Innocent-Spouse Rules under review by IRS

IRS attorneys report the Internal Revenue Service is currently reviewing its innocent-spouse rules and plans to reveal changes in as early as a few weeks. These IRS tax lawyers note that a spokesperson for the IRS, Terry Lemons, was recently quoted as saying “We are seeing from our review so far that clearly our procedures need to be improved in this area [referring to the IRS’ review of the innocent-spouse rules]”.

Part of the problem, according IRS tax attorneys and numerous members of Congress, is the two-year rule which causes many taxpayers seeking relief under the rules to miss the filing deadline. According to some IRS attorneys this is often due to a spouse hiding the mail or otherwise concealing the tax liability from the innocent-spouse until the deadline has passed.

IRS tax lawyers point out that most taxpayers don’t understand that once the IRS initiates a refund offset, which takes place when the agency withholds a taxpayer’s refund to cover unpaid back taxes owing, the clock for filing innocent-spouse protection starts. Sometimes, IRS attorneys say the innocent-spouse’s situation is further compounded by such things as domestic abuse, divorce, death and/or fraud.

Most IRS attorneys will tell you that getting innocent-spouse protection is difficult, even for those few savvied taxpayers who manage to seek relief within the two year period. The agency requires the innocent-spouse to prove they didn’t know, or did not have reason to know, that their spouse had incurred unpaid back taxes.

Among the considerations, IRS tax lawyers say the agency will look at the innocent-spouse’s education level and the couple’s financial situation. If the IRS believes the innocent-spouse actually benefited from the tax avoidance, IRS attorneys assert the agency will reject the claim and hold the innocent-spouse liable for the back taxes owing.

If you are an innocent-spouse who is now learning about back taxes incurred by your spouse, IRS attorneys suggest you seek immediate help from and IRS tax lawyer or other tax professional. Sitting around waiting for your tax problems to work-out themselves will typically result in the IRS initiating collection efforts in the form of IRS liens, IRS levies, and/or IRS wage garnishment all the while the amount of back taxes you owe continues to increase due to penalties and interest.

For women and/or men who have never been involved in their family’s finances, IRS attorneys caution it is prudent to take a greater role in understanding your financial situation. Don’t just blindly sign a joint tax return without understanding at least something about your family’s income and expenses. Being more proactive may help avoid a surprise notice from the IRS that you owe back taxes.


Segal, Cohen & Landis
9100 Wilshire Blvd. Ste. 601E
Beverly Hills, CA 90212
(310) 285-3999

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