Lois E. Ordlock, Petitioner v. Commissioner of Internal Revenue, Respondent, 126 T.C. 47

OPINION Goeke, Judge: Respondent determined that petitioner is entitled to relief under

section 6015(b). The issue for decision is the amount of refund, if any, petitioner is entitled to under

section 6015(g). Background The parties submitted this case fully stipulated under Rule 122. The stipulation of facts and the attached exhibits are incorporated herein by this reference. On July 26, 2002, respondent sent petitioner a Notice of Determination Concerning Your Request for Relief from Joint and Several Liability Under

Section 6015 (notice of determination). The notice of determination indicates that petitioner is entitled to relief under

section 6015(

b) of $160,912 for taxable years 1982, 1983, and 1984, for which she and her spouse (Mr. Ordlock) filed joint Federal income tax returns. The following table provides the specific adjustments for each taxable year in issue as stated in the notice of determination: Amount of Amount of relief you relief we could Amount of tax Tax period(

s) requested allow remaining 12/31/1982 $314 ($621) 12/31/1983 80,081 54,208 12/31/1984 132,606 132,601 The notice of determination further specifies that Weve granted your request in full, you don’t have to take any further action.” On November 1, 2002, the date the petition was filed, petitioner resided in Anaheim, California.

In her petition, petitioner, through her attorney, alleged that The Commissioner has apparently determined to allow Petitioner’s request in full, but the Notice [of determination] does not expressly state that Petitioner’s request is allowed in full, and the Notice [of determination] contains various erroneous amounts and calculations which misstate and miscalculate the amounts of relief for which Petitioner is eligible under Code

Section 6015(b). The effect of these misstatements and miscalculations is that the Notice [of determination] does not allow Petitioner’s request for relief in full. Therefore, this petition is necessary in order to verify that the Commissioner intended to allow Petitioner’s request in full and to correctly determine and state the full amount of relief for which Petitioner is eligible under Code

Section 6015(b). Given these allegations, petitioner prayed that this Court may hear the case and determine (

i) that Petitioner is entitled to relief from all joint and several liability on the joint returns of Petitioner and her spouse for each of the 1982, 1983, and 1984 tax years, in the full amount of such liability that was unpaid as of July 22, 1998, and (ii) that Petitioner is further entitled to relief from all joint and several liability for interest, penalties, and other amounts attributable to such unpaid (as of July 22, 1998) liability, and (iii) that the Court grant such other and further relief to which Petitioner may be entitled. In short, petitioner’s petition took issue with the scope of the

section 6015(

b) relief granted to petitioner in the notice of determination. At trial, on January 5, 2004, the parties made a joint motion for leave to submit case under Tax Court Rule 122, which the Court granted. The parties agree that petitioner is entitled to

section 6015(

b) relief from joint and several liability for the taxable years 1982, 1983, and 1984. The parties further agree that the application of

section 6015(

b) causes petitioner to have a Federal income tax liability (including interest, penalties, and other amounts) of zero for those years. Reported Taxes and Payments Petitioner and Mr. Ordlock (the Ordlocks) filed joint Federal income tax returns for the taxable years 1982, 1983, and 1984. On their returns they reported Federal income tax owed for each year. Respondent made numerous assessments for penalties, additional amounts of tax owed, and interest for the years in issue.

The information most relevant to the refund issue presented includes the payments and credits applied to the Ordlocks’ 1982, 1983, and 1984 taxable years, which were made from “community property” assets as defined in Cal. Fam. Code sec. 760 (West 2004), unless otherwise indicated. All of the payments for the years in issue are shown in the appendix hereto. The Ordlocks remained married at the time the payments on these tax liabilities were made.

Although the parties agree that one payment was from separate property and the rest from community property, no effort has been made at this stage of the litigation to trace the actual sources of the payments listed in the appendix. A. 1982 The Form 4340, Certificate of Assessments, Payments, and Other Specified Matters, for the Ordlocks’ 1982 taxable year does not list their adjusted gross income or taxable income. However, the Ordlocks’ 1982 tax return was filed on June 22, 1983, and reported $23,569 of Federal income tax owed.

