Bill > H3946

This bill, titled "Relative to innocent spouses," proposes changes to Massachusetts General Laws Chapter 62C, Section 84, concerning relief from liabilities on joint tax returns. The key provisions allow an individual who filed a joint tax return to seek relief from tax deficiencies under certain conditions. Specifically, if a tax understatement on a joint return is due to the erroneous items of one spouse, the other spouse can be relieved of liability if they did not know and had no reason to know of the understatement, and it would be inequitable to hold them liable. This relief must be elected within two years of the tax authority beginning collection activities. Additionally, for individuals who are no longer married, legally separated, or not living together, the bill allows them to elect to limit their liability to their allocated portion of the deficiency, provided they meet certain criteria and did not have actual knowledge of the items causing the deficiency at the time of signing the return, unless they signed under duress. The bill also outlines procedures for allocating deficiencies between spouses and provides for equitable relief in cases where relief is not available under the other provisions. Importantly, no credit or refund is allowed as a result of electing to limit liability under the provisions for separated or divorced spouses.