The Service recognizes the sensitivity of information shared in claims involving alleged abuse of the RS. The Form 8857, Request for Innocent Spouse Relief, and the Pub 971, Innocent Spouse Relief, advise the RS that the NRS will be contacted during the claim process.

Personal information of one spouse is not to be disclosed to the other spouse: this includes the other spouse’s new last name, location, or telephone number; any information about the other spouse’s employment, income or assets, or the income level at which a suspended account will be reactivated. See IRM 25.15.1.9.2, Disclosure Rules, for more information.

Certain collection activities trigger the start of the two-year period for requesting relief under IRC 6015(b) or (c). In general, the Collection Due Process (CDP) notice is considered the first collection activity. The CDP notice, which occurs in all cases before levy or seizure except in the case of levies on state tax refunds and in jeopardy situations, provides taxpayer notice of the Service’s intent to levy (pursuant to section 6331(d)) and the taxpayer’s right to a pre-levy (section 6330) CDP hearing.

See Exhibit 25.15.3-1, Math Errors, for additional information on how to treat Math Errors for purposes of determining innocent spouse relief.

Under IRC 6015(b), the first requirement is that a valid joint return was filed for the taxable year for which relief is being requested.

The second requirement is that there must be an understatement of tax attributable to erroneous items of the NRS. Attribution is a critical factor. Items attributable to the RS do not qualify for relief. The RS cannot be relieved of tax on their own items, including joint items, under IRC 6015(b). In most cases, examiners should first consider attribution before other factors. See IRM 25.15.3.5, Terms and Definitions, for more information on:

The third requirement to consider under IRC 6015(b) is whether the RS did not know and had no reason to know of the understatement at the time the tax return was signed.

Under this requirement, the RS must establish:

The examiner should consider the following factors to determine whether a reasonable person in similar circumstances would have known of the understated tax. The following list is not all inclusive:

See Treas. Reg. 1.6015-2(d) and IRM 25.15.3.12, Case Development, for additional information on case development.

The fourth requirement under IRC 6015(b) is to consider all the facts and circumstances, and determine whether it is inequitable (unfair) to hold the RS liable for the deficiency.

A determination of whether it is inequitable to hold the RS liable is based on the facts and circumstances and considers such items as:

This list is not all inclusive. See IRM 25.15.3.12, Case Development, for more information.

These guidelines should be applied in a consistent and nondiscriminatory manner. Decisions to grant relief should not be based on the subjective personal and social beliefs of the IRS employee or any other inappropriate grounds.

The fifth requirement to consider under IRC 6015(b) is that the request for relief must be made within two years from the first collection activity against the RS. See IRM 25.15.3.5, Terms and Definitions, and IRM 25.15.3.5.1, Collection Activity, for additional information.

Partial relief may be granted when a spouse meets all of the other conditions for innocent spouse relief, except that he or she had knowledge of, or reason to know of, some part of the understatement, or some part of the understatement is attributable to the RS. IRC 6015(b) specifically allows the partial relief of liability (including related penalties and interest) to the extent of the lack of knowledge or reason to know of the item giving rise to the understatement. See IRM 25.15.3.12, Case Development, Exhibit 25.15.3-4, Partial Relief Due to Knowledge or Reason to Know, and Treas. Reg. 1.6015-2(e)for additional information.

If all the criteria of 6015(b) relief are met by RS, then allow full or partial relief of the liability accordingly, including any related penalties and interest.

If the request for relief is denied in full or in part under the provisions of IRC 6015(b), then consider relief under IRC 6015(c) for the denied amount(s).

An individual may request relief by asking the Service to allocate a deficiency. To qualify for relief under IRC 6015(c), the RS must meet the following requirements:

There are numerous factors to consider in allocating a deficiency under IRC 6015(c). Not all items are eligible for allocation, subject to the limitations listed in this section.

The allocation is made according to the procedures contained in IRC 6015(d). The allocation takes into consideration limitations in IRC 6015(c).

CCISO will refer to the allocation worksheets on the Innocent Spouse Operations SharePoint site at https://organization.ds.irsnet.gov/sites/SbseCCSCRC/FS/ISO/SitePages/Home.aspx.

Area Office examiners will refer to http://mysbse.web.irs.gov/examination/tip/innocentspouse/default.aspx, for more information, and find the Technical Services reviewer athttp://mysbse.web.irs.gov/examination/tip/innocentspouse/contacts/11883.aspx for the worksheets, and for assistance in completing the computations as needed.

IRC 6015(f) applies to understatements (liabilities from deficiency assessments) and underpayments (unpaid self-assessed taxes on original or amended returns).

