Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 300 - Administration › Rule 701-300.15 - 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 300.15(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).