The mission of the Independent Office of Appeals (Appeals) is to resolve tax controversies, without litigation, on a basis which is fair and impartial to both the Government and the taxpayer in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service. Appeals accomplishes its mission by considering protested and Tax Court cases and negotiating settlements in a manner which ensures Appeals employees act in accord with the Taxpayer Bill of Rights (TBOR) in every interaction with taxpayers. See IRM 8.1.1.1, Accomplishing the Appeals Mission.

IRC 66, Treatment of Community Income, and its related regulations.

IRC 6015, Relief from Joint and Several Liability on Joint Return, and its related regulations. See also the related proposed regulations 78 FR 49242 (issued on August 13, 2013) and 80 FR 72649 (issued November 20, 2015).

Rev. Proc. 2003-19 provides guidance on the NRS’s administrative appeal rights.

Rev. Proc. 2013-34 provides guidance on requests for equitable relief from income tax liability under IRC 66(c) or IRC 6015(f).

Under Delegation Order 8-1 and Delegation Order 8-8 (Rev. 1), Appeals Team Managers (ATMs) and Appeals Team Case Leaders (ATCLs) are authorized to settle protested and Tax Court cases. This does not include the authority to set aside a closing agreement. See IRM 1.2.2.9.8 , Delegation Order 8-8 (Rev. 1) (formerly DO-66, Rev. 15), and IRM 1.2.2.9.1 for Delegation Order 8-1 (formerly DO 60, Rev. 7). Therefore, the ATM or ATCL will sign the following letters for cases under their jurisdiction:

The Director, Case and Operations Support is the executive responsible for Appeals’ policy and procedural guidance.

The Director, Policy, Planning, Quality and Analysis (PPQA) is responsible for program oversight.

PPQA provides trends and data analyses and detailed summary reports for Appeals.

Florence APS is responsible for working validation reports that can be generated from either the ACDS AMATCH sub-system or ISTS. The ACDS AMATCH sub-system matches ACDS information against data received from the Innocent Spouse Tracking System (ISTS) to ensure cases are received and in the proper status on ISTS. The four ACDS/ISTS AMATCH report listings are shown below:

The table lists commonly used acronyms and their definitions:

Also, see Exhibit 8.1.1-1, Common Terms Used by Appeals.

The following table lists related IRM guidance:

Appeals Policy Innocent Spouse Program page.

Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights.

Requests for innocent spouse relief are considered by Compliance Area Office examiners during open field examinations and by Cincinnati Centralized Innocent Spouse Operation (CCISO) otherwise. See IRM 25.15.1.1.3, Responsibilities. A post-assessment claim occurs when a claim is filed on a liability that is already assessed.

Appeals considers an innocent spouse request as part of a standalone (post-assessment) case or a deficiency (pre-assessment) case, including the following:

If the RS is granted relief under IRC 6015 from the income tax, relief also applies to the related penalties, additions to tax, additional amounts, and interest.

If Compliance makes a preliminary determination to fully or partially deny relief, the RS may appeal this determination to deny relief. The NRS may appeal the preliminary determination to the extent relief is granted. Therefore, Compliance’s preliminary determination to partially deny relief could result in appeals by both spouses (i.e. the RS appeals the partial denial and the NRS appeals the partial allowance). The NRS can not appeal a decision to deny relief to the RS.

IRS can disclose to either spouse information with respect to the joint return account, such as the "balance due" disclosed to either spouse. See IRM 11.3.2.4.1, Individuals, and 11.3.2.4.1.1, Disclosure of Collection Activities with Respect to Joint Returns.

Request for information concerning divorced or separated spouses beyond that provided in IRC 6103(e)(8) should be referred to the Disclosure Office. See IRM 25.15.1.9.2, Authorized Disclosure Rules.

Do not disclose the RS’s personal information to the NRS. Similarly, do not disclose the NRS’s personal information to the RS. This includes not disclosing the following:

The effect of innocent spouse relief is to make a spouse no longer liable for a particular tax. See

Joint return tax years, whether one or both spouses request innocent spouse relief, are controlled on ACDS in a work unit number that includes three records, as shown below:

The joint return is controlled as the ACDS key case. The RS and the NRS are each controlled as a related case within the same work unit number.

The related case records are created for the following reasons:

Verify the correct card-in procedures for each ACDS record (joint, RS, and NRS), as shown in the following IRM sections:

Special instructions apply to carding a case for married taxpayers who filed separate returns in community property states where one (or both spouses) is requesting equitable relief.