From April 15, 1983, through May 7, 2003, the Ordlocks made numerous payments, and respondent applied an overpayment credit to their 1982 tax liability. The payments and credits totaled $142,882.67. B. 1983 The Ordlocks received an extension of time until August 15, 1984, to file their 1983 return. On June 6, 1984, the Ordlocks filed their 1983 return reporting $105,571 of Federal income tax owed. The Form 4340 for the Ordlocks’ 1983 taxable year shows their adjusted gross income was $544,739 and taxable income was $400,852.

From April 15, 1984, through May 5, 1998, the Ordlocks made numerous payments, and respondent applied overpayment credits to the Ordlocks’ 1983 tax liability. The payments and credits totaled $293,626.95. C. 1984 The Ordlocks received an extension of time to file their 1984 tax return until August 15, 1985. The Ordlocks reported $92,787 of Federal tax income owed for 1984 on their return, which was filed May 5, 1985. The Form 4340 for the Ordlocks’ 1984 taxable year shows their adjusted gross income was $489,194 and taxable income was $436,822.

From April 15, 1985, through May 9, 2002, the Ordlocks made payments and respondent applied overpayment credits to their 1984 tax liability. The payments and credits totaled $95,645.31. Discussion Whether petitioner is entitled to a refund under

section 6015(

g) related to community property assets used to pay Mr. Ordlock’s understatements presents an issue of first impression for this Court. Relief from joint and several tax liability for the taxable years in issue is not an issue because respondent has conceded that petitioner is eligible for relief under

section 6015(b). I. Is Petitioner Entitled to a Refundí A. The Parties’ Contentions and the Issue Presented Petitioner contends that

section 6015(

g) is unambiguous and its application entitles her to a refund of community property assets used to pay Mr. Ordlock’s understatements. Respondent argues that petitioner is not entitled to a refund of community property assets. Respondent contends that the “relief” provided to petitioner under

section 6015(

b) is relief from being held jointly or severally liable for her and Mr. Ordlock’s 1982, 1983, and 1984 joint tax liabilities. Respondent further argues that

section 6321 provides for a lien on the Ordlocks’ community property to secure Mr. Ordlock’s liability and therefore no refund of community property can be granted. The crux of this dispute is the application of the last sentence of

section 6015(

a) and the language of

section 6015(g)(1). The last sentence of

section 6015(

a) provides: “Any determination under this

section shall be made without regard to community property laws.”

Section 6015(g)(1) provides as follows: SEC. 6015(g). Credits and Refunds.

(1) In general. — Except as provided in paragraphs (2) and (3), notwithstanding any other law or rule of law (other than

section 6511, 6512(b), 7121, or 7122), credit or refund shall be allowed or made to the extent attributable to the application of this section. The dispute turns on the meaning of the phrases “Any determination under this section” in

section 6015(

a) and “notwithstanding any other law or rule of law” in

section 6015(g)(1). Petitioner argues that “Any determination” in

section 6015(

a) is comprehensive and includes the application of

section 6015(g)(1), and that State community property laws are disregarded under the “any other law” language in

section 6015(g)(1). Petitioner’s position does not focus on taxable income for the taxable years at issue, but rather on the ownership of the payments made on the joint tax liabilities over the subsequent 20 years. Petitioner asserts that

section 6015 requires this Court to reallocate payments between petitioner and Mr. Ordlock based on the economic sources, despite the continued existence of the marital community. This position has far-reaching implications as it would cause us to read

section 6015 as a statutory exception to the well-established law that State law defines ownership interests in property for purposes of Federal tax collections under

section 6321. See United States v. Craft, 535 U.S. 274, 292 (2002); Aquilino v. United States, 363 U.S. 509, 513 (1960); United States v. Bess, 357 U.S. 51, 55 (1958); Morgan v. Commissioner, 309 U.S. 78, 82 (1940). The question here is whether Congress has given us a “clear and unequivocal” intent to supplant community property law regarding payments of the type made on the Ordlocks’ joint tax liability. Powell v. Commissioner, 101 T.C. 489, 494 (1993). B. Statutory

Interpretation and Construction Our analysis begins with the language of the statute. Consumer Prod. Safety Commn. v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). Statutes are to be read to give effect to their plain and ordinary meaning unless that would produce absurd or futile results. United States v. Am. Trucking Associations, Inc., 310 U.S. 534, 543 (1940); see Tamarisk Country Club v. Commissioner, 84 T.C. 756, 761 (1985). Moreover, where the language of a statute is clear on its face, we require unequivocal evidence of legislative purpose before construing the statute to override the plain meaning.

