Section of Taxation Publications
  VOL. 60
NO. 3

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Note: The following is an excerpt from the introduction to the article as published in The Tax Lawyer. Author citations have been omitted for brevity. Tax Section members may read the article in its entirety in Adobe Acrobat format.

Tax Court Jurisdiction in Innocent Spouse Equitable Relief Cases:
Billings v. Commissioner
Mindy Wu


In 2006, the Tax Court reversed its position on whether it has jurisdiction over taxpayer innocent spouse petitions for equitable relief in nondeficiency cases. In Billings v. Commissioner, the Tax Court held that it does not have jurisdiction to review the Service’s denials of innocent spouse requests for equitable relief in nondeficiency cases. This holding overturned the court’s prior decision in Ewing v. Commissioner that individuals could petition the Tax Court to determine appropriate equitable relief under the 2001 version of section 6015(e), for any unpaid tax or deficiency, even in nondeficiency cases. The result in Billings I was that the Tax Court declined to overturn the Commissioner’s denial of petitioner David Billings’ request for relief from joint liability. However, the Tax Court could still review innocent spouse relief cases in which the Service has asserted a deficiency.

The taxpayer appealed to the Tenth Circuit. While the appeal was pending, in response to the Billings I decision, Congress amended section 6015 to grant specific Tax Court jurisdiction over cases like that of David Billings. The change was effective for all section 6015(e) cases with respect to liability for taxes arising or remaining unpaid on or after the date of the amendment. With the new legislation in hand, the Tenth Circuit remanded the case for reconsideration. The Tax Court determined that, under the new law, it had jurisdiction over the matter and reversed as an abuse of discretion the Commissioner’s denial of Billings’ petition for relief.

In arriving at its decision in Billings I, the Tax Court interpreted the 2001 version of section 6015 to require the Service to assert a deficiency against the taxpayer before the Tax Court has jurisdiction over a petition for equitable relief. This Note argues that the court erred in reaching this conclusion, and that it had jurisdiction even without the legislative change that clarified Congress’s intent to confer jurisdiction on the Tax Court. Neither the statute nor its legislative history stated any such assertion requirement, and the court itself noted that the effect of interpreting the Code in this way was “anomalous.”

The Billings I court, as well as the Eighth and Ninth Circuits, improperly differentiated between innocent spouses against whom the Service has asserted a deficiency and those against whom the Service has not asserted a deficiency. In doing so, the Billings I court incorrectly interpreted section 6015(e) as barring review by the Tax Court of equitable relief petitions in which the Commissioner failed to determine a deficiency. Part I of this Note presents the facts of David Billings’ filing for innocent spouse relief and the Commissioner’s ensuing denial of that relief. Part II examines the statutory history of the Tax Court’s jurisdiction over innocent spouse relief cases. Part III reviews the Tax Court’s explanation in Billings I of its lack of statutory jurisdiction in innocent spouse requests for equitable relief. Part IV outlines the subsequent legislative changes and procedural history of the case. Part V analyzes the accuracy of the Billings I majority’s textual construction of the 2001 version of the innocent spouse relief statute. Part IV also interprets the statute in light of its legislative history and discusses the problems with the Billings I interpretation, given congressional purpose.


Published by
Section of Taxation, American Bar Association
With the Assistance of
Georgetown University Law Center


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