This type of case requires special card-in procedures to create a work unit that includes two records — one for the RS and one for the NRS.

The RS is controlled as the key case, and the NRS is controlled as a related case.

If both spouses are docketed under separate docket numbers, each spouse must be controlled as a separate key case work unit. Enter cross reference information in the ACDS "Notes" field.

Verify the correct card-in procedures for each ACDS record (RS and NRS), as shown in the following IRM sections:

Innocent Spouse (INNSP) is one of the ACDS categories of cases on the Appeals Inventory Report (AIR). See IRM 8.10.1.3.1, Appeals Inventory Reports (AIR). For a case to be included in the INNSP category, the ACDS Feature Code must contain "SD" (Spousal Defense) and the TYPE Code cannot be:

Whether a case is initially received as an innocent spouse case or identified as an innocent spouse case during Appeals consideration, verify that ACDS properly reflects the "SD" feature code for appropriately including the case in the INNSP category for a post-assessment claim. If the innocent spouse request is part of a pre-assessed deficiency case, the "SD" feature code will alert APS, along with Form 5402 instructions, to complete all closing actions for the deficiency and innocent spouse issues.

A separate work unit number is needed for the innocent spouse case when the issue is raised during Appeals consideration of a CDP case. See IRM 8.20.5.29.6, CDP/EH and Innocent Spouse Case Carding.

If both spouses file a request for relief, even for the same tax year(s), control each spouse’s claim request with a separate ACDS work unit number. Verify that IDRS and ISTS separately reflect both spouses’ claim requests according to the Primary/Secondary (P/S) indicator. See IRM 8.7.12.4, IDRS/ISTS Controls.

A spouse or former spouse may be relieved of joint and several tax liability under IRC 6015(b) if the RS meets all of the following five requirements:

The RS is not entitled to relief if the Service establishes the spouses transferred property to one another as part of a fraudulent scheme. IRM 8.7.12.5 (6).

The RS may elect to allocate a deficiency with respect to a valid joint return. Relief may be available to both spouses, if each spouse is eligible for and elects to allocate a deficiency. If only one spouse elects to allocate the deficiency, the liability of the NRS is not affected. See 26 CFR 1.6015-3.

To qualify for relief under IRC 6015(c), the RS must meet the following requirements:

Burden of proof - Except for establishing actual knowledge, the RS must establish that all of the qualifications for making the election are satisfied and that none of the limitations (including the limitation relating to transfers of disqualified assets) apply. The RS must also establish the proper allocation of the erroneous items. See IRM 8.7.12.5.2.1, Allocating a Deficiency Under IRC 6015(c), IRM 8.7.12.5.2.2.1, Actual Knowledge Invalidates Election to Allocate Deficiency, and 26 CFR 1.6015-3(d)(3).

The IRS may grant relief from joint and several liability to a RS, under procedures prescribed by the Secretary (see Rev. Proc. 2013-34), if -

Rev. Proc. 2013-34 provides guidance for the RS seeking equitable relief from income tax liability under IRC 66(c), Spouse Relieved of Liability, or IRC 6015(f), Equitable Relief. Under IRC 6015(b) and (c), relief is available only from an understatement (deficiency). However, IRC 6015(f) applies to understatements and underpayments (unpaid self-assessed taxes on original and amended returns).

A RS must satisfy all of the threshold conditions in section 4.01 of Rev. Proc. 2013-34 to be eligible for consideration of equitable relief under IRC 6015(f). For requests for relief under IRC 66(c), the first two threshold conditions don’t apply (i.e. "Joint Return Filed" and "Unavailability of IRC 6015(b) or IRC 6015(c))." See IRM 8.7.12.5.3.1, Eligibility Threshold Requirements for Equitable Relief (Section 4.01 of Rev. Proc. 2013-34). The IRS may relieve a RS who satisfies all the applicable threshold conditions for relief under IRC 66(c) or IRC 6015(f) if, taking into account all the facts and circumstances, the IRS determines that it would be inequitable to hold the RS liable for the income tax liability.