Halpern v. Commissioner, 96 T.C. 895, 899 (1991); Huntsberry v. Commissioner, 83 T.C. 742, 747-748 (1984).

Section 6015 Congress enacted

section 6015 in the Internal Revenue Service Restructuring and Reform Act of 1998 (rra 1998), Pub. L. 105-206, sec. 3201, 112 Stat. 734, as a means of expanding relief to innocent spouses. See H. Conf. Rept. 105-599, at 249-255 (1998), 1998-3 C.B. 747, 1003-1009; S. Rept. 105-174, at 55-60 (1998), 1998-3 C.B. 537, 591-596; H. Rept. 105-364 (Part 1), at 60-62 (1997), 1998-3 C.B. 373, 432-434.

Section 6015 replaced

section 6013(

e) for any liability for tax arising after July 22, 1998, and any liability for tax remaining unpaid as of that date. 2. “Any determination” We first address whether a credit or refund under

section 6015(

g) is a “determination” for purposes of the last sentence of

section 6015(a). We start with the statutory use of the word “determination” in the context of community property laws and relief from joint liability. Former

section 6013(

e) was added to the Internal Revenue Code of 1954 by the Act of Jan. 12, 1971, Pub. L. 91-679, sec. 1, 84 Stat. 2063. It provided limited relief from joint return liability in paragraph (1) and included in paragraph (2)(

A) the following “Special rules”:

(2) Special rules. — For purposes of paragraph COCA) the determination of the spouse to whom items of gross income (other than gross income from property) are attributable shall be made without regard to community property laws * * * This “Special rule” remained a part of

section 6013(

e) until it was replaced by

section 6015 in 1998. The House version, Internal Revenue Service Restructuring and Reform Act of 1997, H.R. 2676, 105th Cong., 1st Sess. sec. 321 (1997), of the community property laws exclusion for

section 6015(

a) included much the same language as former

section 6013(e)(2)(A). However, the Senate amendment, rra 1998, H.R. 2676, 105th Cong., 2d Sess. sec. 3201 (1998), and the adopted version of H.R. 2676 in RRA 1998 sec. 3201, eliminates the language modifying the word “determination” and refers to “any determination”. The accompanying legislative history of the Senate amendment does not indicate any intent to disturb State law ownership interests in property for purposes of recalculating payments in fixing refunds under

section 6015. See S. Rept. 105-174, at 56-57 (1998), 1998-3 C.B. 537, 592-593. The Joint Committee’s explanation of the Senate’s change is as follows: Items are generally allocated between spouses in the same manner as they would have been allocated had the spouses filed separate returns. The Secretary may prescribe other methods of allocation by regulation. The allocation of items is to be accomplished without regard to community property laws. Staff of Joint Comm, on Taxation, Comparison of Provisions of H.R. 2676 Relating to IRS Restructuring and Reform as Passed by the House and the Senate, at III — 15 (J.

Comm. Print 1998); see Staff of Joint Comm. on Taxation, General Explanation of Tax Legislation Enacted in 1998 (the so-called Blue Book), at 68 (J. Comm. Print 1998). This explanation is consistent with allowing more flexibility for the Secretary to write regulations regarding allocations of income items for purposes of fixing the amount of relief from joint and several liability.

This explanation is also consistent with “any determination” concerning relief from joint and several tax liability for a specific taxable year, but not consistent with an analysis of the cash or property which has been collected on said liability. It is also noteworthy that the Senate amendments added equitable relief from joint and several liability. This is significant because equitable relief is not based on separate income computations, which were the grist of the community property waiver under former

section 6013(e). 3. Use of the Word, “Determination” in

Section 6015 After

section 6015(a), the word “determine” or “determination” appears five times in

section 6015, four of which are in subsection (e). The four instances in subsection (

e) refer to determinations of “relief” under

section 6015 and pertain to this Court’s jurisdiction to review the Secretary’s final determination of that relief. The words “determination” and “determine” do not appear in subsection (g)(1), which provides that a “credit or refund shall be allowed or made to the extent attributable to the application of this section.”

