Case of First Impression: Community Property Law & Refunds


A

Alan

U.S. 9th Circuit Court of Appeals, July 24, 2008
Ordlock v. Comm'r of Internal Revenue, No. 06-74539
A tax court's determination that wife is ineligible for a refund
under 26 U.S.C. section 6015 for payments on her husband's tax
debt paid from their community property is affirmed, as nothing
in section 6015 clearly preempts California community property
law with respect to an innocent spouse's entitlement to a refund
for a community property payment on the non-innocent spouse's
federal income tax liability.

Via Findlaw: http://caselaw.findlaw.com/data2/circs/9th/0674539P.pdf

Via 9th Circuit:
http://www.ca9.uscourts.gov/ca9/newopinions.nsf/E8432EF655C417708825748F007CDF30/$file/0674539.pdf
 
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A

Alan

Stuart said:
Interesting case - not the typical innocent spouse situation. I'm not
surprised by the outcome. In addition to the legal arguments, it just
doesn't "smell" right.

But I wonder how a marital property agreement would affect this kind of
case, since California law allows couples to agree that their property
will be separate instead of community.

Stu
I'm not a lawyer.. but as CA law allows for pre and post marital
agreements, I would think that the document would be construed to
be state law and would determine the outcome under the conditions
outlined in the case.
 

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