Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 38 - Administration › Rule 701-38.15 - Relief From Joint and Several Liability Under Iowa Code Section 422.21 (7) for Substantial Understatement of Tax Attributable to Nonrequesting Spouse or Former Spouse

Current through Register Vol. 47, No. 3, July 24, 2024
Married or formerly married taxpayers are generally jointly
				  and severally liable for the total tax, penalty, and interest from a joint
				  return or from a return where the spouses file separately on the combined
				  return. However, pursuant to Iowa Code section
				  422.21(7),
				  a person who is eligible for relief under the criteria established in Section
				  6015 of the Internal Revenue Code may be relieved of liability for an
				  understatement of Iowa tax that is attributable to erroneous items of the
				  nonrequesting spouse or former spouse. For state income tax purposes, the
				  requirements set forth in this rule shall control to the extent that they
				  conflict with Section 6015 of the Internal Revenue Code.
(1)
Filing status required for relief
				from joint and several liability.
For state income tax purposes, a
				married or formerly married taxpayer may qualify for relief from joint and
				several liability under Iowa Code section
				422.21(7)
				 only if the taxpayer filed a joint return or
				filed separately on a combined return.
(2)
Scope of relief for Iowa income
				tax purposes.
An understatement of the tax is the excess of the tax
				required to be shown over the tax actually shown on the return. An erroneous
				item is any item resulting in an understatement or deficiency in Iowa taxes to
				the extent that the item is omitted from, or improperly reported or
				characterized on, an Iowa tax return, including Iowa deductions and tax credits
				that would not be included on a federal return.
(3)
Requirement to provide IRS
				determination or other evidence of eligibility.
a. If the person seeking relief from joint
				and several liability under Iowa Code section
				422.21(7)
				 also applied for tax relief from the federal
				government under Section 6015 of the Internal Revenue Code and received a final
				determination letter or other document issued by the Internal Revenue Service
				in connection with relief requested under Section 6015 of the Internal Revenue
				Code, the person is required to provide the department with a copy of such
				letter or document within the time frame set forth in subrule 38.15(6). Failure
				to provide this required information, if it exists, will result in the denial
				of the request for relief from joint and several liability under Iowa Code
				section
				422.21(7).
b. If the person seeking relief from joint
				and several liability under Iowa Code section
				422.21(7)
				 also applied for federal relief under
				Section 6015 of the Internal Revenue Code but did not receive a final
				determination letter or other document issued by the Internal Revenue Service
				in connection with the requested relief, the person must provide the department
				with other evidence to support the position that the taxpayer is eligible for
				relief under Iowa Code section
				422.21(7).
c. If the person seeking relief under Iowa
				Code section
				422.21(7)
				 did not apply for federal relief under
				Section 6015 of the Internal Revenue Code, the person must submit a written
				statement to the department detailing the reason for not applying for relief
				under Section 6015 of the Internal Revenue Code as well as evidence to support
				the position that the taxpayer is eligible for relief under Iowa Code section
				422.21(7).