If the threshold requirements in section 4.01 of Rev. Proc. 2013-34 are met, section 4.02 identifies conditions under which the IRS will make streamlined equitable relief determinations under IRC 6015(f) or IRC 66(c). See IRM 8.7.12.5.3.2, Streamlined Determinations under IRC 66(c) and IRC 6015(f) - (Section 4.02 of Rev. Proc. 2013-34). If the section 4.02 conditions are not met for a streamlined equitable relief determination, the IRS will consider factors in section 4.03 of Rev. Proc. 2013-34 for determining whether to grant equitable relief.

Section 4.03 of Rev. Proc. 2013-34 provides a non-exclusive list of factors for consideration in determining whether relief should be granted because it would be inequitable to hold the RS liable. The factors in section 4.03 will also apply in determining whether to relieve a spouse from income tax liability resulting from the operation of community property law under IRC 66(c).

Time for requesting relief - A request for relief under IRC 6015(f) may be made with respect to any portion of any liability that:

Res judicata and collateral estoppel- See IRM 8.7.12.5 (7).

Form 8857, Request for Innocent Spouse Relief, and Pub 971, Innocent Spouse Relief, notify the RS that the IRS is required by law to contact the NRS during the relief consideration process. Do not disclose a spouse’s personal information to the other spouse. This includes the other spouse’s new last name, location, or telephone number; any information about the other spouse’s employment, income or assets, or the income level at which an outstanding account (suspended from collection activity) will be reactivated. For more information, see IRM 25.15.1.9.2, Authorized Disclosure Rules.

The IRS is aware of the sensitive nature of innocent spouse relief requests involving alleged abuse of the NRS against the RS. In some cases, the file may contain information that shows that the RS was previously abused and fears harassment or retaliation from the NRS in response to filing the request for relief. If abuse is alleged, contact the RS to determine if it is necessary to take additional precautions to conceal the RS’s location. Document any actions taken in the case activity record.

If there is a need to conceal the RS’s location, additional mailing precautions are needed if the ATE and RS are in the same geographic location (e.g. in the same state). For correspondence communications between Appeals and the NRS, follow the procedures below:

The NRS is entitled to receive all required letters, even if the NRS is deceased. Usually, the RS will notify the IRS if the NRS is deceased. Also, a deceased taxpayer can also be identified on IDRS as indicated below:

If IDRS does not indicate the NRS is deceased, request from the RS or representative the following information:

If IDRS does not identify the NRS as deceased and Appeals receives information establishing that the NRS is deceased, send a request to APS (with a copy of the death certificate to) APS to:

For a deceased NRS, determine the proper person who can represent the NRS. Ask the RS if he/she knows whether the NRS has an estate. In addition, research IDRS using CC INOLE with definer G, to determine if the IRS is aware of an estate. If yes, research using CC CFINK for POA information under the EIN of the estate. A fiduciary (trustee, executor, administrator, receiver, or guardian) stands in a position of and acts as the taxpayer, not as an appointee or representative. A fiduciary does not need to complete a third party authorization unless the fiduciary wishes to authorize someone else to act in place of the decedent. If necessary, obtain the following:

See the following for guidance on addressing letters to deceased taxpayers:

For docketed cases, notify the assigned Counsel attorney that the NRS is deceased.

Document the case activity record with actions and discussions, such as the following:

Per IRC 66(a), Treatment of Community Income Where Spouses Live Apart, spouses must report their income according to the rules of IRC 879(a), instead of following the general rule that community income is taxed one-half to each spouse domiciled in a community property state, if all of the following criteria are met:

IRC 879(a) - If all of the conditions in IRM 8.7.12.7.1 (1) are met, the spouses in community property states must follow the income reporting rules identified below:

For the purposes of determining if earned income is "transferred between the spouses," transferred income does not include a de minimis amount of earned income that is transferred between the spouses. In addition, any amount of earned income transferred for the benefit of the spouses’ child will not be treated as an indirect transfer to one spouse. Additionally, income transferred between spouses is presumed to be a transfer of earned income. This presumption is rebuttable.

The IRS can deny the federal income tax benefits of community property law to any spouse with respect to any income if such taxpayer acted as if solely entitled to such income and failed to notify his or her spouse of the nature and amount of the income before the due date (including extensions) for filing his or her spouse’s return for the tax year in which the income was derived. See IRC 66(b).

Whether a spouse has acted as if solely entitled to the item of income is a "facts and circumstances" determination. This determination focuses on whether the spouse used, or made available, the item of income for the benefit of the marital community. For examples that illustrate these rules, see 26 CFR 1.66-3(c).

