Once the IRS receives a taxpayer’s request for innocent spouse relief, either election under 26 CFR § 1.6015-2 or equitable relief under 26 CFR § 1.6015-4, the non-requesting spouse is not left alone in the dark. The IRS must notify the non-requesting spouse of the relief requested by the other spouse, which the IRS must send to the non-requesting spouse’s last known address.
Last Known Address
Generally, a taxpayer’s last known address appears on the taxpayer’s most recently filed and properly processed Federal tax return, except when the taxpayer gives the IRS a clear and concise notification of a different address (26 CFR § 301.6212-2).
The IRS must provide the non-requesting spouse the opportunity to submit information to determine whether the requesting spouse should be given relief from joint and several liability; however, the non-requesting spouse is not required to do so. The IRS will share information that each spouse has submitted with the other spouse unless sharing such information would impair tax administration. The IRS will consider the information that the non-requesting spouse submits, which may include the following:
- the marriage status of the requesting and nonrequesting spouses
- the extent of what the requesting spouse knows about the erroneous items or underpayments
- the extent of what the knowledge and participation of the requesting spouse in the family business or financial affairs
- the educational level of the requesting spouse
- the extent of the benefit the requesting spouse had from the erroneous items
- transfers of assets between the requesting and the nonrequesting spouses
- any indication of fraud from either of the requesting or nonrequesting spouses
- the inequity that would result from holding the requesting party jointly or severally liable
- any matter relevant to the finding of whether relief should be granted to the requesting spouse
The IRS must also inform the non-requesting spouse of the preliminary determination. The latter may appeal an administrative decision to grant relief; however, they cannot appeal to deny relief. The appeal is filed with the Office of Appeals.