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Post details: Regulation Imposing Time Limit on Request for Equitable Innocent Spouse Relief Was Invalid Interpretation of Statute (Lantz, TC)
04/08/09
Regulation Imposing Time Limit on Request for Equitable Innocent Spouse Relief Was Invalid Interpretation of Statute (Lantz, TC)
CCH (cch.taxgroup.com) reports:
In a decision reviewed by the court, the Tax Court held that Reg. §1.6015-5(b)(1), which imposes a two-year limitations period on requests for equitable relief from joint income tax liability, was inconsistent with and was an invalid interpretation of Code Sec. 6015(f). Thus, the IRS abused its discretion by failing to consider all the facts and circumstances when it denied an individual's claim for innocent spouse relief solely on the basis that the claim was filed more than two years after the IRS's first collection action. Further proceedings were necessary to determine the individual's tax liability.
Applying the standard of review set forth in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. (467 US 837 (1984)), the Tax Court first determined that Congress had not directly spoken on the issue because it did not impose a time limit in the equitable relief provision of Code Sec. 6015(f), unlike the limitations period it imposed in Code Sec. 6015(b) and
(c).
Second, the Tax Court determined that the regulation was not a permissible construction of the statute because it was contrary to the intent of Congress. Congress intended to provide two kinds of remedies, and it was not reasonable for the IRS to adopt a deadline for the equitable remedy of Code Sec. 6015(f) that was no more lenient than the two-year deadline for the traditional remedy in Code Sec. 6015(b) and
(c).
C.M. Lantz, 132 TC No. 8, Dec. 57,784
Other References:
Code Sec. 6015
CCH Reference - 2009FED ¶35,192.023
CCH Reference - 2009FED ¶35,192.25
Tax Research Consultant
CCH Reference - TRC INDIV: 18,052.10
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