Effect of Relief - If the Service denies a spouse the federal income tax benefits from community property law for an item of income, it will be included, in its entirety, in the gross income of the spouse to whom the IRS denied such benefits. The tax liability arising from the inclusion of the item of community income are subject to the deficiency procedures under IRC 6212 against this spouse.

IRC 66(c) authorizes the IRS, per procedures in 26 CFR 1.66-4, to relieve a spouse from an income tax liability resulting from the operation of community property law if all of the following apply:

26 CFR 1.66-4, Request for Relief from the Federal Income Tax Liability Resulting from the Operation of Community Property Law, provides guidance on the following two types of relief:

For the "time and manner for requesting relief," see IRM 8.7.12.7.3.3.

The NRS must receive notice of, and an opportunity to participate in, any proceeding with respect to an innocent spouse request for relief. See IRM 8.7.12.6, Notice and Participation of NRS.

If relief is granted, the item of community income is included in the gross income of the NRS and not the gross income of the RS.

Tacit consent means that the joint return is valid even though the RS may not have signed it because the consent is implied by or inferred from the RS's actions or statements.

Here are some questions to consider when determining whether tacit consent applies:

If the RS alleges forgery, he/she should have provided a statement addressing the forgery issue.

Review the case for tacit consent.

The burden of proof is on the taxpayer to prove forgery and no intent to file a joint return.

For additional information, see IRM 25.15.1.2.4, Forged Signatures.

If the taxpayer raises the issue of relief from joint and several Liability during an appeal of a non-docketed proposed deficiency case, secure a completed Form 8857, Request for Innocent Spouse Relief, or a similar statement containing the same information, signed under penalties of perjury.

Generally, for a non-docketed proposed deficiency case, the case is returned to the originating Compliance function for consideration of the relief from joint and several liability issue. Jurisdiction is released for Compliance’s consideration, with appeal rights.

If unusual circumstances exist (e.g., short statute), Appeals and Compliance will decide the best way to handle the request on a case-by-case basis.

When Automated Underreporter Unit (AUR) and CCISO are simultaneously considering issues on the same taxpayer(s), regarding both a proposed deficiency (AUR) and a request for Innocent Spouse relief (CCISO), coordination between the functions is necessary. AUR is responsible for the deficiency issues, but not innocent spouse relief. AUR coordination with Appeals becomes necessary if the taxpayer(s) appeals either the AUR or CCISO determination, or both. An appeal (protest) of the innocent spouse preliminary determination can be made before or after AUR issues a notice of deficiency. Therefore, Appeals can receive the case in either pre-assessment or post-assessment status.

When AUR receives a Form 8857 or similar written statement, AUR notifies CCISO. AUR's procedures for issuing a notice of deficiency vary depending on whether CCISO has made a preliminary determination at the time AUR is ready to issue the notice of deficiency. For additional information, see IRM 25.15.7.3, Campus Compliance Examination Operation/Automated Underreporter (CCEO/AUR) Overview, and IRM 4.19.3.22.1.20, Innocent Spouse Relief Cases.

The RS may petition the Tax Court to determine the appropriate relief available if such petition is filed:

A taxpayer can petition the Tax Court for relief under IRC 6015 in response to:

Before assessing an additional income tax, the IRS must send the taxpayer (by certified or registered mail) notice of the deficiency to the taxpayer’s last known address. See IRM 8.7.12.11, Notice of Deficiency with IRC 6015 Relief Determination. A notice of deficiency is not required if the taxpayer signs a form waiving the right to petition the United States Tax Court for a redetermination of the tax and the restrictions on assessment and collection of the deficiency. See IRC 6213(d), Waiver of Restrictions.

When both spouses agree to the joint liability, the assessment will be requested on the joint MFT 30 account. When relief is requested under IRC 6015 and the agreed liability is determined to be an individual liability, assessment on MFT 31 will be required. This includes cases where one spouse agrees to a liability and one does not.

In an agreed case where relief is granted in full for the entire deficiency, a signed agreement is not required from the RS. Only the NRS must sign the agreement.

Partial agreement does not mean partial relief.

In an agreed case where relief is partially or fully denied, a signed waiver agreement is required from both spouses.

