Administrative Procedure  AP 638: Application Process for Relief from Joint Income Tax Liability

Date:	01/26/2024
Organization:	Massachusetts Department of Revenue
Referenced Sources:	Massachusetts General Laws

638.1 Introduction

A taxpayer who has jointly filed a personal income tax return may seek relief from joint tax liability under G.L. c. 62C, § 84 when certain criteria are met.  An eligible taxpayer who seeks such relief (the “requesting spouse”) may apply for innocent spouse relief, pursuant to G.L. c. 62C, § 84(b), and separation of liability relief, pursuant to G.L. c. 62C, § 84(c).  The Commissioner of Revenue (the “Commissioner”) may also grant equitable relief, pursuant to G.L. c. 62C, § 84(d), if they determine, in their sole discretion, that it is inequitable to hold the requesting spouse liable for any unpaid tax or deficiency, and the requesting spouse is not eligible for innocent spouse or separation of liability relief.

638.2 Application Process for Relief from Joint Income Tax Liability

(a) Timing of an Application

Pursuant to G.L. c. 62C, § 84(b) and G.L. c. 62C, § 84(c), a requesting spouse seeking either innocent spouse relief or separation of liability relief must submit a completed Form 84, Application for Relief from Joint Income Tax Liability, together with all required attachments, within two years after the Commissioner has begun collection activities with respect to such requesting spouse.

For purposes of the two-year period for claiming relief under G.L. c. 62C, § 84(b) and G.L. c. 62C, § 84(c), collection activities include but are not limited to:

i.  A bank account levy or a wage levy;

ii.  A lien, bill, or notice from the Commissioner of the commencement of collection activities (including a Notice of Intent to Assess, Notice of Assessment, Statement of Account, Final Notice, or Notice of Levy);

iii.  Offset of a tax refund;

iv.  Intercept of a state and/or federal refund or other government payment;

v.  Intercept of insurance proceeds, lottery or casino winnings;

vi.  Suspension or revocation of a driver’s license and/or a vehicle registration;

vii.  Suspension, revocation or non-renewal of a professional license or certificate;

viii.  Addition of the requesting spouse to the public disclosure list of delinquent taxpayers; and

ix.  Seizure of business or other assets.

A requesting spouse may not always receive notice that the Commissioner has begun collection activities.  A requesting spouse’s failure to receive a notice from the Commissioner does not extend the period for claiming relief under G.L. c. 62C, § 84.  In accordance with 830 CMR 62C.26.1, notices regarding income tax liability are sent to a taxpayer's last known address as it appears on the taxpayer's most recent income tax return or on a properly completed and submitted change of taxpayer's address form, whichever is last received by the Commissioner. 

(b) Submitting an Application

A requesting spouse seeking either innocent spouse relief or separation of liability relief must submit to the Commissioner a completed Form 84, together with all required attachments.  The requesting spouse may submit Form 84 electronically by logging on to MassTaxConnect at https://mtc.dor.state.ma.us/mtc/_/ and selecting “file an appeal.”  Taxpayers wishing to file a paper application instead may mail Form 84 to the Commissioner’s Office of Appeals at P.O. Box 9551, Boston, MA 02114-9551.  A requesting spouse may submit a single claim seeking either innocent spouse relief or separation of liability relief, or both.

(c) Required Documentation

An application for innocent spouse or separation of liability relief must include a completed Form 84, along with the following information and documentation:

i.  The name, address, and taxpayer identification numbers of the requesting spouse and the non-requesting spouse;

ii.  If applicable, a copy of the Notice of Intent to Assess or the Notice of Assessment that was issued for the tax year for which the requesting spouse is seeking relief;

iii.  If a Notice of Assessment was issued for the tax year for which the requesting spouse is seeking relief, a completed copy of Form ABT;

iv.  A written statement or affidavit, signed under the penalties of perjury, containing all the facts necessary for determining that the requirements of G.L. c. 62C, § 84 and 830 CMR 62C.84.1 are satisfied;

v.  If the requesting spouse has not sought federal innocent spouse relief, a completed U.S. Form 8857 Request for Innocent Spouse Relief;

vi.  If the requesting spouse has sought federal innocent spouse relief, copies of the following documents from the federal case:

      a.  U.S. Form 8857 Request for Innocent Spouse Relief (including any supporting or related documentation);  

       b.  The final federal determination letter; and

       c.  The relevant federal tax return(s).

638.3 Consideration of an Application for Relief from Joint Income Tax Liability

(a) Initial Review

The Office of Appeals will perform an initial review of each application.  If additional documentation is required, the Appeals Officer assigned to the case will contact the requesting spouse to ask for this information. 

