June 30, 2022 12:24 am

Streamlined Innocent Spouse Relief Determination Granted

A spouse who was subject to abuse and physical intimidation by her former husband was entitled to equitable innocent spouse relief (Jan Pocock, TC Memo 2022-55). She met the conditions for a streamlined determination:

  1. The requesting spouse is no longer married to the nonrequesting spouse (“marital status requirement”)
  2. The requesting spouse would suffer economic hardship, based on certain thresholds, if not granted relief (“economic hardship requirement”); and
  3. The requesting spouse did not know or have reason to know that the nonrequesting spouse would not or could not pay the underpayment of tax reported on the joint income tax return, or did not know or have reason to know that there was an understatement or deficiency on the joint income tax return (“the lack of knowledge requirement”).

Even if there is evidence that the requesting spouse had “knowledge” that could bar relief, relief can still be granted by a showing of abuse, which can be physical, psychological, sexual, or emotional abuse, including efforts to control, isolate, humiliate, and intimidate the requesting spouse, or to undermine the requesting spouse’s ability to reason independently and be able to do what is required under the tax laws. In this case, the husband’s physical abuse and other actions (e.g., installing a buzzer on the mailbox to try and control their mail so she couldn’t see his business activities) helped her meet the conditions necessary for innocent spouse relief.

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Tax Glossary

Deficiency

The excess of the tax assessed by the IRS over the amount reported on your return.

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