This section contains guidance for preparing closing documents for protested pre-assessment liabilities that include innocent spouse relief determinations. This includes the following:

This section contains guidance for preparing closing documents for docketed pre-assessment liabilities that include innocent spouse relief determinations. This includes the following:

Determine whether one or both spouses petitioned the Tax Court. If only the RS petitioned and the IRC 6015 relief determination is before the Tax Court, determine if the NRS filed a notice of intervention for the IRC 6015 relief determination. See IRM 8.7.12.9.3.2, NRS Notice and Intervention.

Appeals must review source documents, such as the petition and any court orders in the file, regarding the caption. In addition, Appeals must access www.ustaxcourt.gov to ensure the proper caption is used on the decision document. For assistance with preparing the Decision Document, see IRM 8.4.1.11.2, Stipulation/Decision Preparation.

For post-assessment IRC 6015 relief determinations, prepare the following:

For information includible on Form 5402, see IRM 8.7.12.10.3.1, Customized Form 5402, Appeals Transmittal and Case Memo.

The RS can petition the Tax Court for a relief determination after 6 months of filing the request. See IRM 8.7.12.9.3, Docketed Innocent Spouse Cases. If the RS petitioned the Tax Court prior to the Service’s final determination for the innocent spouse relief request under IRC 6015, alert the Area Counsel attorney of the status of the innocent spouse case.

Appeals uses Letter 3288, Final Appeals Determination to Requesting Spouse, to notify the RS of the IRS’s final determination of the RS’s request under IRC 6015. This letter also explains how the RS can petition the Tax Court if the RS disagrees with the IRS’s decision. Similar to a notice of deficiency, the time for petitioning the Tax Court must be no later than 90 days from the date of the final determination letter. The ATM and ATCL are the authorized signers of Letter 3288, Final Appeals Determination to Requesting Spouse, and Letter 3289, Final Appeals Notice to Non-Requesting Spouse.

For an agreed closure of a docketed post-assessment IRC 6015 relief determination, secure the petitioner’s signature (and signature of intervenor, if applicable) on a Decision Document instead of mailing Letter 3288. Appeals must review source documents, such as the petition and any orders in the file, regarding the caption. In addition, Appeals must access www.ustaxcourt.gov to ensure the proper caption is used on the decision document. For assistance with preparing the Decision Document, see IRM 8.4.1.11.2, Stipulation/Decision Preparation.

In cases where Appeals issued the notice of deficiency for a joint return and during the 90-day or 150-day period Appeals receives from one of the spouses a Form 8857, Request for Innocent Spouse Relief, APS will pull the case from suspense and return it to the assigned ATE. The ATE will:

The ATE will take the actions listed above as soon as possible, document these actions in the Case Activity Record, and promptly return the administrative file to APS. APS will monitor the case while it is in the hands of the ATE. See IRM 8.20.6.26.7, Form 8857 Filed During the 90-Day or 150-Day Period.

If no petition is filed by either spouse in response to the notice of deficiency, APS will:

If a petition is filed in response to the notice of deficiency, APS will:

IRC 66(c) provides for relief from an income tax liability resulting from the operation of community property law to taxpayers domiciled in a community property state. For items eligible for relief, see IRM 8.7.12.7.1 (2).The traditional method of IRC 66(c) relief is available only for deficiencies resulting from the RS’s omission or under-reporting of an item of community income. The latest time for requesting traditional relief is six months before the NRS’s ASED expires. If the RS doesn’t qualify for traditional relief, the RS may be eligible under the equitable method. Equitable relief is available for a deficiency or unpaid tax resulting from an item of community income. The latest time for requesting equitable relief from an outstanding liability is before the CSED expires. For a refund, the latest time for requesting relief is before the expiration of the Refund Statute Expiration Date (RSED).

To the extent relief is granted, it removes or prevents the assessment of tax against the RS. It does not affect the IRS’s ability to pursue collection remedies against the non-liable spouse’s interest in community property or override the IRS’s ability to offset payments made from community property under state law. See IRM 25.15.5.7, Effect of Innocent Spouse Relief.

If the RS qualifies for relief from liability under either the traditional or equitable method, the RS’s liability for community property items is decreased. As a result, the IRS must assess any deficiency of the NRS arising out of the grant of relief to the RS. If Appeals has jurisdiction over the NRS’s separate pre-assessment liability case, along with the RS’s IRC 66(c) relief request for the same tax year, increase the NRS’s gross income as a result of the determination to grant the RS relief. See IRM 8.2.3.13, Whipsaw Cases, and IRM 4.10.7.4.9, Whipsaw (a/k/a correlative adjustments).