Section 6015(g)(2) provides: “The exception contained in the preceding sentence shall not apply if the court determines that the individual participated meaningfully in such prior proceeding.” 4. History of

Section 6015(

g) In 1998, paragraph (3)(

A) of

section 6015(e), as amended by a technical correction in the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, Pub. L. 105-277, sec. 4002(c)(2), 112 Stat. 2681-906 (1998), provided as follows:

(3) Applicable rules.— (

A) Allowance of credit or refund. — Except as provided in subparagraph (B), notwithstanding any other law or rule of law (other than

section 6512(b), 7121, or 7122), credit or refund shall be allowed or made to the extent attributable to the application of subsection (

b) or (f). The technical corrections in the Community Renewal Tax Relief Act of 2000, Pub. L. 106-554, sec. 313, 114 Stat. 2763A-640, 2763A-641, amended subsection (e)(3) by redesignating subsection (

g) as (

h) and adding new subsection (g)(1), which provides: SEC. 6015(g). Credits and Refunds.—

(1) In general. — Except as provided in paragraphs (2) and (3), notwithstanding any other law or rule of law (other than

section 6511, 6512(b), 7121, or 7122), credit or refund shall be allowed or made to the extent attributable to the application of this section. The House conference report indicates that the reason for the 2000 technical correction was as follows: Allowance of refunds. — The current placement in the statute * * * may inappropriately suggest that the provision applies only to the United States Tax Court, whereas it was intended to apply administratively and in all courts. The bill clarifies this by moving the provision to its own subsection. [H. Conf. Rept. 106-1033, at 1023 (2000), 2000-3 C.B. 304, 353.] Accordingly, the original intent of

section 6015(e)(3) remains useful for our purposes. In that regard, the House report’s initial explanation of the refund provisions in

section 6015 is pertinent: “The Tax Court may order refunds as appropriate where it determines the spouse qualifies for relief and an overpayment exists as a result of the innocent spouse qualifying for such relief.” H. Rept. 105-364 (Part 1), supra at 61, 1998-3 C.B. at 433. Similar to the language modifying “determination” in the current version of

section 6015(e), this Court’s authority under

section 6015(g)(1) to refund an overpayment flows from our “determination” of relief from joint and several tax liability. 5. “^Notwithstanding any other law or rule of law” Respondent argues that pursuant to

section 6321, a lien attaches to the entire amount of the Ordlocks’ community property, and thus, no refund of community property can be granted. The Federal tax lien statute does not create property rights but merely imposes consequences, federally defined, to rights created under State law. United States v. Craft, 535 U.S. at 278; United States v. Bess, 357 U.S. at 55. Accordingly, whether property can be reached by application of the Federal tax lien statute depends on what rights the taxpayer has in the property under State law. United States v. Craft, supra at 278. Petitioner counters that the “notwithstanding” provision of

section 6015(

g) takes precedence over all other statutes, laws, and rules of law that would conflict with or restrict a refund or credit. The phrase “notwithstanding any other law or rule of law” should not always be read literally. Or. Natural Res. Council v. Thomas, 92 F.3d 792, 796-797 (9th Cir. 1996); E.P. Paup Co. v. Director, OWCP, 999 F.2d 1341, 1348 (9th Cir. 1993); Kee Leasing Co. v. McGahan (In re Glacier Bay), 944 F.2d 577, 582 (9th Cir. 1991); Golden Nugget, Inc. v. Am. Stock Exchange, Inc., 828 F.2d 586, 588-589 (9th Cir. 1987).

If read literally here, the phrase could be applied to avoid all State law property ownership provisions in both common law and community property States, thus creating an absence of law to define the ownership of the payments for purposes of the

section 6015(

g) refund jurisdiction. Even if limited to community property provisions, petitioner’s position leaves us with no law or resource to define the ownership of the payments made from 1985 until 2003 on the tax liabilities for the years at issue. At this point, an excerpt from Powell v. Commissioner, 101 T.C. at 494, is especially apt: Another significant ingredient is reflected in the judicial attitude in respect of the interplay between Federal laws and State community property laws. This attitude is set forth in the following statement by the Supreme Court in Mansell v.

