When the Marriage Was Abusive: How the IRS Treats Abuse and Financial Control

Some of the hardest calls I take start the same way. The caller is not just worried about the IRS. She is worried about him. He controlled the money. He signed her name or told her where to sign. She was afraid to ask questions. Now the tax debt from that marriage is following her into her new life.

The law has specific rules for this situation. They are more protective than most people realize. This guide explains them, and it also explains the uncomfortable parts, including the fact that the IRS must contact your former spouse.

How the IRS defines abuse

Revenue Procedure 2013-34, section 4.03(2)(c)(iv), describes abuse broadly. It says abuse comes in many forms and can include physical, psychological, sexual, or emotional abuse, including efforts to control, isolate, humiliate and intimidate the requesting spouse, or to undermine the requesting spouse's ability to reason independently and be able to do what is required under the tax laws.

The same section says all the facts and circumstances are considered, the impact of the other spouse's alcohol or drug abuse is considered, and, depending on the facts, abuse of your child or another family member living in the household may constitute abuse of you.

There is no requirement that you were physically injured. Control, isolation and intimidation count.

Financial control is its own category

Revenue Procedure 2013-34 repeatedly treats a second situation alongside abuse: where the nonrequesting spouse maintained control over the household finances by restricting the requesting spouse's access to financial information. You do not have to prove abuse to benefit from this. If you were cut off from bank statements, kept away from the mail, denied passwords, or told the finances were none of your business, that is financial control.

Where abuse and financial control change the outcome

These facts do not create a separate kind of relief. They change how the existing rules apply, in at least six places.

1. The knowledge factor in equitable relief

Under section 4.03(2)(c)(i) and (ii) of the revenue procedure, if abuse or financial control meant you could not challenge the treatment of items on the return, or could not question payment of the tax, for fear of retaliation, the knowledge factor weighs in favor of relief even if you knew or had reason to know. That turns the most dangerous factor in an equitable relief case into a favorable one.

2. Streamlined relief

Section 4.02(3)(a) says that the same abuse or financial control satisfies the knowledge element for streamlined relief. If you are no longer married and would suffer economic hardship, abuse can be the third piece that gets you a streamlined determination. See the guide to section 6015(f) factors.

3. Items that are actually yours

Normally, equitable relief is limited to liabilities attributable to your spouse. Section 4.01(7)(d) creates an exception: if you were abused before the return was filed and, because of that abuse, could not challenge the treatment of items or question payment for fear of retaliation, the IRS will consider relief even if the deficiency or underpayment is attributable in part or in full to your item.

4. Significant benefit

Section 4.03(2)(e) says that if your spouse controlled the finances or there was abuse, such that your spouse made the decisions to spend money on a lavish lifestyle, the significant benefit factor becomes neutral instead of negative.

5. Disqualified asset transfers

Section 4.01(5) says that even if your spouse transferred disqualified assets to you, you may still be eligible for relief if your spouse abused you or maintained control of the household finances by restricting your access to financial information.

6. Actual knowledge under separation of liability

Treasury Regulation 1.6015-3(c)(2)(v) says that if you establish you were the victim of domestic abuse before the return was signed, and as a result you did not challenge the treatment of any items for fear of retaliation, the actual knowledge limitation on a section 6015(c) election does not apply. See the guide to the actual knowledge rule.

Abuse versus duress

Abuse and duress are related but not the same. Revenue Procedure 2013-34 describes the abuse it considers as abuse not amounting to duress, and it points to Treasury Regulation 1.6015-1(b), which in turn points to Treasury Regulation 1.6013-4(d).

Under that regulation, if you establish that you signed a return under duress, the return is not a joint return as to you. You are not jointly and severally liable for the tax shown on it or any deficiency. The return is adjusted to reflect only the liability of the spouse who signed voluntarily.

Duress goes to whether you signed voluntarily at all. Abuse, in the 6015 sense, goes to whether you felt free to question what you signed. If you were forced to sign, the duress route may be stronger. The guide to returns signed under duress covers it, and the Form 8857 instructions tell you to explain forgery or duress in the space provided on line 11.

The hard part: the IRS must contact your former spouse

I will not sugarcoat this. The Form 8857 instructions say that, by law, the IRS must contact your spouse or former spouse, and that there are no exceptions, even for victims of spousal abuse or domestic violence. Treasury Regulation 1.6015-6(a) requires the IRS to notify the nonrequesting spouse of your claim, give that person an opportunity to submit information, and notify that person of the preliminary and final determinations.

What the IRS will protect is your personal information. The instructions say the IRS will not disclose your current name, address, phone numbers, or information about your employer, income or assets. Other information you provide and that the IRS uses in its determination could be disclosed to your former spouse. The instructions recommend redacting personal information from what you submit if you have privacy concerns.

If your case goes to the Tax Court, the instructions warn that your former spouse may see your personal information unless you ask the court to withhold it. Make that request. Plan for it before you file.

What evidence helps

Form 8857 (Rev. June 2021) has a dedicated section, Part V, for victims of domestic violence or abuse. It says the information is not mandatory, asks you to describe the abuse and how it affected your ability to question the return or the payment of tax, and notes that if you answer yes, the IRS will put a code on your account so it can respond appropriately, which you can decline. The form lists examples of documentation to attach. Useful items can include:

• Protection or restraining orders.
• Police reports.
• Medical records, including those of therapists or counselors, or a doctor's report or letter.
• Injury photographs.
• A statement from someone who was a victim of or witnessed the abuse or its results.
• Texts, emails or voicemails showing threats, control or intimidation.
• Evidence that you were cut off from accounts, mail or financial information.
• Divorce pleadings or findings that describe the abuse.

Not everyone has these. Many abused spouses never called the police. Your own detailed, specific statement, signed under penalties of perjury on Form 8857, is evidence too. Specifics matter more than adjectives: what happened, when, and how it affected what you did with the tax return.

Health matters too

Abuse often comes with health consequences. Revenue Procedure 2013-34, section 4.03(2)(g), says poor mental or physical health at the time the return was filed, or at the time you requested relief, weighs in favor of relief, and the IRS considers the nature, extent and duration of the condition. Document it.

Getting help

Low Income Taxpayer Clinics and the Taxpayer Advocate Service are referenced in the Form 8857 instructions as sources of help. If safety is a concern, put that first. Form 8857 itself points readers to the confidential 24-hour National Domestic Violence Hotline at 1-800-799-SAFE (7233). The tax problem has deadlines, but most of them can be managed. You should not have to choose between your safety and your tax case, and with planning you usually do not have to.