PASSED THE SENATE: Hassan, Scott Bill to Protect Innocent Spouses from Unfair Tax Liability Passes Senate

WASHINGTON – Bipartisan legislation led by U.S. Senators Maggie Hassan (D-NH) and Tim Scott (R-SC) to help ensure that taxpayers are not unfairly held responsible for tax debts caused by a spouse’s hidden income, mistakes, or misconduct unanimously passed the Senate. The Tax Relief for Innocent Spouses Act , which was included as part of the Taxpayer Assistance and Service (TAS) Act , now heads to the House for consideration. “When married couples file taxes jointly, one spouse can sometimes be left facing serious financial consequences because of mistakes that they had no knowledge of or control over,” said Senator Hassan. “This bipartisan bill helps ensure that innocent spouses, including those who may have experienced abuse or lacked access to their finances, will have a fair opportunity to present their case and receive the relief that they deserve. I’m glad to see it pass the Senate, and I’ll keep working across the aisle to get it passed into law.” “One spouse should not bear the responsibility for another spouse’s hidden income or mistakes, and the Tax Relief for Innocent Spouses Act gives the Tax Court greater authority to review the full scope of evidence in appeal cases,” said Senator Tim Scott. “For spouses who face domestic abuse or who lack access to financial information, this legislation would be life changing. By ensuring innocent Americans are treated fairly under our tax laws, we could provide much-needed relief and opportunities to move forward.” When married couples file taxes jointly, both spouses are liable for any misstatement of income or underpayment, even if one spouse had no knowledge of the violation. This can be a particularly common issue in abusive relationships when one spouse takes control of the finances or hides additional income. The “innocent spouse” who is unaware of the tax violations may qualify for tax relief and be protected from liability for tax violations they did not know about. Under current law, courts reviewing innocent spouse claims can only consider evidence that was newly discovered, not evidence that was previously submitted during the IRS administrative review process. This can make it harder for innocent spouses to obtain relief, particularly if they experienced abuse, lacked access to financial information, or did not understand the process. The Tax Relief for Innocent Spouses Act would allow courts to consider all relevant evidence when reviewing innocent spouse claims, helping give taxpayers a fair opportunity to receive relief from tax liabilities they did not cause. ###