Wilson v. Commissioner
2013 U.S. App. LEXIS 947
9th Cir.2013Background
- Congress codified innocent spouse relief in 26 U.S.C. §6015 with B/C (understatement/deficiency) and F (equitable relief) provisions and later clarified Tax Court jurisdiction under §6015(e).
- petitioner Karen Wilson sought equitable relief under §6015(f) after her husband’s Ponzi-based income led to a $540,000 tax liability and years of offshore income undisclosed on joint returns.
- Wilson, initially unaware of her husband’s scheme, had limited access to records and ultimately finalized a divorce in 2007, while the administrative process denied relief in 2004.
- The IRS CCCISO center processed innocent spouse claims; after screening and examination, Wilson’s case progressed to Appeals, which denied relief in 2004.
- Wilson submitted new evidence to the Tax Court (post-2005) including financial details and divorce finalization, prompting the Tax Court to reopen the record in 2008.
- The Tax Court held in favor of Wilson on de novo review, expanding the evidentiary record beyond the administrative record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether new evidence may be considered beyond the administrative record | Wilson contends new evidence should be permissible to fully determine relief. | IRS argues review should be confined to the administrative record (abuse of discretion). | Yes; Tax Court may consider new evidence de novo. |
| What standard of review applies to §6015(f) determinations | Tax Court should review de novo with a de novo standard. | Review should be abuse of discretion under APA. | De novo standard of review applies. |
| Whether APA applies to Tax Court review of §6015(f) denials | APA applies to govern review of agency actions. | APA does not apply to innocent-spouse proceedings. | APA does not apply; statute governs, yet Tax Court uses de novo determination. |
| Interpretation of §6015(e)’s language to determine relief | The word 'determine' implies de novo determination of relief. | The term is ambiguous and not plainly de novo; context matters. | Text is ambiguous; the statute supports de novo scope and standard in this context. |
Key Cases Cited
- Comm’r v. Neal, 557 F.3d 1262 (9th Cir. 2009) (supports de novo review in §6015(f) contexts)
- Porter v. Comm’r (Porter II), 132 T.C. 203 (11th Cir./Tax Ct. 2009) (de novo scope and standard in §6015(f) cases)
- Ewing v. Comm’r (Ewing II), 122 T.C. 32 (2004) (trial de novo and APA record rule; later superseded by statute)
- Robinette v. Comm'r, 439 F.3d 455 (8th Cir. 2006) (APAs applicability to §6330 collection due process reviews)
- Dickinson v. Zurko, 527 U.S. 150 (1999) (APA governs reviewing courts absent explicit statutory exceptions)
- Friday v. Comm’r, 124 T.C. 220 (2005) (remand and record-supplementation considerations in §6015(f) context)