This is the only provision under IRC 6015 that provides relief for underpayments. See IRM 25.15.3.5, Terms and Definitions, for a further explanation of underpayment.

There are seven threshold conditions which must be met in order for a claim to be considered under IRC 6015(f). See IRM 25.15.3.9.2, Eligibility Threshold Requirements for more information.

If the threshold conditions are met, evaluate the claim first using factors discussed in Section 4.02 of Rev. Proc. 2013-34. See IRM 25.15.3.9.3, Streamlined Determinations, for more information.

Claims that cannot be allowed under Section 4.02 of Rev. Proc. 2013-34 will be evaluated using the Equitable Relief factors discussed in Section 4.03 of Rev. Proc. 2013-34. See IRM 25.15.3.9.4, Relief for Underpayment and Understatement Cases.

This provision also applies to penalties, additions to tax, and interest where relief is granted for the underlying tax. The analysis of the factors should focus on the underlying tax. If relief would have been appropriate for the underlying tax, then relief is appropriate for the penalties and interest. This includes situations where there was an underpayment of tax or a deficiency on the return, but subsequent payments have paid all the tax leaving only penalty and/or interest unpaid or partially unpaid.

See IRM 25.15.3.9.2.2, Availability of Refunds under IRC 6015(f), for refund provisions.

For a list of requirements that must be met for the Service to consider relief under IRC 6015(f), see IRM 25.15.3.9.2.1, Eligibility Threshold Conditions - Defined.

If all the threshold requirements discussed in IRM 25.15.3.9.2.1, Eligibility Threshold Conditions - Defined, are met and the RS meets all of the following criteria, relief will be granted:

If relief is not granted due to failure to meet one of the factors above then the examiner must consider the equitable relief factors in Section 4.03 of Rev. Proc. 2013-34. See IRM 25.15.3.9.4.1, Equitable Relief Factors (Section 4.03).

In some instances, a RS with an underpayment liability or understatement who meets the threshold requirements, (see IRM 25.15.3.9.2.1, Eligibility Threshold Conditions - Defined), may not meet all of the Section 4.02 conditions for a Streamlined Determination, see IRM 25.15.3.9.3, Streamlined Determinations, to qualify for relief. The RS may still qualify for equitable relief from a tax liability, if taking into account all the facts and circumstances, it is clearly inequitable to hold the RS liable for the underpayment, or for a liability arising from an understatement adjustment.

Various factors, listed in IRM 25.15.3.9.4.1, Equitable Relief Factors (Section 4.03), below, must be considered. All the facts and circumstances of the case are to be taken into account. The degree of importance of each factor varies depending on the circumstances of the RS and the factual context surrounding the marriage. The factors are designed as guides. It is not intended that only the factors described below in IRM 25.15.3.9.4.1, Equitable Relief Factors (Section 4.03), are to be taken into account in making the determination.

No one factor or majority of factors necessarily controls the determination. Therefore, depending on the facts and circumstances of the case, relief may be granted even if the number of factors weighing against relief exceeds the number of factors weighing in favor of relief, or a denial of relief may be appropriate even if the number of factors weighing in favor of relief exceeds the number of factors weighing against relief.

Letter 4983, NRS Preliminary Determination Allowed, and Letter 4983-C, Nonrequesting Spouse Preliminary Determination Letter on Allowed Innocent Spouse Claims: notifies NRS of the determination made to allow full relief and allows 30 days to appeal. It can also be issued as a Revised Preliminary Determination letter to advise the NRS of the determination to allow full relief based on additional information submitted by the RS and/or NRS and allows an additional 30 days to appeal.

Letter 4984, Non-Requesting Spouse Preliminary Determination, and Letter 4984-C, Nonrequesting Spouse Preliminary Determination Letter on Partially Allowed Innocent Spouse Claims: notifies NRS of the determination made to allow partial relief and allows 30 days to appeal. It can also be issued as a Revised Preliminary Determination letter to advise the NRS of the determination to allow partial relief based on additional information submitted by the RS and/or NRS and allows an additional 30 days to appeal.

Letter 4985, NRS Preliminary Determination-Disallowed, and Letter 4985-C, Nonrequesting Spouse Preliminary Determination Letter for Disallowed Innocent Spouse Claims: notifies NRS of the determination made to disallow relief. The NRS does not get appeal rights. It can also be issued as a Revised Preliminary Determination letter to advise the NRS of the determination to disallow relief based on additional information submitted by the RS and/or NRS.

