IRS changes procedures for equitable innocent spouse cases.The Tax Court recently held that it lacks jurisdiction under Sec. 6015(e) to review the Service's Sec. 6015(f) determinations in cases in which a deficiency has not been determined against the taxpayer (Billings, 127 TC No. 2 (7/25/06)); for a discussion, see News Notes, "Innocent Spouse Relief," TTA TTA Telecommunications Technology Association (Korea) TTA Teacher Training Agency (UK) TTA Triangle Transit Authority (Raleigh/Chapel Hill/Durham, North Carolina, USA) , October 2006, p. 568. In light of this decision, the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. subsequently issued this notice, which provides that such cases should not be settled; instead, a motion to dismiss should be filed. This notice supersedes Chief Counsel Notice N(35)000-338 (6/5/00), which provided that the Service's Sec. 6015(f) determinations are reviewable by any court. Background Generally, married taxpayers who file joint Federal income tax returns are jointly and severally Jointly and Severally 1. A legal term describing a partnership in which individual decisions are bound to all parties involved and thus undivided. 2. A term used in underwriting syndicates to refer to the distinct responsibility of individual companies to sell a certain liable for the tax under Sec. 6013(d). Sec. 6015 provides procedures for seeking relief from joint and several liability, and is commonly referred to as "innocent spouse relief" Sec. 6015(f) authorizes the IRS to prescribe procedures for providing "equitable relief" when it would be inequitable to hold one individual liable for any unpaid tax or deficiency relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a joint return. Under Sec. 6015(e), however, the Tax Court only has jurisdiction "[i]n the case of an individual against whom a deficiency has been asserted." The filing of a petition in response to a final notice of determination under Sec. 6015(f) or after the claim has been pending for six months is often referred to as a "stand-alone" proceeding, because jurisdiction is predicated on Sec. 6015(e) and not deficiency jurisdiction under Sec. 6213. The only issue pending in a stand-alone case is whether the requesting spouse is entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to relief from joint and several liability. In Billings, the Tax Court held that it lacks jurisdiction in stand-alone cases when the IRS has not determined a deficiency. Two recent appellate court A court having jurisdiction to review decisions of a trial-level or other lower court. An unsuccessful party in a lawsuit must file an appeal with an appellate court in order to have the decision reviewed. decisions are in accord with Billings--Ewing, 439 F3d 1009 (9th Cir. 2006), pet. for reh'g en banc [Latin, French. In the bench.] Full bench. Refers to a session where the entire membership of the court will participate in the decision rather than the regular quorum. In other countries, it is common for a court to have more members than are den. (8/10/06), and Bartman, 446 F3d 785 (8th Cir. 2006), pet. for reh'g en banc den. (8/3/06). In holding that the Tax Court had no jurisdiction to hear the case in Ewing, the Ninth Circuit vacated the lower court's decision, and thus nullified nul·li·fy tr.v. nul·li·fied, nul·li·fy·ing, nul·li·fies 1. To make null; invalidate. 2. To counteract the force or effectiveness of. its holdings that the taxpayer was entitled to relief and that the Tax Court could consider evidence outside the administrative record when reviewing the Service's determination under Sec. 6015(f). Procedures for Sec. 6015(f) Stand-Alone Cases Under the notice, the new procedures should be followed in Tax Court stand-alone cases in which the IRS has not determined a deficiency. Because these cases can now be dismissed on jurisdictional grounds, Sec. 6015(f) stand-alone cases in which the Service has not determined a deficiency should not be settled. Instead, motions to dismiss for lack of jurisdiction should be filed. Noncalendared cases: In all noncalendared Sec. 6015(0 stand-alone cases without a deficiency determination, a motion to dismiss for lack of jurisdiction should be filed. The motion should be filed in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. the answer, if required, and the notice of petition and right to intervene on the nonrequesting spouse, which is normally required under Tax Court Rule 325, should not be served until the Tax Court rules on the motion to dismiss; see Chief Counsel Directives Manual, 35.2.2.12.2(2)(3). Calendared cases: A motion to dismiss should be filed in all Sec. 6015(f) stand-alone cases in which the IRS has not determined a deficiency, even if the case has been fully or partially briefed or submitted. In addition, it may be necessary for the Service to file a motion for continuance The adjournment or postponement of an action pending in a court to a later date of the same or another session of the court, granted by a court in response to a motion made by a party to a lawsuit. while the motion to dismiss is pending once the case is calendared. Multiple tax years: For cases involving multiple tax years in which the IRS has determined a deficiency for one or more of the tax years at issue, but not for all of the tax years at issue, the procedures outlined above should be followed only for the tax years in which no deficiency has been determined. CHIEF COUNSEL NOTICE CC 2006-020 (8/25/06) David O'Driscoll, J.D., LL.M LL.M Legum Magister (Master of Laws) . |
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