The United States tax system allows married couples to file joint tax returns. For those married couples that jointly file, there is joint and severable liability for the taxes due on those returns. Because spouses who file joint tax returns are held both jointly and severally liable for those joint returns, the drafters of the Tax Code created an exemption from liability for innocent spouses in Section 6015 of the Tax Code. Section 6015(e) of the Tax Code expressly grants subject matter jurisdiction to the Tax Courts to review determinations of innocent spouse relief. However, the language of Section 6015(e) can also be interpreted to recognize that a request for innocent spouse relief may be reviewed and determined by a court other than the tax court provided it is another “remedy provided by law.” The “in addition to any other remedy provided by law” language of Section 6015(e) raises a question of whether Section 6015(e) of the Tax Code permits bankruptcy courts to determine a request for innocent spouse relief under Section 505(a)(1) of the Bankruptcy Code.
This article will explore whether bankruptcy courts have the subject matter jurisdiction to determine a debtor’s request for innocent spouse relief on taxes affecting the bankruptcy estate in two parts. Part I examines how some courts have concluded that bankruptcy courts do not have the authority to determine a debtor’s request for innocent spouse relief. Part II explores how other courts have determined that bankruptcy courts have the authority to grant innocent spouse relief to a debtor under Section 505(a)(1) of the Bankruptcy Code only if the debtor complies with the procedures of Section 6015(e) of the Tax Code.