Effects of Relief Provisions on the “Non-Innocent Spouse”
Once a spouse (the requesting spouse) asks for innocent spouse relief, the other spouse (the non-requesting spouse) must be given the chance to participate in the proceedings (King v. Comm, 115 T.C. 118 (2000)). In Corson v. Comm, 114 T.C. 354 (2000), for example, the IRS and the requesting spouse had reached an agreement, but the Court denied relief until the non-requesting spouse had the chance to participate in the proceedings.
The non-requesting spouse is entitled to file a written protest and receive an Appeals conference in regard to the IRS’ decision to grant relief to a requesting spouse (Rev. Proc. 2003-19, 2003-5 IRB 371). Note, however, that the non-requesting spouse isn’t entitled to file an independent petition with the Tax Court (Maier v. Comm, 119 T.X. 267 (2002), aff’d, No. 03-4509 (2d Cir., 02/26/04). Also see “Rev. Proc. 2003-19” below.
To ensure that the non-requesting spouse gets the opportunity to participate in proceedings, the IRS must send notice to that spouse’s last known address. In addition, information provided by one spouse may be shared with the other at the request of either spouse.
Rev. Proc. 2003-19 does not grant the non-requesting spouse the right to appeal to the Tax Court a decision by IRS to grant or deny relief to the requesting spouse. Thus, the non-requesting spouse generally has no recourse once IRS makes a final innocent spouse determination. If a spouse requesting innocent spouse relief petitions the Tax Court, however, the Court's rules allow the non-requesting spouse to become a party to the proceeding.
Procedures:
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The non-requesting spouse must request an Appeals conference, in writing, within 30 calendar days of the mailing date of the notification letter. Such a request suspends further processing of the requesting spouse's claim for relief pending its outcome.
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If only the non-requesting spouse files a written protest requesting an Appeals conference, IRS will notify the requesting spouse of the non-requesting spouse's request. If after the Appeals conference with the non-requesting spouse IRS proposes to change the preliminary determination, the requesting spouse will have an opportunity to request an Appeals conference before the final determination.
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If only the requesting spouse files a written protest requesting an Appeals conference, IRS will notify the non-requesting spouse of the requesting spouse's protest and hold an Appeals conference with the requesting spouse. If Appeals proposes to increase the relief recommended, the non-requesting spouse will have an opportunity to request an Appeals conference.
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If both spouses file written protests requesting Appeals conferences, IRS will notify each of the other's request and hold separate Appeals conferences with each spouse, with both spouses permitted to submit information. However, IRS may hold a joint Appeals conference instead of separate ones.