In case you are not aware, during July 2011, the Internal Revenue Service issued Notice 2011-70, which made a significant change to stipulations for individuals looking for spousal relief under IRC 6015(f). This notice may help you protect your clients from liability for either underpayment or nonpayment of taxes caused by dishonesty by their spouses. Prior to this notice, there were significant limitations as to when innocent spouse tax relief could be claimed. Notice 2011-70 lifts the previously enforced two-year limit.
If you have not done so yet, I suggest you review the Technical Provisions of IRC 6015, including 6015(b) which “provides an election for relief from a deficiency/understatement of tax liability”, 6015(c) which “provides an election to allocate a deficiency/understatement” and 6015(f), which “provides IRS discretion to grant equitable relief from deficiencies and underpayments, if the relief provisions under IRC 6015(b) or IRC 6015(c) do not apply”.
Should you have questions concerning applying Notice 2011-70 to a client’s case, please feel free to contact me.