Uncertainty Over Bankruptcy Court Jurisdiction in Innocent Spouse Cases Seeking Equitable Relief

In re Geary is the latest in a line of cases where district and bankruptcy courts struggle to determine whether they have jurisdiction over innocent spouse cases. Geary, a bankruptcy case, concludes that bankruptcy courts do not have jurisdiction to determine whether a taxpayer qualifies for innocent spouse relief if seeking relief under § 6015(f). Presumably, this court would have determined it had jurisdiction if the debtor had sought relief under § 6015(b) or (c).  This post discusses the case and the issues it presents.


The modern innocent spouse provisions have been in the Code for a few decades. From the start, there were questions about how and whether a court could review IRS determinations regarding requests for relief. Congress has stepped in on a few occasions. For example, it clarified that requests for equitable relief are subject to Tax Court review. Additionally, in the Taxpayer First Act (TFA) Congress added rules on both the evidence that courts can consider and the standard of review that courts would employ.

As Nina recently discussed in Thomas v. Commissioner: Some clarity on “newly discovered evidence” under IRC 6015(e)(7) that comes with a reality check, the Tax Court has attempted to provide some certainty on the TFA scope of review changes. As Nina noted, that attempt may leave some taxpayers out in the cold, and a legislative fix is likely needed to allow for the Tax Court to consider evidence that may be relevant to a determination.

Another area that needs a legislative fix is clarifying when courts other than the Tax Court have jurisdiction over these cases. Keith recently discussed one such issue in Jurisdiction of District Court in Innocent Spouse Case, where a federal district court found that it had jurisdiction to adjudicate a claim for equitable relief in a refund proceeding despite an argument regarding § 6015(f) essentially identical to the argument advanced by the government in the Geary case.  I will not repeat all of Keith’s excellent post but suffice it to say that district courts have struggled to determine if they have jurisdiction to hear these cases in refund cases and collection suits brought by the government since 1998.  The argument advanced in Geary and in the refund suit discussed in the above link appears to be a refinement of the government’s position.  We have noted before that the Department of Justice has taken internally inconsistent position on the issue of the jurisdiction of district courts to hear refund cases based upon innocent spouse relief.

Similarly, bankruptcy courts have struggled to determine if Bankruptcy Code § 505 provides jurisdiction for innocent spouse cases. BC § 505(a)(1) provides that a bankruptcy court “may determine the amount or legality of any tax, any fine or penalty relating to a tax, or any addition to tax, whether or not previously assessed, whether or not paid, and whether or not contested before and adjudicated by a judicial or administrative tribunal of competent jurisdiction.” 

In concluding that BC § 505(a)(1) did not grant it jurisdiction to consider a request for equitable relief, the Geary opinion looked to Section 6015(f). The language in (f) provides the following:

Under procedures prescribed by the Secretary [of the Treasury], if—(A) taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either), and (B) relief is not available to such individual under subsection (b) or (c), the Secretary may relieve such individual of such liability  (emphasis in opinion).

From there, Geary states that “Congress granted only the Secretary of the Treasury the equitable power to grant innocent spouse relief under subsection (f). The statute is unambiguous in this regard, suggesting an end to the inquiry. (footnote omitted but citing some cases which essentially ended the inquiry there).

Geary acknowledges that other bankruptcy courts have gone further and found jurisdiction by looking to IRC 6015(e)(1)(A), which provides that “in addition to any other remedy provided by law, the individual may petition the Tax Court (and the Tax Court shall have jurisdiction) to determine the appropriate relief available to the individual under this section.” (my emphasis)

From there, Geary notes that “[e]xcept where a refund suit is commenced in the federal district court, most courts agree that this provision grants the Tax Court exclusive jurisdiction to hear appeals under subsection (f).”

But, as Keith’s post above notes, not all courts have agreed with this limiting language, especially in light of 6015(e)(1)(A)’s reference that the path to Tax Court review is “in addition to any other remedy provided by law.” And, as Geary states, in finding that they had jurisdiction some bankruptcy courts, including In re Pendergraft, have concluded that BC § 505 is another remedy provided by law and is aligned with the broad purpose of the bankruptcy law in providing for avoiding delays in administering a bankruptcy estate.

Yet, Geary declines to go down that path:

In re Pendergraft concludes that “innocent spouse” relief under I.R.C. § 6015(f) fits neatly within the bankruptcy court’s jurisdiction “to determine the legality of a tax,” but this Court is unconvinced. The relief In re Pendergraft envisioned involves: (1) reviewing the Secretary’s denial of relief; or (2) determining “appropriate relief” in the absence of a timely decision. Either way, the Debtor is not arguing that the taxes are illegal, just that they should be waived for equitable reasons. In fact, equitable relief is usually distinguished from legal remedies. And she is not asking the Court to determine the amount of the tax. The Service already did that, which is her problem. (notes omitted)

Despite Geary finding that it had no jurisdiction, the court candidly stated that it was “unsure what “other remedy provided by law” was contemplated when Congress enacted I.R.C. § 6015(e)(1)(A).”

That uncertainty was insufficient to find that it had jurisdiction:

Still, the structure of subsection (e) does not point to section 505. First, it seems peculiar for Congress to carefully limit federal jurisdiction over subsection (f) only to imply bankruptcy jurisdiction through a vague prefatory clause. After all, I.R.C. § 6015(e)(6) explicitly addresses the impact of bankruptcy cases on the time periods for seeking relief, so one might expect Congress to reference section 505 more directly. It is also telling that Congress acknowledged when a federal district court could acquire jurisdiction over “innocent spouse” relief and expressly curbed the jurisdiction of the Tax Court in those situations. Finally, In re Pendergraft perceived an ambiguity in I.R.C. § 6015(e)(1)(A) because the statutory timing procedures only apply to the Tax Court, not to “other remed[ies] provided by law.” In this Court’s view, that ambiguity reveals that section 505 is not really a “[an]other remedy” but a means to exercise the Tax Court’s jurisdiction under I.R.C. § 6015(e)(1)(A). (notes omitted)


It is suboptimal tax administration when courts differ as to whether they have jurisdiction to hear requests for equitable relief. The innocent spouse provisions are remedial. It is hard for me to square Congress’ statement that Tax Court review is in addition to other remedies provided by law with Geary’s view that it does not have jurisdiction. When Congress gets around to fixing the Thomas problem that Nina highlighted, it should also clarify that district courts in collection, refund and bankruptcy matters also have jurisdiction to consider requests for relief from joint and several liability.

