APPEALS PROCESS FOR INNOCENT SPOUSE RELIEF
If you are wondering what your rights are to appeal the IRS’s decision to deny your innocent spouse request, you probably have already received letter 3016 (the preliminary decision of the IRS) and the news that they will be denying your request for innocent spouse relief. Don’t worry, you still have options, but they are time sensitive. The most important thing to know is that you can appeal the decision within 30 days of the date the letter was issued with a statement as to why you believe the IRS’s decision is incorrect. You also have the opportunity to submit additional documentation to support your case that was not previously submitted with Innocent Spouse Relief Form 8857.
If you miss the 30 day deadline, you will lose your right to appeal the IRS’s decision.
So, what does this mean?
TIME FOR TAX COURT
You still have the right to petition the Tax Court. You will first have to wait and receive the Final Determination letter the IRS will send you. Then, you will have 90 days to petition the Tax Court. This will allow your case to be heard and the information previously submitted to the IRS to be reviewed de novo (from the beginning). The court will independently decide based on the information presented to them whether innocent spouse relief should be granted and will not consider the determination the IRS made when coming to their decision.
However, petitioning the Tax Court is not your last option to resolve the issue. In fact, you may have an additional opportunity before your case ever reaches Tax Court. After you have filed your petition with the Tax Court, the court will issue you a standing pretrial notice, notifying you that the IRS Appeals Office will most likely contact you. This is for the purpose of trying to settle your case with the IRS before it reaches Tax Court. In fact, almost 90% of cases are settled before they reach Tax Court. The standing pretrial notice is also to give you additional information such as how to get ready for trial.
WHEN WILL YOUR CASE BE HEARD?
If you are unable to settle your case with the IRS and it does in fact go to Tax Court, it could take some time before your case is heard. Because the Tax Court is a traveling court, it will depend on when the Tax Court will be coming to your area and how many cases are already scheduled to be heard. There is good news though, if you are to win your case in Tax Court you can potentially have the IRS reimburse you for your attorney’s fees.
It is important to know that while going through this process the IRS will still be adding penalties and interest to the balance due. So, if after appealing the IRS’s decision and petitioning the tax court, your request for innocent spouse relief is denied you may end up having to pay those penalties and interest.
IN CONCLUSION
Innocent spouse relief can be a powerful tool when trying to separate yourself from a tax debt incurred by filing a married filing joint return. The process however is not always an easy one (nothing ever is with the IRS). Be prepared to spend time in submitting the forms and formulating a good argument as to why innocent spouse relief should be granted. If your argument is not constructed properly, the IRS will most likely deny your claim. Consulting with legal representation is something that should be considered if you are in fact denied on your initial submission of innocent spouse relief.
Related Articles:
1) 5 Things To Know Before Filing For Innocent Spouse Relief
2) Innocent Spouse vs. Injured Spouse: 5 Differences You Need To Know
3) Separation of Liability: A Tool For Splitting Tax Debt After Divorce
4) IRS Tax Debt Relief: Do You Qualify For Equitable Relief?
5) Tax Refund Offset Going To Spouse’s Debt: Injured Spouse Relief May Help
6) Signature Under Duress: An Alternative To Innocent Spouse Relief
