As tax-preparing season ramps up, most lawyers may be surprised to learn that the Internal Revenue Service has embraced equity in its rules benefiting individuals owing IRS back taxes. A lawyer can obtain hero status in a client’s eye by utilizing these IRS equity programs to eliminate a qualified client’s full IRS back-tax liability without paying a penny to the IRS, write Robert V. Schaller and Elizabeth H. Schaller in their January 2023 Illinois Bar Journal article, “Banishing Back Taxes.” “Best of all,” the Schallers note, “the client does not have to file bankruptcy to discharge the tax liability.” In the first part of the, the Schallers discuss the IRS’s “Innocent Spouse Relief” equity program, which applies to a qualifying divorcing or divorced client who suffers from IRS back taxes as a result of their spouse’s bad acts or omissions. In the article’s second half, the authors focus on the IRS’s “Effective Tax Administration” equity program, which applies to any qualified individual owing IRS back taxes.

Read "Banishing Back Taxes" in the January IBJ.