Thomas v. Commissioner: Some clarity on “newly discovered evidence” under IRC 6015(e)(7) that comes with a reality check

PT readers may be interested to join the next free virtual Tax Chat! in the Transforming Tax Administration series hosted and organized by the Center for Taxpayer Rights.  This week’s Tax Chat! is on IRS IT Challenges and will be held on Tuesday April 18 at 1:30 PM EDT.  Guests include GAO’s David Hinchman, Fred Forman (IRS former Associate Commissioner of Business Systems Modernization) and Marina Nitze, former Chief Technology Officer, US Dept. of Veterans Affairs.  The recent GAO report on IRS legacy systems was discussed in https://www.wsj.com/articles/tax-irs-technology-gao-report-1dcdc87?st=sfgal294m8zr5no&reflink=desktopwebshare_permalink.  If you haven’t yet registered for the series, you can do so here.

The Taxpayer First Act amended IRC § 6015(e) to make clear the standard of judicial review in innocent spouse cases was de novo.  At the same time, however, Congress added § 6015(e)(7), which provides that such review shall be limited to the administrative record along with “newly discovered or previously unavailable evidence.”  This latter provision provoked despair among practitioners representing taxpayers seeking § 6015 relief, especially in cases where domestic abuse played a role.  We all knew the administrative record of proceedings arising from the IRS’s Cincinnati Centralized Innocent Spouse Operation (CCISO) is almost always sparse, reflecting the woefully inadequate administrative process.  So the key to obtaining meaningful judicial review would be the Tax Court’s interpretation of the “newly discovered or previously unavailable evidence.”  PT has previously discussed the “Fatty Rule” here and here, relating to previously unavailable evidence, but until recently we have not had insight into the court’s position on newly discovered evidence.

Enter Thomas v. Commissioner, 160 T.C. No. 4 (2023).  Ms. Thomas, representing herself at trial, wanted to introduce some evidence that was not part of the administrative record, and she wanted to block some evidence – professional blogs in which she provided favorable information about her lifestyle and relationship with her spouse during the period before the court — that was not part of the administrative record and that the IRS wanted admitted as newly discovered evidence.  On April 26, 2022, Judge Toro entered an order requiring the parties to brief whether the various pieces of evidence should be admitted despite not being part of the administrative record; he also strongly encouraged Ms. Thomas to obtain pro bono counsel.


Fast forward to July 25, 2022, by which date Megan Brackney had agreed to represent Ms. Thomas on a pro bono basis, and the Center for Taxpayer Rights, the Community Tax Law Project, the University of California – Hastings Low Income Taxpayer Clinic, and the Villanova Law School Tax Clinic filed an amicus brief in the Tax Court on the matter.

And now we have Judge Toro’s opinion, issued on February 13, 2023 and reviewed by the full court, in which he allows the blogs to be admitted into evidence as ”newly discovered.”  While this result is certainly disappointing to Ms. Thomas, the question of how to weigh this evidence is still open.  Regardless, given the analysis in the ruling, going forward it may very well be more helpful for taxpayers than for the IRS.  Indeed, in footnote 5, the court points out that “our conclusion would be the same if, for example, a requesting spouse were to seek to introduce into evidence posts from a blog that the nonrequesting spouse maintained without the requesting spouse’s knowledge and that the requesting spouse discovered after the IRS had made a determination with respect to the request.”

The order starts off by determining that the phrase “newly discovered” should be interpreted according to the ordinary meaning of the words, and finds, relying on several dictionaries, that in 2019 (when the subsection was enacted), “newly discovered” meant “recently obtained sight or knowledge of for the first time.”  Since the blogs were discovered by the IRS after the administrative record was closed, even though they had been posted earlier, they were “newly discovered” and thus admissible. 

Ms. Thomas had urged the court to apply the Federal Rule of Civil Procedure (FRCP) 60(b)(2)’s approach to newly discovered evidence.  Under FRCP 60(b)(2), a court could consider a motion for a new trial on the basis of “newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial.”  (Emphasis added.)  According to Ms. Thomas, since the blog posts were public and could be discovered with a reasonably diligent search during the administrative proceeding, the evidence should be excluded at trial.  Judge Toro, however, was not persuaded; he noted that the 60(b)(2) language existed at the time IRC § 6015(e)(7) was added, but was not included in the amendment; and at any rate, the court found that the “reasonable diligence” language was not a definition of the phrase “newly discovered” but rather a limitation on its meaning.

On the other hand, IRC § 6015(e)(7) does contain qualifying language:  “any additional newly discovered evidence.”  The court cited the Supreme Court’s position that “any” has an expansive meaning – “one or some indiscriminately of whatever kind.”  Thus, the court found that “any additional” counsels against adopting a limiting interpretation of the phrase “newly discovered.”

The court next noted that this expansive interpretation of “newly discovered” was further supported by the simultaneous grant of de novo review in these cases.  Administrative record cases typically involve an abuse of discretion standard, while de novo review means a fresh record.  Thus, the grant of de novo review supports the conclusion that evidence unknown to the parties in an innocent spouse proceeding should be admissible if offered by a party before the Tax Court.

Finally, distinguishing FRCP 60(b)(2) where the parties have already had an opportunity to conduct discovery, present testimony and subpoena witnesses at trial, such that a reasonable diligence rule makes sense, in the context of the IRS “relatively limited administrative proceeding, . . . .[t]he more permissive rule in section 6015(e)(7) is appropriate in these circumstances.”  And in what the made all of us who participated in drafting the amicus brief stand up and do a happy dance, the court concluded by noting:

Our holding here is generally consistent with the amici’s view that “exceptions to the administrative record rule of § 6015(e)(7) [should] be applied expansively given the de novo review the court must conduct, the requesting spouse’s specific circumstances, and the nature of the IRS’s administrative procedures.” Amicus Br. 2. And as we have already observed, see note 5 above, the rule we adopt today would apply similarly to evidence that is newly discovered by the requesting spouse or the Commissioner.

