Deadline for equitable innocent spouse claims again upheld.

• Author: Beavers, James A.

The Third Circuit held that the two-year deadline in Regs. Sec. 1.6015-5(b)(1) for filing an equitable innocent spouse relief claim under Sec. 6015(f) is valid because it is a permissible interpretation of the statute. This is the second case in which a federal appeals court has overturned the Tax Court on the issue of whether the two-year statute of limitation period in the regulations is valid for claims filed under Sec. 6015(f).

Background

Denise Mannella and her husband Anthony filed joint federal income tax returns for the years 1996-2000. They agreed to the assessment of a deficiency for the year 1996. For the years 1997, 1998, 1999, and 2000, the couple did not fully pay the taxes their returns showed as due. Consequently, the IRS initiated collection procedures to recover the back taxes by sending the Mannellas separate notices of its intent to levy on June 4, 2004. The notices indicated, however, that the Mannellas each had the right to a collection due process hearing before such levy.

The IRS sent the notices to the Mannellas' correct address by certified mail, return receipt requested. IRS records indicate that it received signed return receipts dated June 17, 2004, for both notices at an IRS Service Center. Denise asserted, however, that her husband signed her name on the return receipt and did not inform her that the notice had arrived until more than two years after its arrival, an assertion the IRS did not challenge.

On November 1, 2006, after learning of the notice of intent to levy and speaking with an attorney, Denise filed two applications under Secs. 6015 (b), (c), and (f), for innocent spouse relief from joint and several liability on the couple's joint returns filed for the years 1996-2000. The IRS, however, issued Denise a notice of determination dated May 3, 2007, denying her relief because she had not filed her claim within two years of June 4, 2004, the date that the IRS took its first collection action against her by mailing her notice of the intent to levy.

Tax Court Proceedings

In response to the IRS's rejection of her applications, Denise filed a petition for relief with the Tax Court, arguing that she never received her notice from her husband and therefore the two-year period for seeking innocent spouse relief should not have begun to run against her. She did not argue, however, that the regulation setting a two-year deadline for requesting relief under Sec. 6015(f) was invalid. The IRS moved for summary...