Nonrequesting Spouse May Seek Administrative Appeal of Innocent Spouse Relief

A recent revenue procedure provides guidance on the administrative appeal rights of a spouse or former spouse of a taxpayer requesting relief under Sec. 6015. Prior to publication of this procedure, only the requesting spouse had the right to file a written protest and receive an administrative conference with the IRSs Office of Appeals (an Appeals conference).

In Sec. 6015(h)(2), Congress ex-pressed its intent that the nonrequesting spouse have notice of, and be involved in, Sec. 6015 administrative proceedings. Thus, the IRS has determined that the nonrequesting spouse may file a written protest and receive an Appeals conference on the IRSs decision to grant partial or full relief to the requesting spouse. However, the nonrequesting spouse may not appeal an IRS decision to deny relief to the requesting spouse.

Administrative Appeals

In general, the Service will issue a preliminary determination letter to the requesting spouse. If this determination grants full or partial relief, the IRS will suspend processing of the claim for 45 days, pending an appeal by the nonrequesting spouse. It will notify both spouses that the nonrequesting spouse has the right to file a written protest and request an Appeals conference to protest the preliminary determination. The nonrequesting spouse must request an Appeals conference, in writing, within 30 calendar days of the notification letter mailing date.

If only the nonrequesting spouse requests an Appeals conference, the Service will notify the requesting spouse of the request. The requesting spouse will then have an opportunity to request an Appeals conference to present his or her position before any final determination.

If only the requesting spouse files a written protest requesting an Appeals conference, the Service will notify the other spouse. If Appeals proposes to increase the relief recommended in the preliminary determination letter, the nonrequesting spouse will have an opportunity to request an appeals conference to present his or her position before the final determination.

If both spouses file written protests requesting appeals conferences, the Service will notify each spouse of the others request. It will hold separate Appeals conferences with each spouse; both spouses will be permitted to submit information. As a discretionary matter, the IRS may hold a joint Appeals conference instead of separate ones. Appeals conferences may be conducted by telephone, correspondence, face-to-face meetings or by a combination of these methods.

Tax Court

Appeals will issue the notice of final determination to the requesting spouse, unless he or she executes a waiver under Sec. 6015(e)(5). It will also notify the nonrequesting spouse of the final determination. Sec. 6015(e)(1)(A) allows the requesting spouse to petition the Tax Court from the notice of final determination. However, no provisions allow the nonrequesting spouse the same option; see Maier, 119 TC 267 (2002). If the requesting spouse petitions the Tax Court, Sec. 6015(e)(4) and Tax Court rules allow the nonrequesting spouse to become a party.

Rev. Proc. 2003-19, IRB 2003-5, 371