Now, before we get too excited about all this, we must turn to the concurring opinion – the reality check, so to speak.  Judge Buch, joined by Judges Ashford and Copeland, concurs with the court’s opinion “without reservation” but writes to highlight the gap between what Congress may have intended to achieve by enacting § 6015(e)(7), and what the statutory language actually says.  He gives two examples – one, an abused spouse puts on social media glowing posts about family events and vacations; the other, also an abused spouse, posts comments about the abuse and participates in an online forum for abused spouses, as well as posting photos of her bruises.  In each instance, upon leaving her spouse, she seeks relief under IRC § 6015 but does not submit these social media posts to the IRS for consideration.  Thus, the social media posts are not part of the administrative record before the court. 

In the first example, the Commissioner seeks to admit the glowing social media posts as newly discovered evidence, and as in Thomas, the court is likely to admit them.  In the second example, the Petitioner seeks to admit the posts demonstrating the existence and effects of the abuse.  Here, the Petitioner both created and controlled those posts.  Judge Buch writes that “it may be difficult for her to establish that this potential evidence is newly discovered or previously unavailable to her. As a result, she may be precluded by section 6015(e)(7) from introducing this evidence.”

Judge Buch notes that this result seemingly runs contrary to what Congress was hoping to achieve with the amendment to § 6015 in the Taxpayer First Act, namely resolving the conflicts in the circuit about the de novo standard of review; the amendment was included in a law that was all about enhancing taxpayer protections.

The majority opinion reserves these issues raised by the amicus and the concurrence for another day:  “To the extent the amici raise additional points that go beyond the facts of this case, we need not address them here, and we leave their resolution for another day.” 

So Congress’ work as legislators, and our work as advocates, is not yet done.  No one has come forward on the Hill or from the IRS to explain why the administrative record language was plopped into the statute.  But there is something that can be done, immediately, that doesn’t require legislation.  In his opinion, Judge Toro quotes extensively from amici’s description of the “skeletal” IRS innocent spouse procedures, including the following language:

Taxpayers, particularly pro se taxpayers without sufficient legal knowledge of IRS and court processes, may be unaware of what additional documents or information would support their case. Under the IRS’s innocent spouse processing procedures, CCISO has no requirement to provide a requesting spouse with documents or information supplied by the non-requesting spouse at the pre-Appeals stage. See IRM 25.15.18 (Jan. 15, 2020). To the extent that CCISO relies on information from a non-requesting spouse to deny the requesting spouse’s innocent spouse claim, taxpayers may be unaware of the need to submit additional documents to rebut that information.

The IRS has had 25 years to develop taxpayer-friendly and administratively accessible and inclusive innocent spouse procedures.  It doesn’t need to wait for a legislative fix to change its procedures and avoid the harm Judge Buch identifies in the concurring opinion.  The Thomas case demonstrates that IRS needs to fix things, stat

To help the IRS get started with this reform, an upcoming post will discuss comments the Center and two clinics submitted proposing substantial revisions to Form 8857, the IRS form to request innocent spouse relief. These revisions would elicit the necessary information at the administrative stage, leading to more accurate administrative resolutions, or at least a more complete administrative record for the Tax Court to review de novo.

Jurisdiction of District Court in Innocent Spouse Case

On March 22, 2023, in the case of Viktoriya Korleshchuk-Petrie v. United States, Dk. No. 21-cv-40125-DHH (D. Mass.), the court denied the Department of Justice (DOJ) Tax Division trial section’s dual motions to dismiss the case for LOJ under FRCP 12(b)(1) and for failure to state a claim under FRCP 12(b)(6). The court found her complaint contained sufficient allegations to survive a motion to dismiss for failure to state a claim. In its 12(b)(1) motion, the DOJ argued that the district court lacked jurisdiction to hear a refund suit filed in an innocent spouse case brought seeking relief pursuant to IRC 6015(f). Almost four years ago, the U.S. District Court for the District of Oregon rejected the same DOJ jurisdictional argument. The court’s decision agrees with Hockin v. U.S., 400 F. Supp. 3d 1085 (D. Or. 2019), but conflicts with Chandler v. U.S., 338 F. Supp. 3d 592 (N.D. Tex. 2018). Right now, there is no controlling appellate authority on this issue, but there is some dicta. I mention that this matter was brought by the trial section of DOJ since that group of DOJ Tax Section has not aligned with the Appellate Section in the arguments it has made on this issue. See discussion here.

DOJ Tax Division trial section now takes the position in this case that a person seeking a refund based on innocent spouse relief could bring a refund suit if the relief was based on 6015(b) or (c) but not on (f).  This seems to be a refinement of the trial section’s prior position.  The DOJ brief is here.

 Ms. Korleshchuk-Petrie was represented by Audrey Patten, the director of the Tax Clinic at the Legal Services Center of Harvard Law School, and Fritz Schemel a 2L.  Their brief can be found here


Ms. Korleshchuk-Petrie moved to the US in 2007 and married Mr. Petrie.  They had two children.  He had numerous problems as a husband as well as legal problems that landed him in prison for selling controlled substances.  She obtained a restraining order against him and eventually a divorce.  The IRS made changes to their 2007 joint return.  She filed for innocent spouse relief in the past and did not file a Tax Court petition when the IRS denied her relief.  The IRS offset her refunds which fully paid the liability.  She timely filed a claim for refund.  The IRS did not respond.  She timely filed suit for refund after waiting six months from the time of her claim.

DOJ seeks to dismiss her case based on lack of jurisdiction because of a lack of waiver of sovereign immunity for a suit seeking a refund pursuant to innocent spouse relief based on 6015(f).  It argues that unlike 6015(b) and (c) which provide mandatory relief if the statutory provisions are met, the relief under 6015(f) is discretionary and therefore the exercise of discretion by the IRS in denying relief is not subject to judicial review by the district court but only by the Tax Court.

The fight initially centers on 28 USC 1346(a)(1) which provides:

The district courts shall have original jurisdiction, concurrent with the United States Court of Federal Claims, of: (1) Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws.

