Some cases are landmarks because they set a rule. Lantz v. Commissioner is a landmark because of what happened after it. A federal appeals court upheld a deadline that cut off an innocent widow's claim, and the result helped push Congress to change the law.
The Facts
Cathy Lantz's husband was a dentist. In 2000 he was arrested for Medicare fraud, convicted and imprisoned. They had been married six years. Judge Posner's opinion says "there is no suggestion that she was aware of, let alone complicit in, his fraud." The IRS found the couple's joint return for the last tax year before his arrest understated their income and assessed more than $900,000 in tax, penalties and interest.
In 2003 Lantz received an IRS packet that included a notice of proposed levy, publications explaining collection and innocent spouse relief, and a form to request a Collection Due Process hearing. She did not respond, because her husband, from whom she had been estranged since his conviction, told her he would deal with it. He returned the hearing request form, said his wife was an innocent spouse and asked for the innocent spouse application. He died before filing it.
In 2006 the IRS applied her $3,239 refund for 2005 to the joint 1999 liability, which had grown to more than $1.3 million. Unemployed, she applied for innocent spouse relief. The IRS denied it because she had missed the two-year deadline that ran from the 2003 levy notice. The IRS conceded that, but for the deadline, she would be eligible for relief.
The deadline came from a Treasury regulation, 26 C.F.R. § 1.6015-5(b)(1). Subsections (b) and (c) of § 6015 contain statutory two-year deadlines. Subsection (f), the equitable relief provision, did not. The Tax Court, in a divided opinion, held the regulation invalid. The IRS appealed.
The Issue
Could the Treasury impose by regulation a two-year deadline for equitable relief under § 6015(f), when Congress wrote two-year deadlines into subsections (b) and (c) but not into (f)?
The Holding
Yes. The Seventh Circuit reversed the Tax Court and upheld the regulation.
The Reasoning
Silence is not a command
The Tax Court had said that by putting deadlines in (b) and (c) but not (f), Congress had "spoken" by its "audible silence." Judge Posner was unimpressed: "'Audible silence,' like Milton's 'darkness visible' or the Zen koan 'the sound of one hand clapping,' requires rather than guides interpretation." When a statute has no limitations period, courts usually borrow one rather than allow claims forever. Agencies, which make rules, are "not bashful about making up their own deadlines."
The collection statute is not a filing deadline
Lantz argued the 10-year collection period in § 6502 effectively limited claims. The court said that is a limit on the IRS's time to collect, not a limit on when a taxpayer must act.
No deadline in (f) would swallow (b) and (c)
The court's main point was structural. Relief under (f) is available only if relief under (b) and (c) is not. The substantive standards overlap heavily. If (f) had no deadline, anyone who missed the two-year deadline under (b) or (c) could simply file under (f), and the congressional deadlines "will be set largely at naught." The court noted that Lantz herself would likely have qualified under (b) and (c) if she had filed on time.
Congress delegated the details
Subsection (f) authorizes relief "[u]nder procedures prescribed by the Secretary," and § 6015(h) directs Treasury to issue necessary regulations. The court treated that as a broad delegation that included setting a deadline. It also noted that (f) says the Secretary "may" grant relief, so Treasury could reasonably deny relief to a class of late applicants. The court applied the deference framework of Chevron in reaching that conclusion.
What Changed After Lantz
Congress put a different rule in the statute
In the Taxpayer First Act of 2019, Congress amended § 6015(f). New § 6015(f)(2) says a request for equitable relief may be made for any portion of a liability that (A) has not been paid, provided the request is made before the collection period under § 6502 expires, or (B) has been paid, provided the request is made within the period for a timely refund claim. The amendment applies to requests filed or pending on or after July 1, 2019.
That is a very different deadline from two years after the first collection action. For an unpaid balance, it generally runs as long as the IRS can collect. The regulation's text still describes the two-year rule, but for equitable relief requests covered by the 2019 amendment, the statute now sets the time limit, and a statute controls over an inconsistent regulation.
Chevron is gone
The Seventh Circuit leaned on Chevron deference to uphold the regulation. In Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), the Supreme Court declared, "Chevron is overruled." The Court also said it did "not call into question prior cases that relied on the Chevron framework," whose specific holdings remain subject to statutory stare decisis. For § 6015(f) timing, the practical point is moot anyway, because Congress replaced the rule.
What It Means for Taxpayers Today
Late is not necessarily too late for (f)
If you missed the two-year window under § 6015(b) or (c), do not assume you are out of luck. Under current § 6015(f)(2), you can generally request equitable relief from an unpaid liability as long as the IRS can still collect it, and from a paid liability within the refund claim period. The two-year deadlines for (b) and (c) are still in the statute, so file as early as you can to keep all three options open.
Use the Collection Due Process hearing
Look at what Lantz received in 2003: a levy notice with a form to request a Collection Due Process hearing. A CDP hearing is one of the places to raise innocent spouse relief. IRC § 6330(c)(2)(A)(i) lists "appropriate spousal defenses" among the issues a taxpayer may raise. If a levy or lien notice arrives on a joint liability you believe should not be yours, request the hearing on time and raise the spousal defense there, along with a Form 8857.
Never let the other spouse "handle it"
Lantz's story turned on one decision: letting her estranged husband deal with the IRS. If you receive IRS notices about a joint liability, read them yourself, and file your own Form 8857 if you believe you qualify. Whatever your spouse promises, the deadlines are yours.
Refund offsets count as collection
The IRS applied Lantz's 2005 refund to the joint debt. Under the regulation, an offset of an overpayment is a collection activity that can start the (b) and (c) clocks. If a refund disappears to pay a joint debt you believe is not fairly yours, treat it as a warning to act. See our discussion of innocent spouse relief and the related cases Porter v. Commissioner and Cheshire v. Commissioner.
The Bottom Line
Lantz applied the law as it stood and reached a result even the court seemed to find harsh: an innocent widow lost relief the IRS admitted she otherwise deserved. The law no longer works that way for equitable relief. But the lesson of her case still does. Deadlines in the innocent spouse rules are real, and the person who pays for missing them is the spouse who waited for someone else to act.