Neilson v. Comm'r of Internal Revenue

1 Analyses of this case by attorneys

  1. Tax Court in Brief | Reynolds v. Comm’r | Spousal Relief, Substantial Benefit, Constructive Knowledge, and No Divorce

    Freeman LawDecember 6, 2022

    burden of proving that he or she is entitled to section 6015 relief. Rule 142(a); Alt v. Commissioner, 119 T.C. 306, 311 (2002), aff’d, 101 F. App’x 34 (6th Cir. 2004).When considering a request for relief, the Tax Court applies a de novo standard of review and the scope of review is limited to the administrative record; however, at the time the petition was filed, the scope of review was de novo as Congress had not yet enacted Section 6015(e)(7). SeePorter v. Commissioner, 132 T.C. 203, 210 (2009); Sutherland v. Commissioner, 155 T.C 95, 105–06 (2020).The Tax Court may consider the guidance set forth in Revenue Procedure 2013-34, but its determination ultimately rests on an evaluation of all the facts and circumstances. SeePullins v. Commissioner, 136 T.C. 438–39; Johnson v. Commissioner, T.C. Memo. 2014-240, at *10.The Tax Court does not have jurisdiction to adjudicate whether a tax, fine, penalty, or addition to tax was discharged under the Bankruptcy Code. Neilson v. Commissioner, 94 T.C. 1, 9 (1990); Ashmore v. Commissioner, T.C. Memo. 2016-36, at *8.Insights:Married taxpayers should proactively seek to determine whether their spouse is erroneously reporting earnings or deductions in determining income.If facts exist that should give a spouse concern regarding whether a spouse may be reporting income inaccurately, the other spouse should seriously consider filing a separate return.After discovering serious tax reporting failures by a spouse, a taxpayer should seriously consider whether a divorce is necessary to qualify for innocent spouse relief. As part of this consideration, the spouse should consult with competent tax and divorce counsel.The IRS took three years to issue a decision on the petitioner wife’s request for relief. If prospective relief is possible but doubtful, taxpayers should do all they can to prepare to make payment on any deficiencies, additions, and penalties while awaiting a decision.[View source.]