Court grants innocent spouse relief after IRS fails to prove actual knowledge of disallowed deduction
Trisha Anderson v. Commissioner. United States Tax Court. T.C. Summary Opinion. Filed July 22, 2026.
A divorced spouse may qualify for innocent spouse relief if the IRS cannot show she knew the facts that made a deduction improper, even if she signed the joint return.
Holding
The Tax Court decided that Trisha Anderson qualified for innocent spouse relief under IRC section 6015(c). The IRS could not prove she knew the facts behind the disallowed mortgage interest deduction, so her former husband was assigned the entire deficiency.
Why It Matters
This decision reinforces that the IRS bears the burden of proving a requesting spouse had actual knowledge of the item causing the deficiency under section 6015(c).
The case distinguishes knowledge that a transaction occurred from knowledge that a tax deduction was legally unsupported.
It shows that deficiencies arising from a failure to substantiate a deduction are treated differently from deficiencies caused by knowingly claiming an improper deduction.
The opinion also demonstrates that allocation under section 6015(c) is determined without applying community property rules, even when the taxpayers lived in California.
Key Facts
Trisha Anderson and her husband filed a joint federal income tax return for 2016.
Her husband earned all of the couple’s income and managed the family’s finances, including preparing and filing their tax returns.
The couple sold their home in 2016 after placing it into a family trust.
Their joint return claimed approximately $108,220 of mortgage interest.
During an audit, the IRS disallowed the deduction because the taxpayers failed to establish that the claimed interest was deductible and paid.
The notice of deficiency was mailed only to Mr. Anderson. Ms. Anderson never received it.
The couple divorced in 2021, and their divorce agreement required Mr. Anderson to pay the 2016 federal tax liability.
Ms. Anderson requested innocent spouse relief in 2023 after the IRS began collection efforts.
Statutory Framework
IRC section 6015 provides three avenues for relief from joint and several liability on a joint return.
Section 6015(c) allows a divorced or separated spouse to allocate a deficiency between the spouses as if they had filed separate returns.
Relief is unavailable if the IRS proves the requesting spouse had actual knowledge, meaning knowledge of the facts that made the deduction improper, not merely knowledge that the underlying transaction occurred.
Arguments
Taxpayer argued:
She had no involvement in managing the family’s finances.
She believed the mortgage interest had been paid.
She did not receive the notice of deficiency.
The deficiency resulted from her former husband’s handling of the audit, not from any knowing misconduct on her part.
Government argued:
Ms. Anderson had actual knowledge of the item giving rise to the deficiency.
Because she knew about the mortgage interest deduction, she should remain jointly liable for the resulting tax.
Court’s Reasoning
The IRS had the burden of proving actual knowledge by a preponderance of the evidence.
The evidence showed the mortgage interest was in fact paid through the home sale, as reflected on the settlement statement.
The deficiency appeared to result because Mr. Anderson failed to substantiate the deduction during the audit rather than because the interest had not been paid.
Knowing that mortgage interest existed is not the same as knowing the deduction would ultimately be disallowed.
Ms. Anderson credibly testified that she believed the interest had been paid.
The Court found no evidence that she knew the deduction lacked adequate substantiation.
Because only Mr. Anderson was liable on the mortgages and managed the financial affairs, the deduction would have belonged entirely to him if separate returns had been filed.
As a result, the entire deficiency was allocated to Mr. Anderson, leaving Ms. Anderson fully relieved of liability.
Result
The Tax Court granted Ms. Anderson innocent spouse relief under IRC section 6015(c) and relieved her of the entire 2016 deficiency.
The Takeaway
This case applies existing innocent spouse rules rather than changing the law. It confirms that the IRS must prove a spouse actually knew the facts that made a deduction improper, not just that the spouse knew about the transaction. It also shows that if one spouse handled the finances and the other was not involved, a lack of audit proof may support relief.
List of Citations
IRC § 6015(c), governing allocation of joint liabilities between divorced or separated spouses.
IRC § 6015(e), granting Tax Court jurisdiction over innocent spouse determinations.
Thomas v. Commissioner, 162 T.C. 9 (2024), addressing the Tax Court’s standard and scope of review in innocent spouse cases.
Porter v. Commissioner, 132 T.C. 203 (2009), discussing de novo review under section 6015.
Cheshire v. Commissioner, 115 T.C. 183 (2000), aff’d, 282 F.3d 326 (5th Cir. 2002), explaining actual knowledge under innocent spouse provisions.
Culver v. Commissioner, 116 T.C. 189 (2001), confirming the IRS bears the burden of proving actual knowledge.
Treas. Reg. § 1.6015-3, defining actual knowledge for purposes of section 6015(c).
Golder v. Commissioner, 604 F.2d 34 (9th Cir. 1979), addressing mortgage interest deductions by liable taxpayers.
Treas. Reg. § 1.163-1(b), explaining when an owner who is not personally liable on a mortgage may deduct mortgage interest.