The court states that the statute has three requirements.  First, the taxpayer must file a claim.  Second, the taxpayer must fully pay the tax and meet the Flora rule (even though Flora was a case involving deficiency proceedings having nothing to do with innocent spouse claims.)  Third, the claim must be timely.  The court finds there is no dispute that the three pre-conditions for bringing suit in district court were met.  So, it finds that she meets the plain language requirements for relief in the district court.  It states:

The Williams Court [United States v. Williams, 514 U.S. 527 (1995)] characterized 28 U.S.C. § 1346(a)(1) as “waiv[ing] the Government’s sovereign immunity from suit by authorizing federal courts to adjudicate ‘[any] civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected.’” Id. at 530. Indeed, after listing the categories of alleged bases for seeking a refund in district court, Congress added a basis for seeking a refund for a tax “in any manner wrongfully collected.” In sum, Congress appears to have captured virtually every permutation of a claim for a refund and, introducing its scope with the word, “any,” certainly excludes no particular class of refund claims.

The court then states:

I find that § 6015(f) fits comfortably within the plain meaning of 28 U.S.C. § 1346(a)(1), and hence that Congress has waived sovereign immunity for refund claims predicated on § 6015(f).

After finding that the plain meaning of the relevant statute supports allowing a person seeking a refund based on innocent spouse relief, the court then addresses the specific argument that court review is not allowed because relief under 6015(f) is discretionary. Here it says:

The Government’s argument that discretionary relief determinations are insulated from “wrongfulness” under 28 U.S.C. § 1346(a)(1) is further undermined by its concession that § 6015(e) provides for review of § 6015(f) determinations in the Tax Court. Certainly, the language of § 6015(e) supports the Government’s position that the Tax Court can review § 6015(f) determinations. However, the fact of a route to review of a § 6015(f) relief denial in any forum necessarily contemplates that the Secretary’s equitable determination may not be correct.

So, the court finds that district court’s have jurisdiction to hear refund suits for innocent spouse relief even if the basis for the requested relief is 6015(f). 

The arguments against jurisdiction by DOJ Tax Division trial section do not stop there.  It next argues that Congress granted the Tax Court exclusive jurisdiction in 6015(f) cases citing to 6015(e).  The court rejects this argument as well finding that 6015(e) pertains only to the Tax Court jurisdiction over 6015 claims but does not indicate that the Tax Court’s jurisdiction is exclusive.

to the precise contrary, § 6015(e)(1)(A) provides that, “[i]n addition to any other remedy provided by law, the individual may petition the Tax Court … to determine the appropriate [innocent spouse] relief available[.]”

Again, the DOJ Tax Division trial section makes a very nuanced argument concerning jurisdiction in 6015(f) cases:

The Government argues that under the plain terms of § 6015(e), refund claims cannot be premised on § 6015(f) where, as here, the IRS collects a tax deficiency “after denial of relief that is not appealed to the Tax Court[.]” [Dkt. No. 18, p. 8]. The Government suggests that under § 6015(e)(3), the one “discrete instance” in which a district court has jurisdiction to adjudicate a refund claim premised on § 6015(f) relief is when “either spouse commences a refund suit [in a district court] implicating the same years involved in the innocent-spouse petition” appealed to the Tax Court. [Id. at p. 13]. In that specific instance alone, the “Tax Court shall yield jurisdiction over a timely filed petition for review of an IRS innocent-spouse relief determination to a district court.” [Id.].

The court rejects this argument finding that the statute does not state the Tax Court’s jurisdiction is exclusive and it cites to the Tax Court’s decision in the case of Coggin v. Commissioner, 157 T.C. 144, 151-53 (2021) which interpreted the meaning of 6015(e) and stated:

The text [of § 6015(e)(3)] is not explicit about the timing or sequence requirement (if any) as to a refund suit and filing of an innocent spouse relief claim in the Tax Court. Section 6015(e)(3) could be read to mean that this Court’s jurisdictional limitation applies only where a petition is filed before a refund claim. However, we do not interpret the statute as having such a requirement or as compelling us to give any weight to the sequence of Ms. Coggin’s actions with respect to her claims.

The DOJ Tax Division trial section then made a legislative history argument which the court also rejected but to which it devotes a fair amount of discussion.  The final argument centered on interest abatement cases where the Supreme Court, in Hinck v. United States, 550 U.S. 501 (2007) has held that the Tax Court has sole jurisdiction to hear these cases.  Because the IRS has discretion to abate interest, the argument sought to tie the discretionary relief in 6015(f) to the same result.  The court rejected this argument as well finding that the two provisions were distinct.

So, the case moves forward.  The innocent spouse claim under 6015(f) must still be won.  It would be interesting to be in the Room of Lies when/if the trial section seeks to convince the Appellate Section to appeal its position in a setting in which the Appellate Section tells circuit courts that taxpayers seeking innocent spouse relief can full pay and bring a refund suit.

Will the “Blogger Rule” Join the “Fatty Rule” as Litigation over IRC 6015(e)(7) Continues? (Part Two)

In Part One I introduced the pending case Thomas v. Commissioner, in which a taxpayer seeks to exclude some of her blog posts from evidence in her innocent spouse trial. She argues the blog posts must be excluded under 6015(e)(7) as they were public at the time of the administrative determination and so should not be considered “newly discovered” or “previously unavailable” to respondent.

Does “Newly Discovered” Imply Any Diligence Requirement?

As you’ll recall from Part One, Judge Toro set out nine questions for the parties to consider in their memoranda of law. Perhaps the most crucial question is this:

  1. Should Federal Rule of Civil Procedure 60(b)(2) inform our interpretation of the term “newly discovered evidence” in I.R.C. § 6015(e)(7)? That rule provides that “[o]n motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b). Fed. R. Civ. P. 60(b)(2) (emphasis added).

In her motion to strike, Ms. Thomas argues that applying the FRCP 60(b)(2) standard makes sense under Tax Court Rule 1(b) and Tax Court precedents applying the standard to Tax Court Rules 161 and 162. She notes:

Applying the ordinary meaning would set a very low bar in determining whether evidence is “newly discovered,” as it would allow Respondent to freely reopen the record and submit any evidence at trial just on a showing that it did not previously know about it without any consideration of Respondent’s attempt to obtain the evidence sooner. It is unlikely that this is what Congress intended when enacting the TFA.

Fed. R. Civ. P. 60(b)(2), in contrast, provides an administrable standard for admitting newly discovered evidence, by requiring a showing that the party seeking admission has exercised reasonable diligence.