For an IRC 66(c) determination under Collection Due Process, follow the procedures in IRM 8.7.12.13, CDP/EH and Innocent Spouse Cases.

When a determination is made to fully grant the RS relief under IRC 6015 and the NRS was notified and given an opportunity to appeal this determination, do not issue Letter 894, Notice of Deficiency, to the RS. See IRM 8.7.12.10.1.2.1, IRC 6015 Relief Fully Allowed (Pre-Assessed, Unagreed Non-Docketed), for the appropriate closing letters.

If the NRS has not had a chance to appeal the full grant of relief (for example if the ASED is about to expire and one or both of the spouses will not extend the statue), then follow the procedures in IRM 8.7.12.11.5, Short Statute Procedures. The ATE will instruct the TCS to follow the short statute procedures.

Address Letter 894, Notice of Deficiency, to both spouses as shown on the tax return, but send the notice only to the NRS. See details below for preparing Letter 894:

Include the name, address, and TIN of the NRS only on the following:

On Form 5278, Statement-Income Tax Changes, include the names of both spouses and the primary TIN because the tax computation starts with the joint return information.

Include the names of both spouses on the explanation of adjustments, computational schedules, and exhibits attached to Letter 894.

See the following example for preparing Letter 894 and enclosures:

Include the following paragraph on the notice of deficiency letter, waiver (Form 4089 or Form 870), and at the bottom of Form 5278 (Instead of including the paragraph on the waiver and on Form 5278, it may be shown instead on separate schedules attached to the waiver and to Form 5278).

When a determination is made to partially disallow the RS relief under IRC 6015 and both spouses had the opportunity to participate in the administrative proceedings, include the full tax deficiency amounts in the notice of deficiency to the NRS and the RS. See IRM 8.7.12.10.1.2.2, IRC 6015 Relief Partially Disallowed (Pre-Assessed, Unagreed Non-Docketed), for the appropriate closing letters.

If the spouses have not had a chance to appeal the partial grant of relief (for example if the ASED is about to expire and one or both of the spouses will not extend the statue), then follow the procedures in IRM 8.7.12.11.5, Short Statute Procedures. The ATE will instruct the TCS to follow the short statute procedures.

When a deficiency remains attributable to both spouses, but each is liable for a different amount, show (as usual) the total deficiency on Letter 894 and Form 4089 (or Form 4089-A and Form 870). Include the following paragraph on the notice of deficiency letter, waiver (Form 4089 or Form 870), and at the bottom of Form 5278 (Instead of including the paragraph on the waiver and on Form 5278, it may be shown instead on separate schedules attached to the waiver and to Form 5278).

Prepare Form 5278 and include all adjustments made to the return.

Prepare Letter 3288, Final Appeals Determination to Requesting Spouse, by including the standard explanatory paragraph(s) and adding the write-in paragraph shown below:

Innocent spouse allocation worksheets are not required with the statutory notice of deficiency. Instead, when needed, they are included with the Letter 3288 and Letter 3289. If the ATE wants the TCS to prepare allocation worksheets, the ATE must specify this on a work request to the TCS. Otherwise, the TCS will not need to prepare an allocation worksheet when preparing the notice of deficiency. Innocent Spouse allocation spreadsheets are available on the Appeals Tax Computation Specialist (TCS) site.

When a determination is made to fully disallow the RS relief under IRC 6015 (i.e., both spouses are liable for the entire deficiency) and both spouses had the opportunity to participate in the administrative proceedings, include the full deficiency amount(s) in the notice of deficiency to the NRS and the RS. See IRM 8.7.12.10.1.2.3, IRC 6015 Relief Fully Disallowed (Pre-Assessed, Unagreed Non-Docketed), for the appropriate closing letters.

If the RS has not had the chance to appeal the denial of relief (for example if the ASED is about to expire and one or both of the spouses will not extend the statue), then follow the procedures in IRM 8.7.12.11.5, Short Statute Procedures. The ATE will instruct the TCS to follow the short statute procedures.

Show the total deficiency amounts on the joint notice of deficiency letter and Form 4089 (or Form 4089-A and Form 870). Include the following paragraph on the notice of deficiency letter, waiver (Form 4089 or Form 870), and at the bottom of Form 5278 (Instead of including the paragraph on the waiver and on Form 5278, it may be shown instead on separate schedules attached to the waiver and to Form 5278).