Mansell, 490 U.S. 581, 587 (1989): Because domestic relations are preeminently matters of state law, we have consistently recognized that Congress, when it passes general legislation, rarely intends to displace state authority in this area. See, e.g., Rose v. Rose, 481 U.S. 619, 628 (1987); Hisquierdo v. Hisquierdo, 439 U.S. 572, 581 (1979). Thus we have held that we will not find pre-emption absent evidence that it is “‘positively required by direct enactment’”. Hisquierdo, supra, at 581 (quoting Wetmore v. Markoe, 196 U.S. 68, 77 (1904)).

The instant case, however, presents one of those rare instances where Congress has directly and specifically legislated in the area of domestic relations. [Emphasis supplied.] In light of the foregoing approach, the Supreme Court has decreed that Federal law supplants community property law only where the congressional intent to accomplish such a result is clear and unequivocal. Mansell v. Mansell, supra (military retirement pay and veterans’ disability benefits); McCarty v. McCarty, 453 U.S. 210 (1981) (military retirement pay); Hisquierdo v.

Hisquierdo, 439 U.S. 572 (1979) (railroad retirement benefits); Wissner v. Wissner, 338 U.S. 655 (1950) (deceased army officer’s life insurance); In re Marriage of Hillerman, 167 Cal. Rptr. 240 (Ct. App. 1980) (Social Security benefits). * * * In addressing the question of whether there is “clear and unequivocal” congressional intent to supplant established reference to State law, the legislative history of the predecessor of

section 6015(

g) and the wording of the refund provision in

section 6015(e)(3) following the 1998 technical correction are helpful. In 1998, the refund authority in

section 6015(e)(3) was tied specifically “to the extent attributable to the application of subsection (

b) or (f)”, or in the words of the House report, was exercisable when the Tax Court “determines the spouse qualifies for relief and an overpayment exists as a result of the innocent spouse qualifying for such relief.” H. Rept. 105-364 (Part 1), supra at 61, 1998-3 C.B. at 433. Given this history, we see an intent to create refund authority tied specifically to a determination of relief from joint and several tax liability. However, we see no explicit intent to supplement that relief by revisiting the nature of prior payments under State community property laws. Had Congress intended courts to interpret

section 6015 in the manner that petitioner suggests, it would have provided an alternative to State law to define property rights. Otherwise, there will be a void in the collection scheme. We find no congressional intent to create such a void, nor to have it filled by the judiciary. II. Other Problems and Inconsistencies That Would Result From Petitioner’s Position A. Disregarding Community Property Laws in the Context of

Section 6015(

g) Would Discriminate Against Married People Who File Separately If spouses file separate returns and only one spouse is liable for unpaid taxes, the Internal Revenue Service can collect out of community assets. See McIntyre v. United States, 222 F.3d 655 (9th Cir. 2000); see also sec. 6321. However, under petitioner’s

section 6015 argument, if married spouses filed jointly, the Government could not collect out of community assets without some tracing mechanism when one spouse receives

section 6015 relief. Without Congress’s explicit rationale or statement of such an intent, we find this result to be inconsistent. B. Disregarding Community Property Laws in the Context of

Section 6015(

g) Would Create Potential Abuse We must avoid an

interpretation of

section 6015(

g) that would create a potential for abuse by allowing community property laws to be disregarded during the collection process. Because

section 6015 relief is often granted many years after the taxable year at issue, the timespan offers an opportunity to change the source of the payments that are otherwise community property. In an effort to avoid paying tax liabilities, married taxpayers in community property States could structure future payments so that ownership is attributable to the spouse requesting relief under

section 6015, while continuing a jointly financed lifestyle. C. Did Congress Leave Open the Question of How To Divide Property Between Spouses for Collection Purposes? As stated previously, another problem with petitioner’s position is the lack of legislative direction regarding how to divide the assets between spouses in community property States for collection purposes. If we adopt petitioner’s

interpretation of

section 6015 and refrain from looking to State law, a question arises as to where courts should derive such guidance. In addition, petitioner’s approach would lead to a very complex factual analysis to trace the acquisition of the assets used to make over 20 years of tax payments. It is likely that a married couple will continue to acquire assets throughout their relationship. Tracing the acquisition of those assets to ascertain what assets should be attributed to which spouse is an administrative nightmare that would severely impede collection and lead to layers of judicial

interpretation and analysis. We think Congress did not intend to create such a difficult factual issue in adopting

section 6015. III. Concern With Denial of Effective Relief Petitioner suggests that our holding today will frustrate congressional intent by effectively denying

section 6015 relief to persons in community property States. This suggestion appears to assume that the marital community continues after the year for which relief is sought, which is obviously not always the case. Nevertheless, we will examine the consequences of our holding where the spouse seeking relief remains married in a community property State after the taxable year in question, as in the present case. The Ordlocks remained married in California. They continued to accumulate assets and make payments on their joint tax liabilities for 1982, 1983, and 1984 for over two decades. If Mr.

