§1584. Innocent spouse rule

A. In addition to the provisions of R.S. 47:101(B)(7), a natural person shall be relieved from liability for any tax, penalties, interest, or other amounts for the applicable tax year as provided in this Section as if the person is an innocent spouse as provided for in this Section.

B. A spouse shall be relieved from such liability to the extent that such liability is attributable to the failure to file a report or return, or to remit any tax, penalty, interest or other amount as required under any provision of this Subtitle, and occurs under the following conditions:

(1) The spouse is a spouse of a taxpayer who failed to file a report or return, or who failed to remit any tax, penalty, interest or other amount as required under any provision of this Subtitle, or the spouse of a taxpayer whose business entity so failed.

(2) The spouse establishes that he did not know of, and had no reason to know of such failure.

(3) Taking into account all of the facts and circumstances, it is inequitable to hold the spouse liable for the failure to file or pay a tax, penalty, interest or other amount as required under any provision of this Subtitle attributable to such actions of the other spouse.

(4) The spouse elects the benefits of this Section not later than two years after the date the secretary has begun collection activities with respect to the spouse making the election. However, the secretary may nevertheless relieve the spouse of such liability as provided for in this Section, if she further finds both of the following:

(a) Either the spouse had little or no involvement with the actions of the other spouse, and that the spouse did not know of, and had no reason to know of, such actions, or that the spouse was mentally or physically coerced to maintain silence regarding such actions.

(b) Taking into account all the facts and circumstances, it is inequitable to hold the spouse liable for any failure to file a return or report or failure to remit any tax, penalty, interest or other amount as required under any provision of this Subtitle.

C.(1) If a spouse who otherwise qualifies for relief under Subsection B of this Section establishes he did not know, and had no reason to know, the actions of his spouse leading to the failure to file or pay, then such spouse shall be relieved of liability for tax, interest, penalties, and other amounts to the extent that such liability is attributable to the actions of the other spouse of which the spouse did not know and had no reason to know.

(2) In addition, a spouse who qualifies for relief pursuant to this Section may have any lien, privilege, mortgage, or other encumbrance recorded by virtue of this Subtitle cancelled on any property that the spouse can show to the satisfaction of the secretary is for the spouse's personal use, such as the place where the spouse resides.

Acts 2005, No. 295, §1, eff. June 29, 2005.

NOTE: See Acts 2005, No. 295, §2, relative to retroactivity.