Tax Court Lacks Jurisdiction in Innocent Spouse Case Pending Before District Court

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In Coggin v. Commissioner, 157 T.C. No. 12 (2021) the Tax Court issued a precedential opinion interpreting IRC 6015(e)(3) regarding its jurisdiction to hear an innocent spouse case when a district court simultaneously has the same issues pending before it.  In her pleadings in district court Ms. Coggin sought a determination that she did not sign the joint returns with her husband.  This issue, while a prelude to a claim for innocent spouse status if unsuccessful, does raise a different legal argument than innocent spouse.  Because of the relationship between the two arguments, the IRS handles both at its Covington Service Center where it houses the innocent spouse unit.  The same employees who decide innocent spouse status also decides whether a joint return exists. 

This fact pattern will not occur with frequency, perhaps explaining why a precedential opinion first comes out almost a quarter century after passage of the legislation, but despite the unusual nature of the procedural posture the case highlights some issues that innocent spouse and joint return cases present.

Caught up in this case and addressed, though not decided, by the Tax Court is the issue of the jurisdiction of district courts to decide innocent spouse relief.  This is an issue that seems to split the Department of Justice Tax Division where the trial section argues the district courts lack jurisdiction while the appellate section argues the district court have jurisdiction.  We have discussed this quandary previously here chastising the Tax Division for arguing out of both sides of its mouth.  Perhaps the Coggin case will provide more clarity regarding the Tax Division’s view of the law but that will come at a later stage of this proceeding.


Ms. Coggin received the revelation that no spouse wants to receive, i.e., that her name was on several joint returns for which substantial tax liabilities existed.  She learned this just a few weeks prior to her husband’s death.  She took the position that she did not sign the joint returns and that joint liability should not attach.  In support of her position she filed married filing separate returns for the years at issue. We don’t get the full picture of the IRS response to her argument that she did not participate in the joint return; however, the IRS did not accept that position or this case would not exist.  Arguing against the treatment of the returns as joint implicates the issue of tacit consent on which we have a blog post coming in the near future.  Individuals like Ms. Coggin who have a tax filing responsibility and who do not file a separate return at the filing date face a particularly difficult time arguing that they did not intend to participate in the joint return; a difficulty that becomes more pronounced if they have filed jointly in the past.  This case does not get into the tacit consent issue, but it lurks in the background.

Because the IRS declined to accept her argument that she did not file a joint return, it did not accept the subsequently filed married filing separate returns on which she claimed refunds.  Instead, it sent to her notices of claim disallowance for 2007 (in February 2014) and for 2003 and 2004 ((in March 2017.)  In February 2016 she filed a refund suit which was amended a couple times and ultimately included 2001-2007.  In this suit she does not argue innocent spouse status but focuses on the joint return issue.

The IRS counterclaimed to reduce her liabilities to judgment opening the possibility of a very long time for the IRS to collect as discussed here.  Such a counterclaim would be standard practice since the facts needed to support the counterclaim usually mirror the facts necessary to defend against the refund claim.  For the same amount of work, the IRS obtains the benefit of a judgment.  This is a downside of bringing certain refund suits and something to consider in choice of forum.  A Tax Court opinion does not result in a judgment making it perhaps a more favorable forum if available and if the downside of a judgment exists.  In this case the counterclaim resulted in more work for the IRS since the court granted summary judgment finding that Mr. and Ms. Coggin filed joint returns but setting the counterclaim for trial on the issue of whether the innocent spouse provisions could relieve her from liability.

She then submitted Form 8857 on October 19, 2018, to the IRS requesting innocent spouse relief and requested that the district court stay the proceeding until the IRS had time to consider her request.  The district court granted her request stating:

[T]he Court finds first that a stay is warranted under 26 USC § 6015(e)(1)(B), which provides that no proceeding in court shall be prosecuted against an individual requesting relief under § 6015(b), (c), or (f). Defendant’s counterclaims are now being prosecuted in this Court, and the United States has not presented any case or analysis to show that § 6015(e)(1)(B) would not apply here. Moreover, even if that provision did not specifically apply here, the Court finds that * * * its equitable authority should be exercised to stay this proceeding while the Innocent Spouse defense is litigated. * * *

* * * [T]his case will be stayed pending resolution of Ms. Coggin’s Innocent Spouse defense through the administrative process. The stay will remain in place in this proceeding until it is lifted by further order of the Court. Because this case is being stayed to allow that matter to proceed administratively, any litigation freeze with the IRS should be lifted, and the administrative proceeding should be reopened to allow that Innocent Spouse defense to be processed. * * *

On December 6, 2019, Ms. Coggin filed a Tax Court petition seeking review of the administrative denial of her innocent spouse relief.  At the time of filing this petition, Ms. Coggin’s refund claims and the IRS counterclaim for 2002-2009 remained pending before the district court.  The IRS filed a motion to dismiss the Tax Court case for lack of jurisdiction based on section 6015(e)(3) which provides:

(3) Limitation on Tax Court jurisdiction. — If a suit for refund is begun by either individual filing the joint return pursuant to section 6532

(A) the Tax Court shall lose jurisdiction of the individual’s action under this section to whatever extent jurisdiction is acquired by the district court or the United States Court of Federal Claims over the taxable years that are the subject of the suit for refund, and

(B) the court acquiring jurisdiction shall have jurisdiction over the petition filed under this subsection.

In addressing the issue of its jurisdiction in this case, the Tax Court has some nice language for parties seeking to raise innocent spouse relief in a district court proceeding.  It states:

Two additional provisions in section 6015 indicate that innocent spouse claims may be brought in a legal forum other than the Tax Court. First, the text “any other remedy provided by law” found in section 6015(e)(1)(A) indicates that there are other instances in which innocent spouse relief may be sought. Second, section 6015(g)(2) provides an exception to the general rule of res judicata and in so doing indicates that an innocent spouse claim may be “an issue in” a prior proceeding:

The court notes that district courts have split on whether they have jurisdiction to hear innocent spouse cases citing the prior decisions on this point which we have discussed previously.  The Tax Court finds that it loses jurisdiction where the district court has jurisdiction over the same years.  Even though she could normally come to the Tax Court after denial of her innocent spouse request (or the passage of six months without action), she cannot do so in a situation in which the same tax years are pending before a district court.

In two of the years for which she sought innocent spouse relief in the Tax Court, the district court did not have jurisdiction.  For those two years the Tax Court denied the IRS motion to dismiss.  This leaves her with innocent spouse/joint return consent issues pending in both courts for different years.  It seems likely that the district court might decide the years before it first but that is not a certainty.

The decision here is in line with the statute.  She has not lost her ability to argue in court about her innocent spouse status but only lost the ability to move the entire case over to the Tax Court once it began in the district court and remained there unresolved.  This is not a common fact pattern but does serve as a reminder of one of the limitations on forum shopping – seeking to have the same issue move forward in two different courts at the same time.  On December 14, 2021, the Tax Court issued an order requiring the parties to file a status report and notify the Court of the issues for trial and a proposed schedule.


  1. Doesn’t the implied consent theory of the spouses signature violate the Signature requirement of the IRM and Code Sections 6061 and Code Section 6065 which states “any return statement or other documents required to be made under any provision of the internal revenue laws or regulations shall be signed in accordance with forms of regulations prescribed by the secretary.”

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