Letter 4986, Requesting Spouse Preliminary Determination-Allowed, and Letter 4986-C, Requesting Spouse Preliminary Determination Letter on Allowed Innocent Spouse Claims: notifies RS of the determination made to allow full relief and provides petition rights when the refund is barred. It can also be issued as a Revised Preliminary Determination letter to advise the RS of the determination to allow full relief based on additional information submitted by the RS and/or NRS and provides petition rights on barred refund, if necessary.

Letter 4987, Requesting Spouse Preliminary Determination-Partial, and Letter 4987-C, Requesting Spouse Preliminary Determination Letter on Partially Allowed Innocent Spouse Claims: notifies RS of the determination made to allow partial relief and allows 30 days to appeal. It can also be issued as a Revised Preliminary Determination to advise the RS of our determination to allow partial relief based on additional information submitted by the RS and/or NRS and allows an additional 30 days to appeal.

Letter 4988, RS Preliminary Determination-Disallowed, and Letter 4988-C, Requesting Spouse Preliminary Determination Letter on Disallowed Innocent Spouse Claims: notifies RS of the determination made to disallow relief and allows 30 days to appeal. It can also be issued as a Revised Preliminary Determination letter to advise the RS of the determination to disallow relief based on additional information submitted by the RS and/or NRS and allows an additional 30 days to appeal.

Letter 3323, Notice to non-electing Spouse of Final determination on Innocent Spouse Claim, and Letter 3323-C, Notice to the Non-Electing Spouse of Final Determination: notifies NRS of the final determination.

Letter 5086, Requesting Spouse (RS) Final Determination, and Letter 5086-C, Requesting Spouse Final Determination - Allowed Innocent Spouse Claims: notifies RS of the determination to allow relief. Informs RS of their Tax Court rights when applicable.

Letter 5087, Requesting Spouse Final Determination Letter - Final, and Letter 5087-C, Requesting Spouse Final Determination Letter on Partially Allowed Inn. Sp. Claims: notifies RS of the determination to allow partial relief. Informs RS of their Tax Court rights.

Letter 5088, Requesting Spouse Final Determination Letter -Disallowed, and Letter 5088-C, Requesting Spouse Final Determination Letter on Disallowed Inn. Sp. Claims: notifies RS of the final determination to disallow relief. Informs RS of their Tax Court rights.

Letter 3284, Letter to Non-requesting Spouse, and Letter 3284-C, Notification to the Non-Requesting Spouse: notifies NRS of the innocent spouse claim filed and their opportunity to participate in the administrative proceedings.

Letter 3657, Non-qualifying Innocent Spouse Claim, and Letter 3657-C, No Consideration Innocent Spouse Claim Letter: notifies RS that their claim is not necessary because he/she does not meet the basic eligibility requirements for requesting relief and informs the RS that the claim is being closed.

Letter 3658, Unprocessable Innocent Spouse Claim, and Letter 3658-C, Unprocessable Innocent Spouse Claim: notifies RS that their claim is unprocessable.

Letter 3659, Requesting Spouse Initial Contact Letter, Letter 3659-A, Requesting Spouse Initial Contact Letter, and Letter 3659-C, Requesting Spouse Initial Contact: notify RS of receipt of their claim and provide information on the claim process (initial contact letter); also used to request additional information for making a determination if the necessary information is missing, incomplete, or appears questionable.

Letter 4144, Innocent Spouse Appeal Acknowledgement/Transfer and 870-IS Acknowledgement, and Letter 4144-C, Innocent Spouse Appeals Transfer: notifies RS and NRS that the case has been transferred to Appeals. If needed the letter can be used to advise the RS of Form 870–IS, Waiver of Collection Restrictions in Innocent Spouse Cases, status. For example if it was received late and could not be accepted, or if it was received and is being acknowledged.

Letter 4284, Non-requesting Spouse Reconsideration, and Letter 4284-C, Reconsideration Letter for the Nonrequesting Spouse: notifies NRS of our determination on a reconsideration claim.

Letter 5186, Requesting Spouse Reconsideration - Allowed, and Letter 5186-C, Reconsideration Letter for Requesting Spouse-Relief Allowed; notifies RS of the determination on a reconsideration claim to allow relief.

Letter 5187, Requesting Spouse Reconsideration - Partial, and Letter 5187-C, Reconsideration Letter for Requesting Spouse-Partially Allowed Relief: notifies RS of the determination on a reconsideration claim to allow partial relief.

Letter 5188, Requesting Spouse Reconsideration - Disallowed, and Letter 5188-C, Reconsideration Letter for Requesting Spouse-Disallowed Relief: notifies RS of the determination on a reconsideration claim to disallow relief.

Refer to IRM 25.15.17, Reconsiderations, for information on circumstances that allow for issuance of a second final determination letter.

