Recently issued proposed rules addressing requests for equitable spousal relief under §6015 (see REG-132251-11, 78 Fed. Reg. 49242 (8/13/13)), would make permanent a 2011 taxpayer-friendly IRS policy decision to significantly expand the timeframe for seeking equitable relief under §6015(f) from two years to 10 years. The same timing rules also would apply for claims for relief under §66(c).

 Although prevailing in several appellate decisions that upheld its authority to require that claims for equitable relief under §6015(f) be filed within a two-year deadline consistent with deadlines under §6015(b) and (c), the IRS, in Notice 2011-70, 2011-32 I.R.B. 135, announced a policy to instead allow taxpayers to file a claim for equitable relief under §6015(f) so long as the request was filed within the §6502 period of limitations for collection, i.e, within 10 years. (Taxpayers seeking a refund had to file a claim for credit or refund of tax within the applicable period of limitations in §6511, generally three years from the time a return was filed).

Notice 2011-70 provided special transitional rules that still apply until the proposed rules are finalized. Thus, taxpayers who may have filed requests for relief under §6015(f) before July 25, 2011 that were denied as untimely under the old two-year rule and who never appealed the decision to a court, should re-apply for relief by filing a new Form 8857, Request for Innocent Spouse Relief. Based on Notice 2011-70, the IRS should treat the original Form 8857 as a claim for refund for purposes of the refund limitations period described above, meaning that any amount for which a refund was available when the original Form 8857 was filed (and any amounts later collected by the IRS) should be refunded if relief is granted.