Tax News

CCH (cch.taxgroup.com) reports:

The Tax Court lacked jurisdiction over a taxpayer's petition challenging the IRS's denial of equitable relief under the innocent spouse rules. The relief requested on Form 8857, Request for Innocent spouse Relief (and Separation of Liability and Equitable Relief), was denied by the IRS in a Letter 3279 stating that it was a final notice of determination. The taxpayer failed to file her petition with the Tax Court within 90 days of the notice. Although the taxpayer filed a petition within 90 days of the IRS's rejection of a second Form 8857 in Letter 3657C, the second request essentially duplicated the first request. The taxpayer did not come within the exceptions that would permit a second election to be a qualifying election for which a second final determination could be made. Additionally, the IRS's second letter could not be considered the IRS's final determination. In comparison to the first letter, the Letter 3657C did not state that it was a final notice and was consistent with its description in the Internal Revenue Manual (IRM) as a letter denying relief when relief has been previously requested and denied. Statements in the IRM that a notice of final determination might be reconsidered on the basis of new information did not have the force of law and were not binding. Because the second Form 8857 was not a qualifying request and did not entitle the taxpayer to a second determination, the taxpayer's argument that the Tax Court had jurisdiction because the IRS failed to issue a notice of determination within six months of the taxpayer filing her second request was also rejected. The Tax Court also lacked jurisdiction to enjoin the IRS's collection action based on the untimely petition.
J.A. Barnes, 130 TC No. 14, Dec. 57,463
Other References:
Code Sec. 6015
CCH Reference - 2008FED ¶35,192.815
Tax Research Consultant
CCH Reference - TRC INDIV: 18,052.20