[Congressional Record (Bound Edition), Volume 152 (2006), Part 17]
[House]
[Pages 22288-22289]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     INNOCENT SPOUSE PROTECTION ACT

  Mr. RAMSTAD. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 6111) to amend the Internal Revenue Code of 1986 to provide 
that the Tax Court may review claims for equitable innocent spouse 
relief and to suspend the running on the period of limitations while 
such claims are pending, as amended.
  The Clerk read as follows

                               H.R. 6111

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. TAX COURT REVIEW OF REQUESTS FOR EQUITABLE RELIEF 
                   FROM JOINT AND SEVERAL LIABILITY.

       (a) In General.--Paragraph (1) of section 6015(e) of the 
     Internal Revenue Code of 1986 (relating to petition for tax 
     court review) is amended by inserting ``, or in the case of 
     an individual who requests equitable relief under subsection 
     (f)'' after ``who elects to have subsection (b) or (c) 
     apply''.
       (b) Conforming Amendments.--
       (1) Section 6015(e)(1)(A)(i)(II) of such Code is amended by 
     inserting ``or request is made'' after ``election is filed''.
       (2) Section 6015(e)(1)(B)(i) of such Code is amended--
       (A) by inserting ``or requesting equitable relief under 
     subsection (f)'' after ``making an election under subsection 
     (b) or (c)'', and
       (B) by inserting ``or request'' after ``to which such 
     election''.
       (3) Section 6015(e)(1)(B)(ii) of such Code is amended by 
     inserting ``or to which the request under subsection (f) 
     relates'' after ``to which the election under subsection (b) 
     or (c) relates''.
       (4) Section 6015(e)(4) of such Code is amended by inserting 
     ``or the request for equitable relief under subsection (f)'' 
     after ``the election under subsection (b) or (c)''.
       (5) Section 6015(e)(5) of such Code is amended by inserting 
     ``or who requests equitable relief under subsection (f)'' 
     after ``who elects the application of subsection (b) or 
     (c)''.
       (6) Section 6015(g)(2) of such Code is amended by inserting 
     ``or of any request for equitable relief under subsection 
     (f)'' after ``any election under subsection (b) or (c)''.
       (7) Section 6015(h)(2) of such Code is amended by inserting 
     ``or a request for equitable relief made under subsection 
     (f)'' after ``with respect to an election made under 
     subsection (b) or (c)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to liability for taxes arising or 
     remaining unpaid on or after the date of the enactment of 
     this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Minnesota (Mr. Ramstad) and the gentleman from New York (Mr. McNulty) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Minnesota.
  Mr. RAMSTAD. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of H.R. 6111, a bill to provide the U.S. Tax Court 
with jurisdiction to review innocent spouse relief claims. I urge my 
colleagues to join me in passing this legislation introduced by our 
distinguished colleague and friend from California, Representative 
Tauscher.
  Under current law, married couples who submit joint tax returns are 
individually responsible for paying the taxes owed to the Federal 
Government. The Internal Revenue Service can, however, relieve this 
responsibility, Mr. Speaker, in situations where one spouse was unaware 
that the other spouse understated the amount of taxes due on their 
joint return. This type of relief, called innocent spouse relief, is 
granted at the discretion of the IRS. Currently, if the IRS denies a 
claim for innocent spouse relief, the tax court which specializes in 
tax law, does not have jurisdiction to review the IRS decision. This 
bill would provide the tax court with authority to review these claims 
by innocent spouses.
  Mr. Speaker, we have the opportunity today to allow innocent spouses 
to take their cases to the Federal court with the most knowledge and 
expertise in handling tax matters. The tax court's experience with tax 
cases should ensure that denials of claims for innocent spouse relief 
are handled both fairly and expeditiously.
  Mr. Speaker, I commend my colleague and friend, Representative 
Tauscher, for her leadership and key work on this issue. The Senate has 
passed a similar provision, and I urge my colleagues to do the same by 
voting in favor of this important commonsense legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. McNULTY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 6111, legislation which 
enhances the innocent spouse equitable relief provision of the Internal 
Revenue Code. I believe that the enactment of this proposal will 
provide a straightforward and noncontroversial solution to the unfair 
treatment of innocent spouses under current law. Through only minor 
legislative modifications, this bill clarifies the statute's original 
intent, affording innocent spouses the necessary recourse to ensure 
their cases and circumstances are given a fair hearing.
  Mr. Speaker, at this time, I would like to yield such time as she may 
consume to the sponsor of this legislation, the gentlewoman from 
California (Mrs. Tauscher).
  Mrs. TAUSCHER. Mr. Speaker, please let me thank my colleague, Mr. 
McNulty, for his great leadership and my distinguished colleague from 
Minnesota, Mr. Ramstad, for his friendship and leadership, too.
  Mr. Speaker, I rise in really strong support of the Innocent Spouse 
Protection Act. Along with my great friend and colleague Senator 
Feinstein of California, I introduced this legislation because I 
believe that it will provide a straightforward solution to the unfair 
treatment of innocent spouses under the current law.
  Under the current Tax Code, the IRS may relieve an innocent spouse of 
liability for unpaid taxes if it would be unfair to hold that spouse 
responsible. No recourse exists, however, to prevent the IRS from 
seizing assets or garnishing wages if relief is not approved. The story 
of one Californian provides an example of the problem.
  The IRS seized all of her husband's income to pay a tax liability 
incurred 20 years earlier, very long before they were married, which is 
clearly not the responsibility of this spouse. But because the IRS 
seized all of the income, the taxes on the income remained unpaid and, 
as you can imagine, the ball keeps rolling along.
  When this woman's spouse died, the IRS pursued the innocent spouse 
for the taxes on her deceased husband's income. Along rolls the ball. 
She was forced to then sell her family home and all of her property 
owned jointly with her husband. In fact, the IRS may have her wages 
garnished along with funds set aside for her in a trust by a probate 
court in a completely unrelated family matter.
  Recent decisions by the Eighth and Ninth Circuit Courts of Appeals 
have denied the tax court jurisdiction over petitions for equitable 
relief. Consequently, there are no mechanisms for review or appeal of 
these IRS decisions.
  The aim of this legislation is to provide an avenue through which 
these decisions may be appealed. This bill in no way guarantees relief, 
but rather fixes the broken appeals process for these IRS decisions.

[[Page 22289]]

  Mr. Speaker, I urge my colleagues to support this small change that 
is supported by my colleagues on the Ways and Means Committee that will 
have a profound effect on the lives of many innocent spouses who 
deserve their day in court.
  Mr. McNULTY. Mr. Speaker, I yield back the balance of my time.
  Mr. RAMSTAD. Mr. Speaker, we have no further speakers on this bill, I 
urge my colleagues to support H.R. 6111, and I yield back the balance 
of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Minnesota (Mr. Ramstad) that the House suspend the rules 
and pass the bill, H.R. 6111, as amended.
  The question was taken; and (two-thirds of those voting having 
responded in the affirmative) the rules were suspended and the bill, as 
amended, was passed.
  A motion to reconsider was laid on the table.

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