Ordlock had been personally liable to a nongovernment creditor, the community assets would have been a potential source of payment to that creditor. The question is whether Congress intended to place the Commissioner at a disadvantage concerning liabilities such as Mr. Ordlock’s. As we have stated, we see no evidence of such congressional intent, nor do we see petitioner’s position as advantageous to tax administration given the problems discussed previously. The nature of a marital community in California is to generally allow the individual debts of the spouses to be collected out of community assets. Cal. Fam.

Code sec. 910 (West 2004); McIntyre v. United States, supra; Babb v. Schmidt, 496 F.2d 957 (9th Cir. 1974); Weinberg v. Weinberg, 432 P.2d 709, 713-714 (Cal. 1967); Grolemund v. Cafferata, 111 P.2d 641 (Cal. 1941). The policies behind the law can be debated, but a decision not to disrupt this rule for tax liabilities is sound. A marital community can involve many sources of income, many assets, and many expenses. How these expenses are paid, how the income is handled, and how assets are acquired are all choices of the spouses.

Attempts to undo these choices and determine the sources of payments and asset acquisitions are inherently inconsistent with the concept of a continued marital community and obviously likely to disrupt that community. IV. Conclusion “Any determination” in

section 6015(

a) refers to determinations of whether an individual taxpayer is entitled to relief from joint and several tax liability under

section 6015. This reading is consistent with the legislative history and statutory construction; a broader reading is not. The phrase “notwithstanding any other law or rule of law” in

section 6015(g)(1) should not be read to ignore State law for purposes of defining property interests subject to a Federal tax lien under

section 6321. We do not find that Congress intended for community property laws to be ignored under

section 6015(g)(1) regarding payments made on tax liabilities. Accordingly, petitioner is not entitled to a refund of an overpayment attributable to payments made from community property. To reflect the foregoing and concessions by respondent, Decision will be entered under Rule 155. Reviewed by the Court. Gerber, Cohen, Halpern, Chiechi, Thornton, Haines, Wherry, Kroupa, and Holmes, JJ., agree with this majority opinion. Laro, J., dissents.