Prepare Letter 3288, Final Appeals Determination to Requesting Spouse, by including the standard explanatory paragraph(s) and adding the write-in paragraph shown below:

When a determination is made to fully disallow relief under IRC 6015 and both spouses had the opportunity to participate in the administrative proceedings, include the full amount of the deficiency amounts in the notice of deficiency to the NRS and RS.

If the spouses have not had a chance to appeal the relief determination (for example if the ASED is about to expire and one or both of the spouses will not extend the statue), then follow the procedures in IRM 8.7.12.11.5, Short Statute Procedures. The ATE will instruct the TCS to follow the short statute procedures.

Prepare and issue the notices of deficiency as described above in IRM 8.7.12.11.1, Notice of Deficiency - IRC 6015 Relief Fully Allowed, IRM 8.7.12.11.2, Notice of Deficiency - IRC 6015 Relief Partially Disallowed, or IRM 8.7.12.11.3, Notice of Deficiency - IRC 6015 Relief Fully Disallowed. However, instead of the statements described in these sections, include the paragraph shown in paragraph (4) below.

Where both spouses filed for relief under IRC 6015 and relief is fully disallowed, include the following paragraph on the notice of deficiency letter, waiver (Form 4089 or Form 870), and at the bottom of Form 5278 (Instead of including the paragraph on the waiver and on Form 5278, it may be shown instead on separate schedules attached to the waiver and to Form 5278.)

For each spouse, prepare Letter 3288, Final Appeals Determination to Requesting Spouse, by including the standard explanatory paragraph(s) and adding the write-in paragraph shown below:

It is not necessary to send Letter 3289, Final Appeals Notice to Non-Requesting Spouse, to each spouse to notify them of the decision regarding the request of their spouse or former spouse. Include an explanation of the decision regarding the request of their spouse or former spouse in Letter 3288, Final Appeals Determination to Requesting Spouse.

For instructions on the mailing requirements, see IRM 8.20.6.26.5, Both Spouses Request Relief.

If the ASED is about to expire before consideration of the innocent spouse issue can be completed and one or both spouses will not extend the ASED, include the full deficiency amount(s) in the notice of deficiency to the NRS and the RS.

Include the following paragraph on the notice of deficiency, waiver (Form 4089 or Form 870), and at the bottom of Form 5278 (Instead of including the paragraph on the waiver and on Form 5278, it may be shown instead on separate schedules attached to the waiver and to Form 5278.)

The ATE will request a new WUNO for the innocent spouse case and retain copies of all pertinent documents from the notice of deficiency (income) file. Cross reference the income WUNO and add a cross-reference on the income case to the innocent spouse WUNO. The ATE will continue consideration of the innocent spouse issue while the notice of deficiency is pending. The ATE will coordinate with Counsel if the RS petitions Tax Court.

APS is responsible for maintaining the notice of deficiency case and monitoring it during the suspense period to determine if, in response to the notice of deficiency, a petition to the U.S. Tax Court was filed.

IRC 6663(c) provides that in the case of a joint return, the imposition of the fraud penalty shall not apply to a spouse, unless some part of the underpayment is due to the fraud of such spouse.

Where the fraud penalty is assessed against a spouse without appropriate development and explanation, that spouse should be relieved of such assessment pursuant to IRC 6663(a), not IRC 6015. IRC 6015 does not provide for relief from penalties and interest separate from tax.

For a joint CDP/EH hearing request, the hearing can proceed for the NRS. However, the final CDP/EH determination can not be made until the final innocent spouse relief determination has been made. The collection potential from the RS could affect the viability of a proposed collection alternative. The SO will suspend the CDP/EH case until the innocent spouse relief determination has been made. If CCISO makes a final determination to fully grant relief and the accounts can be mirrored, CCISO will mirror the accounts prior to sending the innocent spouse case back to Appeals. See IRM 8.7.12.15.2, Mirrored Accounts. Mirroring allows collection activity to continue for the NRS, if not otherwise suspended for a timely CDP hearing.

CCISO should not issue an innocent spouse final determination letter on combo cases. See IRM 25.15.7.4.3, Request for Collection Due Process (CDP) or Equivalent Hearing (Form 12153). If CCISO has inadvertently issued a final determination letter, the SO will contact CCISO to get the administrative file or at least a copy of the innocent spouse case work papers and determination letter. The CDP WUNO will be suspended, until after the expiration of the period for the RS to petition the Tax Court to review the innocent spouse relief determination.