In petitioner’s view, 6015(e)(7) would be meaningless if “materials which were publicly and freely available on the internet, and which Respondent could have easily located with a simple internet search, are ‘newly discovered evidence.’” She points out that the IRM permits CCISO to engage in internet research.

Respondent’s Objection to Motion to Strike, in contrast, argues that the plain language of the statute should control without any requirement of IRS diligence during the administrative proceeding. Respondent points out that a requesting spouse bears the burden to establish that they are entitled to relief, and that CCISO is not directed to thoroughly investigate each case before it: “It would be a waste of IRS resources to gather additional evidence to refute an inadequate claim…”

Petitioner states that respondent would have been able to find the blog by doing a simple internet search for petitioner’s name. Respondent should not have to do that because petitioner generally has the burden of proof at all stages of the request for relief and, to the extent important information is on a blog or elsewhere, petitioner ought forthrightly to provide the information as required by the Form 8857 she signed under penalties of perjury. The ease with which one may be able to find evidence does not matter when a party omits it…

…Exhibit 13-R, in its entirety, should be admitted into evidence as respondent did not become aware of petitioner’s blog until after the final administrative determination.

Concern for Moral Hazards versus Concern for Unsophisticated Taxpayers

The Objection also raises the danger that petitioners could potentially withhold information or documents from CCISO. If the government does not discover those items on its own, a petitioner could be rewarded for their malfeasance. In her reply, petitioner points out that there is no evidence the blog posts were deliberately withheld from CCISO.

as Petitioner explained during the trial, she did not view her blog, which was an attempt at self-branding and marketing, as relevant to her actual real world financial circumstances.

I cannot think of any client (or even any attorney) who would submit all potentially relevant documents to CCISO in the first instance. Innocent spouse cases (especially equitable relief cases) are fact-dense, and the universe of potentially relevant documents is enormous. Without the ability for some development of the case by exchanges of information and arguments on both sides, it is difficult to see how one could reach the right result on the merits of most equitable relief cases.

The clinics’ amicus brief urges the Court consider the realities of the administrative process and how self-represented taxpayers experience that process. Ms. Thomas likewise argues that

the Tax Court should take special care in determining what constitutes reasonable diligence in the innocent spouse context, particularly where the taxpayer is pro se and/or has suffered domestic abuse. …[T]he determination of whether the party seeking admission of the evidence exercised reasonable diligence should take into account the resources and wherewithal of that party. (Petitioner’s reply)

Respondent agrees that “the court should consider factors like who has knowledge of and control over the evidence and which party has the burden of proof.” But, Respondent also asks the Court to “consider the administrative burden of extensive research to try to capture evidence uniquely within petitioner’s control or that which petitioner willfully hides.” (Objection ¶42) And in response to petitioner’s reply, Respondent contends the requesting spouse actually has the upper hand before CCISO:

If anything, because the requesting spouse is the expert on their factual circumstances, respondent’s burden should be lighter unless the requesting spouse affirmatively discloses information during the administrative stage.

CCISO Engages in Limited Factfinding: On which side should that weigh?

Respondent’s filings and the amicus brief both point out the limitations of the current administrative process, but they draw very different conclusions. The amicus brief spends some paragraphs detailing the administrative process in the CCISO IRM, pointing out that it is not designed to generate a full factual record upon which the Tax Court can reach a de novo conclusion on the merits of the case. (A forthcoming Tax Lawyer article by Scott Schumacher argues that the administrative process is so flawed that CCISO does not reach the correct result except by accident.)

Respondent presents a similarly limited view of CCISO’s role, but for reasons of administrative efficiency and capacity as well as the burden of proof, the government would place all the onus on the requesting spouse to establish the administrative record. Respondent ties this to the “general requirement in administrative law to exhaust administrative remedies.” (Objection ¶ 11.) I find this an odd fit with 6015(e). Not only is there no requirement to request an administrative appeal before a court appeal (reflected in Respondent’s practice of sending docketed cases to Appeals for settlement consideration), a requesting spouse can file a petition before the IRS makes any determination at all. IRC 6015(e)(1)(A)(i)(II).

I found it interesting that in Respondent’s view, requiring a fuller investigation by CCISO would make the administrative process more adversarial. (Response to Reply ¶14, 15) Given that many requesting taxpayers are unrepresented and often face considerable barriers, it would be a terrible outcome for taxpayers if future CCISO technicians only investigated to uncover unfavorable or impeachment evidence. If the Court ultimately views 6015(e)(7) as incorporating a reasonable diligence requirement on the part of the agency, the IRS should consider other models of non-adversarial investigative processes, such as those employed for veterans benefit or Social Security disability claims. The Center for Taxpayer Rights’ Reimagining Tax Administration workshops, especially sessions 5, 6, and 7, provide much food for thought here.

A Note about The Role of Amicus Briefs

Responding to the amicus brief, Respondent commented that (in their view) the clinics’ amicus brief is counter to petitioner’s position. I disagree, but it is true that the amicus brief does not exactly track petitioner’s analysis.

One of the benefits of an amicus brief is that it can bring “to the attention of the Court relevant matter not already brought to its attention by the parties.” In the clinics’ view, this includes taking a broader perspective on the issues which may include analysis that is not identical to that of the petitioner, despite the amicus brief ultimately supporting petitioner.


Thomas raises thorny issues as everyone grapples with an unclear and ill-advised statute. The difficulties posed in applying 6015(e)(7) to the blogging taxpayer perhaps show why this is a highly unusual standard and scope of review in the administrative state. Innocent Spouse litigation may be very messy for many years to come.

If the “Fatty rule” holds, it will mitigate the harmful impact of the TFA on self-represented petitioners who are unlikely to build an adequate administrative record for judicial review. Here’s hoping that a future “blogger rule” does not have the opposite result. No matter how the case comes out, it will set important precedent on a novel question of law.

Will the “Blogger Rule” Join the “Fatty Rule” as Litigation over IRC 6015(e)(7) Continues? (Part One)

In Thomas v. Commissioner, Dkt. 12982-20, the interpretation of “newly discovered or previously unavailable evidence” in IRC 6015(e)(7) seems to be squarely before the Tax Court.

