS of the result and is in lieu of a separate NRS Determination Letter 3289. See IRM 25.15.12.23. Refer to this section to determine whether to issue the notice(s) of deficiency jointly or separately and for language to include in the notice of deficiency(s). The deficiency, if any, is assessed by Appeals if defaulted.

If a notice of deficiency is issued, APS monitors the case and defaults it, or updates ACDS and forwards it to Counsel for trial preparation, if petitioned, using standard closing procedures.

Certain prohibited collection actions against the RS must be stopped while the Request for Relief from Joint and Several Liability is under consideration. See IRM 25.15.3.4.

Appeals delays any hearing on non-spousal defense issues or collection alternatives until a determination is made regarding the innocent spouse request.

The AO/SO enters CARATS action code SU-PI (Suspense - Put In) on ACDS on the CDP/EH case, using the date the CDP case was received in Appeals with IS already at issue or the date the Form 8857 was received on an existing CDP case. Also update the ACDS status code to suspense status E/OTH. Input the CARATS action code SU-TO (Suspense - Take Out) when the IS result is received from CCISO.

When Innocent Spouse relief is requested in conjunction with a Collection Due Process hearing, APS will:

Prior to January 1, 2001, joint account modules involving Innocent Spouse, Offer In Compromise, Petitioning/Non-Petitioning, and Bankruptcy issues required use of "Split Account Processing" .

This process separated the Individual Master File (IMF) account into two and sometimes three accounts, with one account remaining on MFT 30 and the other account(s) being established on Non-Master File (NMF).

On January 1, 2001, the MFT 31, Separate Assessment Module, was added to the IMF. MFT 31 contains split spousal assessments previously processed to NMF which meet one or more of the following conditions:

MFT 31 accounts established or in processing between January 1, 2001 and January 1, 2005 were established as Split/Transfer Accounts.

Split/Transfer accounts included transactions and balances for the liable spouse after the other was relieved, in full or in part, of the liability due to:

Effective January 1, 2001, the entire IMF account remained on Master File when working accounts that required split processing. The additional accounts were processed as IMF accounts using MFT 31.

Split assessment accounts on NMF as of January 1, 2001, remained on the NMF system.

NMF assessments continued to be necessary if AIMS and/or Master File contained an invalid SSN for one or both taxpayers.

As of January 1, 2005, Master File programming for the MFT 31 allows the systemic "mirroring" of the MFT 30 module.

Mirror modules are created when certain events occur resulting in one or both spouses being fully or partially liable.

The mirroring process creates two MFT 31 accounts; one for each spouse’s Social Security Number (SSN). It provides a greater ability to systemically handle separate treatment of spouses; while maintaining a necessary cross-referencing capability. Some modules have conditions preventing mirroring or causing mirroring to occur at a later stage.

The purpose of mirroring a joint MFT 30 module into separate, but identical MFT 31 modules is to allow for the correct computation of each taxpayer’s Collection Statute Expiration Date (CSED). Mirroring also allows collection activity to continue for the non-requesting spouse (NRS).

Mirror accounts are currently created for the following types of cases:

See IRM 21.6.8.5.1, Mirrored Accounts, or IRM 25.15.15, Mirror Modules for Requests for Relief from Joint and Several Liability, for the details of how the mirroring process occurs. Following is an example of a mirrored account.

Some situations prevent mirroring of modules, and there are other situations where conditions must be resolved prior to mirroring. The modules which can’t be mirrored are transferred to NMF using existing procedures. Exceptions to mirroring modules are discussed in IRM 25.15.15.2, Exceptions to Mirroring Modules.

MFT 31 accounts established or in processing between January 1, 2001 and January 1, 2005 were established as Split/Transfer Accounts.

A TC 971, with one of the action codes (AC 100-104) listed below, appears on the MFT 30 joint liability account when MFT 31 account processing occurred between January 2001 and January 2005:

The TIN of the obligated spouse (for whom the MFT 31 account was created) is listed in the cross-reference TIN field on the MFT 30 account.

A MFT 31 account is created for the cross-reference TIN and contains a corresponding TC 971 with the same action code used on the MFT 30 account. It also contains a cross-reference to the primary taxpayer's TIN.

After the MFT 31 account is established, both accounts appear similar to the following: