GAO Reports  
GAO-02-558 April 24, 2002

Tax Administration: IRS's Innocent Spouse Program
Performance Improved; Balanced Performance Measures Needed

By law, married persons who file joint tax returns are each fully responsible for the accuracy of the tax return and for the full tax liability. This is true even though only one taxpayer may have earned the wages or income shown on the tax return. Under the Internal Revenue Service's (IRS) Innocent Spousal Program, IRS can relieve taxpayers of tax debts on the basis of equity considerations, such as not knowing that their spouse failed to pay taxes due. Since passage of the IRS Restructuring and Reform Act of 1998, IRS has received thousands of requests from taxpayers for innocent spouse relief. IRS's inability to provide timely responses to such requests has generated concerns among taxpayers, Congress, and other stakeholders. IRS reached decisions on 21 percent more cases than it received in fiscal year 2001, reducing some of its backlog from previous years. The agency accomplished this through a variety of initiatives, including a substantial staffing commitment, centralization and specialization, automated tools, and routine estimating of future workload and staffing needs. IRS's procedures conform to applicable guidance for transferring tax liabilities from joint tax accounts to individual tax accounts when innocent spouse relief has been granted. The procedures follow federal internal control guidelines by requiring a mix of checks, verifications, reconciliations, and documentation to support steps throughout the process. The Web site for IRS's Innocent Spouse Program--part of IRS's agency wide Web site--went on-line in December 1999 to help taxpayers determine their eligibility for innocent spouse relief. Because IRS has not evaluated the Web site, the agency does not know how useful the Web site has been to taxpayers in determining their eligibility for innocent spouse relief.

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