We have covered the Taxpayer First Act changes to the Tax Court’s innocent spouse jurisdiction in prior posts, such as my early post here. Most recently, Keith blogged the bench opinion in Bacigalupi v. Commissioner in which Judge Holmes followed the analysis he first adopted in Fatty v. Commissioner (blogged by Les here): since the IRS administrative process to adjudicate innocent spouse claims does not allow for sworn testimony or cross examination, witness testimony is “previously unavailable” and thus admissible evidence in a Tax Court trial. Judge Holmes was careful to note that in these nonprecedential orders he was not establishing a general rule for all future cases and that he might take a different view in the future. Nevertheless, the opinions show one potential approach to “previously unavailable” evidence.

The Thomas case presents an opportunity for the Tax Court to flesh out the other caveat in 6015(e)(7): “newly discovered” evidence. In Thomas, Respondent offered as trial exhibits several blog posts written by the petitioner Ms. Thomas, including some that were published before the final innocent spouse determination issued but which were not part of the administrative record. The Center for Taxpayer Rights, the Community Tax Law Project, and the Tax Clinics at Hastings and Villanova with my colleague Les Book together filed an amicus brief in the case flagging some broader concerns, including the inadequacy of the current administrative process in building a record for de novo review, particularly as to claimants navigating the impacts of domestic violence and other barriers.


Thomas v. Commissioner and Initial Evidentiary Issues Presented

Ms. Thomas and her husband were going through financial and marital difficulties when he passed away unexpectedly. Ms. Thomas then requested relief from joint underpayments, offering (among other reasons) that her husband was abusive and that she could not afford to pay the debts. Before her husband’s death, Ms. Thomas had started a new business targeting a well-heeled clientele and she wrote a blog to promote that business. Ms. Thomas continued to post on her blog while her innocent spouse claim was pending. In Respondent’s view, the blog posts show a very different lifestyle than the picture Ms. Thomas painted for CCISO.

The IRS, though CCISO, denied Ms. Thomas’s claim on September 8, 2020. (The record does not reveal why Ms. Thomas did not appeal the preliminary determination.) Ms. Thomas appealed CCISO’s denial to the Tax Court, and she represented herself at trial on April 4, 2022. At trial both parties sought to introduce new documents that weren’t part of the administrative record, and respondent also raised hearsay and relevance objections to some documents in the record.

Judge Toro took the objections under advisement, and on April 26 issued an order discussing IRC 6015(e)(7) and the eight challenged trial exhibits. Here is a modified version of the table that appears in the order:

Exhibit NumberDescriptionObjection (P or R)Included in the Administrative Record?
Exhibit 6-J, p. 10-14 Exhibit 29-PLetters of supportHearsay (R)Yes
Exhibit 6-J, p. 15-18Real estate recordsRelevance (R)Yes
Exhibit 6-J, p. 29Employment ContractRelevance (R)Yes
Exhibit 13-RBlog postsI.R.C. § 6015(e)(7) (P)No
Exhibit 31-PBankruptcy Court filingsI.R.C. § 6015(e)(7) (R)No
Exhibit 32-PNews articleHearsay; Relevance (R)No
Exhibit 33-PLand Rover invoiceRelevance (R)No

After setting out some preliminary considerations, Judge Toro determined that “it would advance the orderly resolution of this case to treat each of the exhibits listed above as admitted in full.” However, the Court invited either party to file a motion to strike, and further noted that if such a motion was filed, the Court would entertain a motion for leave to file an amicus brief “in support or opposition.”

Respondent declined this invitation, but petitioner filed a motion to strike part of Exhibit 13-R: the blog posts that were published before the September 2020 determination. As noted above, an amicus brief (to which Les and I contributed) was filed in support of petitioner. Respondent filed an objection to the motion, to which petitioner replied, as well as a response to the amicus brief and a response to petitioner’s reply.

While only Ms. Thomas’s pre-determination blog posts remain at issue, practitioners may want to take note of the items that Respondent initially challenged and prepare to litigate these issues if necessary in other cases. To the government’s credit, here it did not maintain its initial relevance or hearsay objections to documents found in the administrative record.

Kudos to the Court for soliciting amicus briefs on this novel issue, and for encouraging the petitioner to seek counsel. Ms. Thomas is now represented pro bono by Megan Brackney of Kostelanetz & Fink.

The Blogger Problem

Judge Toro’s order identifies many questions raised by the blog posts:

  1. Are the blog posts newly discovered or previously unavailable evidence?
  2. In making that determination, what is the importance (if any) of the fact that some of the blog posts were publicly available via Internet search during the IRS innocent spouse administrative proceeding?
  3. If the Commissioner did not “discover” the blog posts until after the administrative proceeding was complete, is that sufficient to allow the blog posts into evidence at trial?
  4. Should the phrase given its ordinary meaning (e.g., evidence that was not “found out” before a relevant time) or should it be viewed as a term of art? […]
  5. If the phrase is viewed as a term of art, is its meaning different from the ordinary meaning of the phrase?
  6. Should Federal Rule of Civil Procedure 60(b)(2) inform our interpretation of the term “newly discovered evidence” in I.R.C. § 6015(e)(7)? That rule provides that “[o]n motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b). Fed. R. Civ. P. 60(b)(2) (emphasis added).
  7. If Federal Rule of Civil Procedure 60(b)(2) should inform our interpretation of the term “newly discovered evidence” in I.R.C. § 6015(e)(7), what is the import of the qualifying language used in that rule and italicized above?
  8. Relatedly, should this Court’s interpretation of the term “newly discovered evidence” in other contexts inform our interpretation of the same term in I.R.C. § 6015(e)(7)? See, e.g. Estate of Quick v. Commissioner, 110 T.C. 440, 441 (1998) (applying the term “newly discovered evidence” in the context of a motion to reconsider pursuant to Rule 161, Tax Court Rules of Practice and Procedure); Fairmont Aluminum Co. v. Commissioner, 22 T.C. 1377, 1383 84 (1954) (same, regarding a motion for new trial pursuant to Rule 162, Tax Court Rules of Practice and Procedure); Rule 1(b), Tax Court Rules of Practice and procedure, the Court . . . may prescribe the procedure, giving particular weight to the Federal Rules of Civil Procedure to the extent that they are suitably adaptable to govern the matter at hand.”).
  9. Does the “newly discovered evidence” standard mean that the same evidence could be admissible if offered by one party but inadmissible if offered by the other? For example, might the older blog posts be admissible if the Commissioner offers them (because they existed at the time of the administrative proceeding but were then unknown to (or had not been “found out” by) the Commissioner), but not if the petitioner offers them (because she knew of them at the time of the administrative proceeding)? And if the one party is allowed to offer “newly discovered evidence,” how can the other party rebut that evidence in a manner consistent with I.R.C. § 6015(e)(7)?