Rev Proc 2013-34, section 4.03(2)(c)(iv) and Proposed TR 1.6015-1(o) provide the definition of abuse by the NRS as follows:

The Service is aware of the sensitive nature of claims involving alleged abuse of the NRS against the RS. Conduct fact-finding with compassion and awareness of the RS situation.

Carefully review all documentation submitted to support the abuse allegation, such as: police reports, witness statements, medical information, and photos.

Document the RS situation and particular circumstances, and all contacts made with RS and NRS.

Exercise special care in communications with the NRS to prevent unauthorized disclosure and to shield the RS location and circumstances from the NRS.

When making a determination to allow relief in full or in part, take care to notify the RS prior to contacting the NRS, if RS requests such advance notification, or if warranted by other facts and circumstances.

The presence of abuse by NRS toward RS or RS loved ones (such as children or other dependents in the household) mitigates the factor of knowledge under all code sections.

Consider how abuse played a role in the tax filing and/or omission of income items; do not treat the presence of abuse as a “blanket” factor to grant relief.

In a pre-assessment case, review the adjustment report or letter regarding the proposed deficiency which lists each adjustment. Consider all facts and circumstances of the examination and proposed adjustments.

In a post-assessment deficiency case, the administrative file of the examination should be obtained whenever possible, so the analysis described in paragraph (1) above can be performed.

Careful analysis of examinations establishes the credibility of one or both spouses’ written statements and oral testimony. Assign the proper weight to the information obtained from each spouse accordingly.

Consider relief determinations of deficiencies (understatements) by applying the criteria in IRC 6015(b), Innocent Spouse Relief, first. If all the criteria for relief under 6015(b) are not met, then consider relief under the provisions of IRC 6015(c) Allocation of Liability. Any amounts not granted relief under 6015(b) and 6015(c) must then be considered under the provisions of IRC 6015(f), Equitable Relief.

Focus on what the RS knew or had reason to know of at the time the return was signed, not what the RS knew during the audit, or at the time the claim was filed.

RS has the burden of establishing that he/she did not know and had no reason to know of the understatement or underpayment under 6015(b) or 6015(f). For instance:

"Did not know" is considered "actual knowledge," and is applicable during consideration of relief under 6015(c). Under 6015(c), the Service has the burden of proving the extent of RS’s knowledge.

"Reason to know" is also known as "Constructive Knowledge." Consider the following:

Use all resources at your disposal, including but not limited to: IDRS, for IRP income items and filing history, and Accurint for possible property interests and related business entities.

See Exhibit 25.15.3-4, Partial Relief Due to Knowledge or Reason to Know, for more information.

This concept is one of fairness toward the RS. Would it be inequitable to hold the RS liable for the deficiency or understatement? This concept is used for relief determinations under 6015(b) and 6015(f).

Consider the following:

Consider the motivation of the RS:

In cases where RS and NRS give conflicting testimony and there is no corroborating evidence to support either’s claims, consider denial, which leaves the liability joint and gives both taxpayers opportunity to go to appeals.

When spouses are still married and living together, a RS can make a claim for relief under 6015(b) and 6015(f).

Scrutinize all the facts to determine the reason for the claim of relief: be aware of attempts by the taxpayers to abuse the innocent spouse laws and avoid collection of tax due.

Divorced RS and NRS who are still living together for financial reasons may make claims under 6015(c) as well and these situations also bear additional scrutiny.

Obtain information regarding assets and any transfers made from NRS to RS.

If there is economic hardship and little to no earned income between the spouses, that alone is not a basis for allowing innocent spouse relief.

These cases must be well developed and documented in support of the determination made.

Points to consider:

If the Form 2848, Power of Attorney and Declaration of Representative, does not specifically authorize the representative with regard to the Form 8857 claim filed, then contact the RS directly. At that time it is recommended the RS be advised that there is a potential for conflict of interest when the same POA represents both parties.

Tax benefit does not mean benefit from a refund received.

Tax benefit means deductions, losses and credits attributable to the NRS that reduced the taxable income or tax of the RS.

It is also possible for items of the RS to reduce the taxable income of the NRS.

Account for items that created a tax benefit from one spouse to the other in any allocation.

See Exhibit 25.15.3-2, Tax Benefit Rule Examples, and Proposed Treas. Reg. 1.6015-3(d)(2)(i) for additional information.

Do not use a "count" of factors "for" and "against" relief to make determinations under 6015(f).

Make each claim determination based on the case as a whole and document ALL facts considered and the reasons for the determination outcome.

Work papers must document and support the examiner’s determination, which is made based on all the facts and circumstances of the case and the examiner’s judgement in application of those facts to the law.