The Treasury Inspector General for Tax Administration (TIGFTA) reported on July 19, 2012 on its Review of Disclosure of Collection Activity with Respect to Joint Returns. Surprisingly, an IRS study concluded that there is a low volume of requests under Section 6103(e) (8). One would think the high volume of Innocent Spouse cases litigated would generate many such requests. In any event, the TIGFTA report concludes that IRS has implemented adequate guidelines for its employees to comply with the law.
What is the law? Internal Revenue Code (I.R.C.) Section (§) 6103(e)(8) gives joint filer taxpayers who are no longer married or no longer reside in the same household the right to request information regarding the IRS’s efforts to collect delinquent taxes on their joint tax return liabilities.
Section 6103(e) (8) was included in the “Taxpayer Bill of Rights 2,” (Pub. L. No. 104-168, 110 Stat. 1452 (1996), codified, as amended, in scattered sections of 26 U.S.C). The subsection relates to joint filers and was enacted out of congressional concern about the treatment of separated or divorced taxpayers. When introducing the Bill, Representative Nancy L. Johnson (R-Connecticut) stated:
The subcommittee learned of many instances where divorced taxpayers who had previously signed a joint tax return during their marriage were treated harshly when the IRS later disputed the accuracy of their joint tax return. In many cases the IRS tried to collect the entire amount of taxes from the wife, even though the omitted income or erroneous deductions which caused the deficiency were attributable solely to her former husband. All too often, the woman, being pursued for payment of taxes due, was not aware that a tax return filed during the marriage had been audited or that a deficiency had been imposed on the return.
Section 6103(e) (8) provides:
(8) Disclosure of collection activities with respect to joint return
If any deficiency of tax with respect to a joint return is assessed and the individuals filing such return are no longer married or no longer reside in the same household, upon request in writing by either of such individuals, the Secretary shall disclose in writing to the individual making the request whether the Secretary has attempted to collect such deficiency from such other individual, the general nature of such collection activities, and the amount collected. The preceding sentence shall not apply to any deficiency which may not be collected by reason of section 6502 (ten-year collection statute of limitations).
Thus, this provision is addressing IRS activity with respect to taxes that are due with regard to a specific tax year and joint return deficiency.
To address congressional concern, and the new Code provision, the IRS revised its Internal Revenue Manual (IRM 220.127.116.11.1 (Aug. 29, 2008), to include procedures for responding to taxpayers who file jointly and submit written requests for information on IRS collection activity. The IRM instructs employees to disclose:
- Whether any attempts have been made to collect the tax due from either of the joint filers
- The current collection status, and, if the collection case has been suspended the reason for the suspension (e.g., unable to locate, hardship, etc.)
- The amount collected to date.
IRS will not disclose:
- The other spouse’s location or telephone number
- Any information about the other spouse’s employment, income, or assets, or
- The income level at which a currently not collectible account will be reactivated.
The IRM guidance also allows employees to provide both oral and written responses to taxpayers. Note that IRS procedures require employees to respond in writing only when taxpayers specifically cite I.R.C. § 6103(e) (8) as their authority for making written requests for collection information on joint return liabilities. If the taxpayer’s written request does not specifically cite I.R.C. § 6103(e)(8), the IRS has directed employees to provide oral responses when practicable based upon I.R.C. § 6103(e)(7)(authorizing disclosure of return information to any person, including a spouse, authorized to inspect the return of a taxpayer if such disclosure would not seriously impair Federal tax administration).
Return information would include such information in a joint return and is defined in 6103(a) (2) to include:
- The taxpayer’s identity
- Nature, source and amount of income, payments, receipts, deductions, and exemptions.
- Assets, liabilities and net worth
- Tax liability
- Tax withheld or other tax payments
- Deficiencies or over-assessments.
Information documents, however, posted by IRS to an individual’s information, Return Master Filed account are viewed by IRS as individual, not joint, information returns. W-2s or other information forms filed with the joint return, however, will be disclosed to the joint filing spouses (See IRM 18.104.22.168.1.2.A)
As stated above, divorced spouses can each obtain a copy of the joint return itself which under Section 6103(b) (1), includes:
- The joint Form 1040 signed by them even if under duress
- Any information return for that individual or included with the joint return
- Joint estimated tax declarations.
- Claims for refund
- Amended returns
- Supporting schedules, attachments or lists which are part of the return.
See IRM 22.214.171.124.1.2.
Requests for returns and return information may be made on Form 4506, Form 4506T, or, under the Freedom of Information Act. How to request information will depend on the circumstances of the particular matter for which the request is deemed necessary, the likelihood of denial and need for appeal rights, the timing of the request, and the urgency of the need for the documents sought.
Requests for written collection activity information under Section 6103 (e) (8) must be made in a writing signed by the requesting taxpayer or authorized representative acting under authority of a Form 2848, Power of Attorney.
© 2012 by Robert S. Steinberg, Esquire
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