Innocent Spouse Overpayment Relief Gets Revived on Appeal (1)

A widow may claim innocent spouse relief from the IRS because an erroneous refund of underpayment interest can qualify as an “unpaid tax” eligible for equitable relief, the Fourth Circuit said Monday, vacating a US Tax Court opinion.

Catherine LaRosa may seek relief under IRC Section 6015(f)—which allows the IRS to relieve taxpayers from joint liabilities when it would be inequitable to hold them responsible—because it makes any unpaid tax or deficiency eligible for relief, the US Court of Appeals for the Fourth Circuit said.

Writing for a unanimous panel, Judge Toby Heytens said the statutory text favors ...