Follow normal procedures for considering an innocent spouse request, allowing both spouses the opportunity to participate in the proceedings. See IRM 8.7.12.9, Appeals Consideration.

After deciding whether to grant relief, the AO will:

The SO will follow procedures in IRM 8.22.9.4.2, Closing a CDP with Innocent Spouse, for closing the CDP/EH and innocent spouse case WUNOs. APS will then follow the interim action procedures in IRM 8.20.6.26.1, Innocent Spouse Notice of Determination Procedures, or closing actions in IRM 8.20.7.40, Innocent Spouse Case Closing Overview, and their related subsections.

A CDP request can be withdrawn up to the point the determination letter is issued. If the taxpayer(s) withdraws the CDP request, the SO will determine the status of the innocent spouse case.

MFT 31 and MFT 65 are used to identify assessments against an individual taxpayer on a joint module and are generated by one or more of the following:

The types of MFT 31 modules are as follows:

The "triggering event," identified on IDRS with a TC 971 action code, determines when the module is moved from MFT 30, or MFT 35, and the type of module established. The "module type" identifies if the credits posted to the module are "systemically mirrored" or "manually mirrored." See the table below for a list of triggering events:

From cycle 4 of 2005 until January 13, 2016, CCISO mirrored joint accounts for every request for innocent spouse relief received for the joint tax years indicated, with exceptions for modules with account problems that prevented mirroring. Beginning January 13, 2016, CCISO no longer mirrors all accounts upon receiving a request for innocent spouse relief. Mirroring only occurs upon a determination of full relief. See IRM 25.15.15, Mirror Modules for Requests for Relief from Joint and Several Liability.

When requested, CCISO will mirror an account that was not mirrored prior to CCISO sending the case to Appeals. The request can only be made after Appeals has made a final determination to fully allow the claim for relief, but only if the claim was previously denied in full by CCISO. If the account can be mirrored, the ATE will initiate such requests as soon as practicable. See Exhibit 25.15.18-2, Accounts That Cannot Be Mirrored.

For Innocent Spouse and Collection Due Process/Equivalent Hearing "combo" cases, the ATE working the innocent spouse claim will make the mirroring request.

The ATE will submit mirroring requests to CCISO through the Appeals Support Work Request site, accessible from Appeals’ Innocent Spouse Program page, by clicking on "New Request" and completing the "Appeals Support Work request" form as shown below:

The ATE’s submission of the mirroring request form will generate an email to a centralized CCISO inbox at *SBSE CCISO APPLS REQ and a copy of the email to the requesting ATE. Upon receipt of the mirroring request, CCISO will:

The ATE will send the case to APS for closing using current procedures. The ATE does not need to wait for CCISO to mirror the account prior to sending the case to APS. On Form 5402, Appeals Transmittal Case Memo, the ATE will include a note to APS indicating that the ATE has requested that CCISO mirror the account. APS will be responsible for ensuring the mirrored accounts have been established by CCISO prior to closing the Appeals case. See IRM 8.20.7.40.4, Innocent Spouse Preliminary Closing Procedures.

Determine if there is a CI freeze on the account. If yes, is the account mirrored? If not, is there documentation in the file to indicate CI agrees to allow the account to be mirrored at processing? If yes, consider the case. If not, return the case to CCISO or the source function if the case did not originate in CCISO, as a premature referral. See IRM 8.20.7.40.4, Innocent Spouse Preliminary Closing Procedures.

Exam/Appeals/AUR MFT 31 modules are created when only one spouse petitions Tax Court in response to a notice of deficiency or only one spouse agrees to the proposed deficiency.

The modules are systemically established but not mirrored.

Exam/Appeals/AUR MFT 31 accounts are established using similar procedures as for mirrored accounts, except the account is not mirrored because only one TC 971 AC 102 or 103 is input. The non-petitioning spouse's TIN is input as the TC 971 cross-reference TIN.

APS will follow the normal card-in procedures for innocent spouse cases, as identified in IRM 8.7.12.3.1 (4). In addition to normal carding procedures, APS will input on ACDS the following:

For a reconsideration, the ATE will:

For specific instructions based on the reconsideration decision, see the following:

APS will follow normal closing procedures in IRM 8.20.7.40.19, Innocent Spouse Reconsideration Closing procedures.