IRS Eases Innocent Spouse Rule

July 27, 2011

Despite winning a number of court victories upholding its position, the IRS has decided to change that position and allow requests for equitable relief under the innocent spouse rules more than two years after the start of collection action. Originally designed to require prompt action by the taxpayer while evidence was still fresh, the two-year limitation was widely criticized as being unfair because one spouse may conceal from the other the fact that collection action has begun. In Notice 2011-70 (PDF) the IRS says it will no longer enforce the two-year limitation.