Hockin v. United States, ___ F. Supp. ___, 2019 WL 3845380 (D. Or. 2019)
(a) Facts: Husband and wife married in 1997. The IRS received from the parties’ joint tax returns for tax year 2007 and 2008. Tax was due for both years.
The wife made several payments then sought innocent spouse relief, including a refund. The IRS granted relief from 2008 on the ground that the wife’s signature on the 2008 return was a forgery. The IRS denied relief for 2007.
The wife filed a suit in the federal District Court seeking a refund of her 2007 payments and discretionary innocent spouse relief. The IRS moved to dismiss for lack of jurisdiction.
(b) Issue: Did the District Court have jurisdiction over the case?
(c) Answer to Issue: Yes.
(d) Summary of Rationale: Federal District Courts have jurisdiction over all actions to collect refunds from the government, including refunds of taxes paid. Thus, when a deficiency is assessed, a taxpayer can either (1) refuse to pay and directly question the deficiency in the Tax Court, or (2) pay the deficiency and seek a refund in District Court.
The District Court clearly had jurisdiction over the wife’s request for a refund because her signature was also forged on the 2007 return.
The IRS argued that the District Court lacks jurisdiction over innocent spouse issues. But the District Court lacks jurisdiction only over “stand alone” claims with no refund requested. Those must be made in the Tax Court. But when the taxpayer properly requests a refund in District Court, the District Court may hear a related claim for innocent spouse relief.
Summary: Innocent spouse issues generally go to the Tax Court. But to obtain a refund of amounts already paid, you may file in District Court.