The parties’ answers to these questions reflect very different visions for the future of innocent spouse cases under the TFA. In Part Two, we’ll examine the arguments raised.

Innocent Spouse Bench Opinion – Part 2

In Part 1 of this post, I noted that Judge Holmes issued a bench opinion in the case of Bacigalupi v. Commissioner, Dk. No. 20480-21.  I also noted that the bench opinion itself caught my eye because of the handwritten edits on the opinion.  Between the time the judge read the opinion into the record prior to the close of the trial calendar in San Francisco on September 19, 2022, and the entering of the order making the bench opinion public in written form, the judge made the type of editorial corrections one expects occurs in the writing of any opinion but which we do not have the opportunity to view.  The opinion made me start thinking about bench opinions again.  Since we have not posted about them for some time I wanted to separately address that aspect of this case.


We have written about the process of bench opinions here and their non-precedential effect here.  Building on the blog post about this process, I wrote a longer article on bench opinions published in the Journal of Tax Practice and Procedure in 2015 available here. I have not done the work to count the number of bench opinions issued by the Court since 2015 to see if the practice has changed at all in the past several years.

The rules generally make it tough for the judges to issue bench opinions because they must do so within a very short time frame.  These opinions get their name from the fact that the judge issuing such an opinion literally sits on the bench and reads the opinion into the record.  In many instances the judge does so to a courtroom populated only by the trial clerk and the court reporter.  Some judges reach out to the parties before reading the opinion causing one or both of the parties to attend the reading.

This process has been around for 40 years.  Code Sec. 7459 provides in part:

(a) Requirement. —A report upon any proceeding instituted before the Tax Court and a decision thereon shall be made as quickly as practicable. The decision shall be made by a judge, in accordance with the report of the Tax Court, and such decision so made shall, when entered, be the decision of the Tax Court.
(b) Inclusion of findings of fact or opinions in report.—It shall be the duty of the Tax Court and of each division to include in its report upon any proceeding its findings of fact or opinion or memorandum opinion. The Tax Court shall report in writing all its findings of fact, opinions, and memorandum opinions. Subject to such conditions as the Tax Court may, by rule provide, the requirements of this subsection and of section 7460 are met if findings of fact or opinion are stated orally and recorded in the transcript of the proceedings.

The last sentence of subsection (b) provides the foundation for bench opinions and limits the ability of the court to make oral findings both on rules the Tax Court might adopt and on Code Sec. 7460. The language in the last sentence of subsection (b) concerning oral findings was enacted in 1982.

Tax Court Rule 152, entitled Oral Findings of Fact or Opinion, provides the “rule” governing bench opinions. It states:

(a) General. Except in actions for declaratory judgment or for disclosure (see Titles XXI and XXII), the Judge, or the Special Trial Judge in any case in which the Special Trial Judge is authorized to make the decision of the Court pursuant to Code section 7436(c) or 7443A(b)(2) , (3), (4), or (5), and (c), may, in the exercise of discretion, orally state the findings of fact or opinion if the Judge or Special Trial Judge is satisfied as to the factual conclusions to be reached in the case and that the law to be applied thereto is clear.

(b) Transcript. Oral findings of fact or opinion shall be recorded in the transcript of the hearing or trial. The pages of the transcript that contain such findings of fact or opinion (or a written summary thereof) shall be served by the Clerk upon all parties.

(c) Nonprecedential Effect. Opinions stated orally in accordance with paragraph (a) of this Rule shall not be relied upon as precedent, except as may be relevant for purposes of establishing the law of the case, res judicata, collateral estoppel, or other similar doctrine.

The requirement that the judge issue the bench opinion before the end of the trial session giving rise to the bench opinion appears to stem from the implicit requirement in Rule 152(b) relating to the recording of the bench opinion in the transcript of the hearing or trial.  The Court views the hearing or trial concluded when the trial session ends although it is possible to hold a case open past the trial session under certain circumstances.  Holding the trial session open does not appear to apply to issuing bench opinions under the current interpretation of the Rule.

One of the reasons for the creation of the Tax Court was the desire to create a uniform body of federal tax decisional law.  Bench opinions do not go through the same review process in the Chief Judge’s office prior to issuance that other Tax Court opinions do.  The review process seeks to make the decisions uniform as well as to decide which opinions should be issued as precedential.  The goal of uniformity must be considered alongside the goal of rendering the opinions as quickly as possible. 

As discussed in our recent editorial on the speed of Tax Court opinions, I think that Tax Court decision process should speed up.  I am not convinced that uniformity would necessarily suffer from greater speed but acknowledge it as a concern.  The economic hardship aspect of the Bacigalupi shows what appears to be a lack of uniformity in the Tax Court on this issue whether the opinion is reviewed or not.


In order to speed up outcomes in Tax Court cases one way would be to increase the number of bench opinions.  One way to increase that number would be to make it easier for the judges to render such opinions by allowing them to hold open the record of the case for a brief period of time after the trial calendar.  As the Court looks for ways to perhaps move cases more quickly, it might look at the bench opinion process as one opportunity for accomplishing that goal.

Innocent Spouse Bench Opinion – Part 1

On September 19, 2022, Judge Holmes entered a bench opinion in Bacigalupi v. Commissioner, Dk. No. 20480-21 making it public in an order dated October 27, 2022.  The opinion was not extraordinary though I will discuss its take on the administrative record rule and the hardship factor for equitable relief.  Bench opinions generally are also not extraordinary though I will discuss them as well.  I will discuss them in part 2 of this post. What struck me the most about this bench opinion was the handwritten edits by Judge Holmes in the bench opinion.  I do not read all bench opinions but I thought I had read enough to make me feel that the handwritten edits to the opinion were somewhat unusual but maybe they are not. 

