Bryan Camp has published an article on the TaxProf Blog, titled “Lesson From The Tax Court: The Innocence Requirement In § 6015(c) Proportional Relief”, which discusses Tara K. Tobin (Petitioner) and Jeffrey Tobin (Intervenor) v. Commissioner, T.C. Summ. Op. 2021-36 (Nov. 16, 2021) (Judge Guy). The article begins as follows:
Section 6015 allows taxpayers to obtain relief from an otherwise joint and several liability. The statute contains three related provisions allowing relief. Siblings. First is the eldest child, traditional innocent spouse relief. It was formerly in §6013(e) and is now found in §6055(b). Second is the quite middle child, a proportionate relief provision that basically permits unwinding the jointly filed return. That’s in §6015(c). Third is the wild child, an equitable relief provision that permits relief when it would be unfair to impose joint liability. That’s in §6015(f).
Of these three spousal relief provisions, the wild child §6015(f) gets most of the attention, at least in court, because it is a very facts-and-circumstances determination and so leads to the most disputes between a requesting spouse and the IRS. There is also robust case law on the bossy oldest child §6015(b) because it has been around the longest, since 1971.
Today’s lesson is about §6015(c), the oft overlooked middle child. While, arguably, all three provisions involve some concept of innocence, we learn today a crucial difference between how that concept works for (c) relief and (b) relief. In Tara K. Tobin (Petitioner) and Jeffrey Tobin (Intervenor) v. Commissioner, T.C. Summ. Op. 2021-36 (Nov. 16, 2021) (Judge Guy), an IRS audit disclosed multiple items of unreported income. Ms. Tobin asked for §6015(c) relief, agreeing to take responsibility for her unreported income items and leaving Mr. Tobin responsible for his. Mr. Tobin objected, claiming that Ms. Tobin was not innocent enough to qualify for proportional relief. In a short but useful lesson, we learn why the Tax Court decided for Ms. Tobin. Details below the fold.
Click here to see the full article: “Lesson From The Tax Court: The Innocence Requirement In § 6015(c) Proportional Relief”
Posted by Marin Larkin, Associate Editor, Wealth Strategies Journal.