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Earlier this year, the Senate Finance Committee took a significant step toward modernizing and improving tax processes by introducing a discussion draft of the Taxpayer Assistance and Service or “TAS” Act. This groundbreaking draft, released by Committee Chairman Senator Mike Crapo, and Ranking Member Senator Ron Wyden, aims to address various inefficiencies and imbalances in the current tax system.
One of the key provisions of the TAS Act advocates for allowing courts to consider all relevant evidence when reviewing requests for equitable relief in innocent spouse cases.
To understand the significance of this provision, it’s essential to first understand the existing issue. Taxpayers who file tax returns as married filing jointly are jointly and severally liable for any resulting deficiency or tax due. IRC § 6015, the “innocent spouse” rules, provides relief from joint and several liability under certain circumstances. Under one avenue for relief, a taxpayer may qualify for IRC § 6015(f) equitable relief from deficiencies and underpayments when, considering all the facts and circumstances of a case, it would be inequitable to hold a joint filer liable for the unpaid tax or deficiency.
If the IRS denies or fails to respond in six months to a taxpayer’s request for equitable relief in an innocent spouse case, the taxpayer may request judicial review of the IRS’s denial. The taxpayer is generally prohibited from presenting evidence to a judge that the taxpayer did not previously present to the IRS, unless the evidence is newly discovered or was previously unavailable. This provision may be intended to encourage the IRS and taxpayers to compile a complete administrative record or resolve cases without litigation.
However, taxpayers – particularly unrepresented taxpayers – may not understand the significance of certain evidence or the consequences of failing to present it to the IRS. In other cases, taxpayers may present relevant evidence to the judge, a neutral third party, that they are reluctant to share with the IRS, such as evidence of domestic violence or abuse. The limitation on introducing evidence can prevent taxpayers who otherwise qualify for innocent spouse relief from receiving it, falling particularly hard on unrepresented taxpayers who did not understand these limitations when they were dealing with the IRS.
The proposed solution, which mirrors my recommendation in the National Taxpayer Advocate 2025 Purple Book, would create a fairer, more accurate tax system.
TAS Act § 306 would amend IRC § 6015(e)(7) to allow courts to consider all relevant evidence in reviewing requests for equitable relief in innocent spouse cases, regardless of whether the taxpayer could have provided it to the IRS in a prior administrative proceeding.
This would enable the court to make the correct decision based on the merits of an innocent spouse claim, benefiting all taxpayers requesting innocent spouse relief while also providing the biggest benefit to unrepresented taxpayers who did not understand the evidence submission requirements when dealing with the IRS.
The views expressed in this blog are solely those of the National Taxpayer Advocate. The National Taxpayer Advocate presents an independent taxpayer perspective that does not necessarily reflect the position of the IRS, the Treasury Department, or the Office of Management and Budget.