The edits did not bother me.  I applaud Judge Holmes for writing a bench opinion.  The trial of the case apparently took place on September 16 three days before he issued the bench opinion.  This is the second time we have blogged about an innocent spouse bench opinion of his.  As I will discuss in more detail below, the rules of the Tax Court require that judges issue the bench opinion before the gavel came down to close the end of the trial session.  This trial session was in San Francisco.  I don’t know how many trials he had during the session that week which is certainly a factor in a Tax Court judge’s ability to render a bench opinion.


The Case

Ms. Bacigalupi proceeded pro se.  The 19-page bench opinion, which is really a 19-page transcript of the judge’s oral reading of the opinion into the record, recites some of the factual background of the case before coming to the first important legal question – the scope of review.  Judge Holmes acknowledges the standard for scope of review now in place which calls for the Court to look at the administrative record.  We have discussed this in several posts, and you can read a couple of our discussions of the issue here and here (where Les discusses the non-precedential Fatty rule created by an earlier Judge Holmes bench opinion in an innocent spouse case.)  The scope of review provides for two exceptions to the administrative record review where there is newly discovered or previously unavailable evidence. 

Judge Holmes, following the Fatty rule, decides that the petitioner’s testimony under oath is newly discovered evidence since she could not have given sworn testimony or be cross-examined when she applied for innocent spouse relief.  I like that approach though it’s clear that Judge Holmes still has some concerns about it as he noted again that he is not deciding such testimony meets the exception for all cases in the future.  Since bench opinions are not precedential, this aspect of the case does not make new law even if it provides some sanity to the situation facing pro se taxpayers who will almost never have developed a robust administrative record.

He then looks to see if Ms. Bacigalupi qualifies for streamlined relief under the applicable Revenue Procedure whose factors do not necessarily control the Court’s decision but generally seem to guide it.  He decides she does not qualify for streamlined relief because the joint returns were not filed until after receipt of a notice of intent to levy.  This makes clear she had knowledge of the underpayment and that knocks her out of streamlined relief.  The fact that this is an underpayment case knocks her out of IRC 6015(b) and (c) relief moving the case on to potential equitable relief under 6015(f). 

Because she fails the knowledge factor, you might remember from our earlier posts on this subject, here and here, that the Tax Court almost always (maybe always) denies relief where the person seeking relief has knowledge unless that person has financial hardship.  This case falls into that pattern.  Judge Holmes finds Ms. Bacigalupi meets the economic hardship test even though she has assets worth approximately $150,000.  She owes over $300,000 so he concludes paying the liability would create hardship given her meager (he calculates less than $200) monthly income available to pay the debt.  The facts are not straight forward because of her divorce arrangement but the conclusion makes sense.  He cites to Leith v. Commissioner, TC Memo 2020-149, discussed here, in support of his conclusion to compare the value of her assets to the total amount of the debt. Ms. Leith had assets of approximately $5,000, mostly in a retirement account, and liabilities over $30,000.

As I mentioned in a post about Pocock v. Commissioner, T.C. Memo 2022-55, the conclusion there, and here (as well as in Leith), seems directly at odds with the approach of the Tax Court taken in Sleeth v. Commissioner, TC Memo 2019-138, aff’d, — (11th Cir. 2021) where the requesting spouse had almost no income, assets of about $150,000 and debts of over $500,000.  I discuss the Sleeth case here.  The Tax Clinic at the Legal Services Center of Harvard Law School took on an appeal of that case seeking, inter alia, to convince the 11th Circuit that she met the hardship criteria but the Circuit court found the arguments did not overcome the decision of the Tax Court.  The hardship issue is critical to success in the Tax Court in an innocent spouse case where the requesting spouse fails the knowledge test.  Judge Holmes’ approach to the hardship question here, as well as the approach taken by the Tax Court in Leith and Pocock, makes sense but does not seem to have uniform acceptance at the Court.

Judge Holmes found three of the Revenue Procedure’s factors in petitioner’s  favor and only the knowledge factor against.  He leaned heavily on the additional fact that the non-requesting spouse hid his income from petitioner over a period of many years in deciding for her in what he describes as “a very close call.”

DOJ Apologizes for Misinforming District Court on IRC 6015(f) Deadline

I did a post on August 15 in which I expressed shock that the DOJ lawyers in a district court collection suit told the court that the taxpayer could no longer seek IRC 6015(f) relief, since a two-year period to ask for such relief had passed.  The DOJ had cited a regulation that is no longer effective after a 2019 statutory amendment allowing a taxpayer to seek (f) relief at any time while the collection statute of limitations is still open, as it is in the case before the court.  This is a short post, just to let everyone know that on August 17, the United States filed a document in the district court entitled “United States’ Notice of Errata to United States’ Memorandum in Support of Motion for Partial Summary Judgment.”

The operative language from the notice is as follows:

[T]he United States . . .  argued that to qualify for relief under § 6015, a taxpayer must first present an administrative claim to the IRS within two years of the date on which the IRS first began collection activity against the taxpayer claiming innocent spouse relief. While innocent spouse relief under 26 U.S.C. § 6015(b) and (c) is limited by a two-year statute of limitations, the United States erroneously asserted that the same statute of limitations also applies to innocent spouse relief sought under 26 U.S.C. § 6015(f). Although Mrs. Weathers remains time barred from seeking innocent spouse relief under 26 U.S.C. § 6015(b) and (c), she could seek relief under 26 U.S.C. § 6015(f) before the IRS. This does not impact the Court’s lack of subject matter jurisdiction, as Mrs. Weathers would still have to avail herself of the administrative processes before the IRS to seek this relief and, if necessary, follow procedures for review established in 26 U.S.C. § 6015(e).

We just understood our error and respectfully alert the Court and parties through this errata filing. As stated, however, our inadvertent error does not impact the Court’s memorandum opinion and Order, which properly dismissed the asserted affirmative defense for lack of subject matter jurisdiction.

Undersigned counsel apologizes to the Court for the mistake.

The case was headed for a jury trial beginning August 22.  However, there is an entry on the docket sheet that the case settled on August 18.  There is no entry (yet?) correcting the district court’s order, though.