Audrey Patten, a member of the tax clinic at the Legal Services Center of Harvard Law School, has made available for download her article “Significant Changes in New Draft Form 8857”, published on the Procedurally Taxing blog. The abstract is as follows:
Submitting Internal Revenue Form 8857 to the IRS is the starting point for seeking administrative relief from joint and several liability under IRC §6015, generally called “innocent spouse relief.” The current version of Form 8857 dates to 2014 and has come under scrutiny for being difficult to understand, especially for pro se taxpayers, and unclear as to what relevant information and documentation a taxpayer should submit. With the Taxpayer First Act’s new requirement in IRC §6015(e)(7) that the Tax Court must limit its review of innocent spouse cases to the administrative record, Form 8857, and its use in eliciting relevant taxpayer information, is now crucial to setting up a strong Tax Court case.
The IRS has released a draft update to Form 8857, with a revision date of June 2021. The new form has several improvements. These include various changes that the Low Income Taxpayer Clinic at Harvard suggested in a written comments submitted to the IRS last year and that have been advocated by other LITCs and the ABA. The draft form’s layout and presentation, however, will still be challenging to many taxpayers, especially those with limited resources, education, or writing skills. Practitioners must therefore continue to be mindful about preparing well-crafted narrative statements for clients that track the equitable relief factors in Rev. Proc. 2013-34 and that synthesize relevant facts and documentation to ensure a complete administrative record.
Posted by Marin Larkin, Associate Editor, Wealth Strategies Journal.