(b) Non-Requesting Spouse

The Appeals Officer will send a notice to the non-requesting spouse’s last known address to inform the non-requesting spouse of the requesting spouse’s claim for relief.  The notice will provide the non-requesting spouse with the opportunity to submit any information that should be considered in determining whether the requesting spouse should be granted the relief requested.  A non-requesting spouse is not required to submit information.  Upon the request of either spouse, the Office of Appeals will share with one spouse the substantive information submitted by the other spouse, unless the Office of Appeals determines that the sharing of such information would impair tax administration.  The Office of Appeals will not share the contact information of one spouse with the other spouse.

(c) Representation

The requesting spouse and the non-requesting spouse need not be represented by counsel in any proceeding before the Department. A requesting spouse that wishes to be represented before the Department regarding their Form 84 must submit a completed “Form M-2848 – Power of Attorney and Declaration of Representative,” designating the individual(s) who may act on the requesting spouse’s behalf.

(d) Conference

After completing the initial review of the application and obtaining any additional documentation from the requesting spouse and the non-requesting spouse, the Appeals Officer will schedule a hearing.  The requesting spouse will be notified of the hearing’s date and time.  The non-requesting spouse does not participate in the hearing and will not be notified of the hearing date.

The hearing is conducted either in person at the Office of Appeals, located in Boston, Massachusetts; by telephone; or by video conferencing.  The requesting spouse may also ask that, in lieu of a hearing, a determination be based solely on the information in the case file and the requesting spouse’s and non-requesting spouse’s written submissions.

The Appeals Officer is responsible for conducting the hearing.  Either the requesting spouse or their authorized representative must participate in the hearing.  Other representatives of the Department of Revenue may also attend.  At any time during the review of an application, including during a hearing, the requesting spouse or the Appeals Officer may choose to discuss settlement of the case.

Hearings are informal, employing neither the rules of evidence nor testimony given under oath.  No transcript or formal record of the proceedings is made.  The Office of Appeals may request, however, that matters alleged as fact be submitted under the pains and penalties of perjury. 

Typically, the Appeals Officer will begin the hearing by summarizing the contested issues and then asking the requesting spouse to present their case.  The Appeals Officer also may pose questions to the requesting spouse.  If the Appeals Officer requests additional information from the requesting spouse, a date will be set by which the information must be submitted to the Office of Appeals to be considered in connection with the application.

The Appeals Officer will not make a determination at the hearing.  Rather, the matter will be taken under advisement, and the Appeals Officer will issue a notice of abatement determination and a determination letter, which typically set forth the Office of Appeals’ determination.  The notice of abatement determination and determination letter will inform the requesting spouse as to whether the application has been approved, denied, or denied in part. If the requesting spouse or the Office of Appeals has initiated the settlement process, the Appeals Officer will first prepare a settlement recommendation which will include a summary of the information presented at the hearing.

(e) Settlement Consideration

If the requesting spouse or the Office of Appeals has initiated the settlement process, the Appeals Officer will prepare a settlement recommendation for internal review.  The settlement recommendation is a confidential process and is discussed without the participation of the requesting spouse and the non-requesting spouse.  Upon review of the settlement recommendation, the Appeals Officer may be authorized by the Department to pursue settlement on specified terms or may be instructed that the matter is not appropriate for settlement.

After a settlement recommendation has been reviewed and settlement terms approved, the Appeals Officer will contact the requesting spouse or the designated representative to discuss the case and attempt to resolve the matter consistent with the terms established during the review.  When the requesting spouse and the Office of Appeals have agreed to settlement terms, the requesting spouse (or the designated representative) and the Department of Revenue must sign a written settlement agreement reflecting those terms. 

Once a settlement agreement has been signed, the matter in question may not be reopened absent fraud, misrepresentation of a material fact, or mutual mistake relating to a material fact.  Additionally, settlements may not be regarded as precedent in any other matter, including other settlements, whether or not involving the same requesting spouse.

If the requesting spouse and the Office of Appeals cannot reach mutually acceptable settlement terms, this fact will be confirmed in writing.  If a hearing relating to the matter was conducted, the letter will also serve as the determination letter.  The Appeals Officer will also issue a letter to the non-requesting spouse indicating the terms of the settlement.  In general, once settlement of a given matter has failed, it will not be reconsidered by the Office of Appeals.

(f) Final Determination.

If the requesting spouse and the Office of Appeals do not settle the matter, the Appeals Officer will issue a notice of abatement determination and a determination letter, which will inform the requesting spouse as to whether the application for relief has been approved, denied, or denied in part.  The Appeals Officer will also issue a letter to the non-requesting spouse indicating the outcome of the application.

638.4 Appeal Process for Denial of an Application for Relief from Joint Income Tax Liability

If the requesting spouse disagrees, in whole or in part, with the Office of Appeals’ final determination with respect to the requesting spouse’s application, he or she may appeal the determination by filing a petition with the Appellate Tax Board within 60 days after the date of the notice of abatement determination.