Judge Albert G. (“Scholar Al”) Lauber authors a full-dress T. C. to break the captioned bad news to Angela M. Chavis, 158 T. C. 8, filed 6/15/22. Angela and spouse were secretary and president, respectively, of Oasys, a C Corp operating out of the family dwelling. Oasys had employees, and collected FICA/FUTA/ITW from same.

Only Angela and now-ex-spouse didn’t bother to remit to the Federales. Angela never responded to the Letter 1153 with a Forn 12153 or anything else.  So IRS assessed and gave Angela a NFTL at no extra charge.

Angela now says she’s divorced and broke, and an innocent spouse. Except Appeals says she can pay.

The ability to pay issue is fact-based, so I’ll leave it, but Section 6015 says explicitly that innocent spousery thereunder is only for spouses filing income tax returns MFJ.

“During the CDP hearing petitioner urged that she was entitled to ‘innocent spouse’ relief under section 6015. The SO advised petitioner that she was not eligible for such relief because her TFRP liabilities arose from Oasys’s unpaid payroll taxes, not from a joint Federal income tax return. The SO made this determination after reviewing petitioner’s Form 8857 and the correspondence from CCISO.

“Section 6015 is captioned ‘Relief from joint and several liability on joint return.’ Section 6015(a)(1) provides that ‘an individual who has made a joint return may elect to seek relief under the procedures prescribed under subsection (b),’ which sets forth procedures ‘applicable to all joint filers.’ Section 6015(a)(2) provides that an individual may ‘elect to limit [her] liability for any deficiency with respect to such joint return in the manner prescribed under subsection (c),’ which sets forth procedures applicable for spouses who are legally separated or no longer living together.

“Subsections (b) and (c) both specify rules for obtaining relief from liabilities that are shown on (or should have been shown on) a joint Federal income tax return. See § 6015(b)(1)(A) and (B) (presupposing that ‘a joint return has been made’ and that ‘on such return there is an understatement of tax’); § 6015(c)(1) (providing that a person ‘who has made a joint return’ may be partially relieved of “liability for any deficiency which is assessed with respect to the return’).” 158 T. C. 8, at p. 8. (Footnote omitted, but I’m coming to that.)

The footnote says that Angela can raise spousal defenses  in an innocent spousery CDP even if she never contested liability, but Judge Scholar Al says that doesn’t help, because there was no joint income tax return.

Summary J for IRS.