Exception for Equitable Relief
On July 25, 2011, the IRS issued Notice 2011-70 expanding the amount of time to request equitable relief. The amount of time to request equitable relief depends on whether you are seeking relief from a balance due, seeking a credit or refund, or both:
- Balance Due – Generally, you must file your request within the time period the IRS has
to collect the tax. Generally, the IRS has 10 years from the date the tax liability was
assessed to collect the tax. In certain cases, the 10-year period is suspended.
- Credit or Refund – Generally, you must file your request within 3 years after the date
the original return was filed or within 2 years after the date the tax was paid, whichever
is later. But you may have more time to file if you live in a federally declared disaster
area or you are physically or mentally unable to manage your financial affairs. See
Pub. 556, for details.
- Both a Balance Due and a Credit or Refund – If you are seeking a refund of amounts
you paid and relief from a balance due over and above what you have paid, the time
period for credit or refund will apply to any payments you have made, and the time
period for collection of a balance due amount will apply to any unpaid liability.
Exception for relief based on community property laws.
If you are requesting relief based on community property laws, you must file Form 8857 no later than 6 months before the expiration of the period of limitations on assessment (including extensions) against your spouse or former spouse for the tax year for which you are requesting relief. However, if the IRS begins an examination of your return during the 6-month period the latest time for requesting relief is 30 days after the date of the IRS’ initial contact letter to you. The period of limitations on assessment is the amount of time, generally 3 years, that the IRS has from the date you filed the return to assess taxes that you owe. If you do not qualify for the relief described above and are now liable for an unpaid or understated tax you believe you should be paid only by your spouse or former spouse, you may request equitable relief. See the Exception for equitable relief above.
