Document Type
Research Memorandum
Publication Date
2024
Abstract
(Excerpt)
Innocent-spouse relief is an equitable remedy provided by Internal Revenue Code section 6015(f), where the Secretary of the Treasury may "relieve [an] individual of . . . liability" if "taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency . . . ." Essentially, it provides a joint-filer who normally is jointly and severally liable for the tax liabilities of his or her spouse relief from liability if it would be inequitable to do otherwise.
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This memorandum addresses: (1) the limits of a bankruptcy court’s jurisdiction over innocent-spouse and other tax claims under Bankruptcy Code section 505, with regard to (a) the bankruptcy court’s lack of initial subject matter jurisdiction over innocent-spouse relief claims, and (b) the preclusion towards adjudicating a tax dispute that has been finally concluded; and (2) a recent decision from the Western District of Pennsylvania which denied bankruptcy court jurisdiction over innocent-spouse claims. The decision appears to be an outlier and will not likely be followed by other jurisdictions.