APPENDIX Payments applied to the Ordlocks’ 1982 tax liability: Date Explanation Amount 4/15/1983 Withholding & excess FICA $55,535.00 8/7/1996 Miscellaneous payment 99.00 9/6/1996 Miscellaneous payment 99.00 10/8/1996 Miscellaneous payment 99.00 11/7/1996 Miscellaneous payment 99.00 12/9/1996 Miscellaneous payment 99.00 1/8/1997 Miscellaneous payment 99.00 2/5/1997 Miscellaneous payment 99.00 3/5/1997 Miscellaneous payment 99.00 4/7/1997 Miscellaneous payment 99.00 4/15/1997 Overpayment credit applied 7,558.91 5/5/1997 Miscellaneous payment 99.00 6/11/1997 Miscellaneous payment 99.00 7/1/1997 Miscellaneous payment 99.00 8/4/1997 Miscellaneous payment 99.00 9/4/1997 Miscellaneous payment 99.00 10/7/1997 Miscellaneous payment 99.00 10/30/1997 Miscellaneous payment 99.00 12/9/1997 Miscellaneous payment 99.00 1/8/1998 Miscellaneous payment 99.00 2/12/1998 Payment 99.00 2/26/1998 Subsequent payment -levy 1,500.09 3/3/1998 Subsequent payment -levy 7,865.46 3/6/1998 Subsequent miscellaneous payment 198.00 3/11/1998 Subsequent payment-levy 2,485.97 3/16/1998 Subsequent payment-levy 3,577.06 3/16/1998 Subsequent payment-levy 8,695.83 3/16/1998 Subsequent payment-levy 1,905.46 3/19/1998 Subsequent payment 77.36 3/23/1998 Subsequent payment-levy 15.00 4/8/1998 Subsequent miscellaneous payment 99.00 4/14/1998 Subsequent payment -levy 44,567.80 5/5/1998 Subsequent miscellaneous payment 99.00 6/4/1998 Subsequent miscellaneous payment 99.00 7/7/1998 Subsequent miscellaneous payment 99.00 8/6/1998 Subsequent miscellaneous payment 601.98 8/6/1998 Subsequent miscellaneous payment 99.00 9/10/1998 Subsequent miscellaneous payment 99.00 10/6/1998 Subsequent miscellaneous payment 99.00 11/4/1998 Subsequent miscellaneous payment 99.00 12/4/1998 Subsequent miscellaneous payment 99.00 1/7/1999 Subsequent miscellaneous payment 99.00 2/3/1999 Subsequent miscellaneous payment 99.00 3/3/1999 Subsequent miscellaneous payment 99.00 5/6/1999 Subsequent miscellaneous payment 99.00 6/8/1999 Subsequent miscellaneous payment 99.00 7/8/1999 Subsequent miscellaneous payment 99.00 8/6/1999 Subsequent miscellaneous payment 99.00 9/8/1999 Subsequent miscellaneous payment 99.00 11/4/1999 Subsequent miscellaneous payment 99.00 12/6/1999 Subsequent miscellaneous payment 99.00 1/5/2000 Subsequent miscellaneous payment 99.00 2/9/2000 Subsequent miscellaneous payment 99.00 3/3/2000 Subsequent miscellaneous payment 99.00 4/4/2000 Subsequent miscellaneous payment 99.00 5/4/2000 Subsequent miscellaneous payment 99.00 6/6/2000 Subsequent miscellaneous payment 99.00 7/7/2000 Subsequent miscellaneous payment 99.00 8/8/2000 Subsequent miscellaneous payment 273.00 8/8/2000 Subsequent miscellaneous payment 99.00 9/6/2000 Subsequent miscellaneous payment 99.00 10/6/2000 Subsequent miscellaneous payment 99.00 11/8/2000 Subsequent miscellaneous payment 99.00 12/4/2000 Subsequent miscellaneous payment 99.00 1/4/2001 Subsequent miscellaneous payment 99.00 2/2/2001 Subsequent miscellaneous payment 99.00 3/5/2001 Subsequent miscellaneous payment 99.00 4/4/2001 Subsequent miscellaneous payment 99.00 5/4/2001 Subsequent miscellaneous payment 99.00 6/5/2001 Subsequent miscellaneous payment 99.00 7/6/2001 Subsequent miscellaneous payment 99.00 8/3/2001 Subsequent miscellaneous payment 99.00 8/6/2001 Subsequent miscellaneous payment 204.75 9/6/2001 Subsequent miscellaneous payment 99.00 10/5/2001 Subsequent miscellaneous payment 99.00 11/6/2001 Subsequent miscellaneous payment 99.00 12/5/2001 Subsequent miscellaneous payment 99.00 1/2/2002 Subsequent miscellaneous payment 99.00 2/4/2002 Subsequent miscellaneous payment 99.00 3/1/2002 Subsequent miscellaneous payment 99.00 4/5/2002 Subsequent miscellaneous payment 99.00 5/3/2002 Subsequent miscellaneous payment 99.00 6/5/2002 Subsequent miscellaneous payment 99.00 7/2/2002 Subsequent miscellaneous payment 99.00 8/2/2002 Subsequent miscellaneous payment 99.00 9/3/2002 Subsequent miscellaneous payment 99.00 10/2/2002 Subsequent miscellaneous payment 99.00 11/--/2002 Subsequent miscellaneous payment 99.00 12/11/2002 Subsequent miscellaneous payment 99.00 1/10/2003 Subsequent miscellaneous payment 99.00 2/7/2003 Subsequent miscellaneous payment 99.00 3/6/2003 Subsequent miscellaneous payment 99.00 4/4/2003 Subsequent miscellaneous payment 99.00 5/7/2003 Subsequent miscellaneous payment 99.00 Total 142,882.67 Payments applied to the Ordlocks’ 1983 tax liability: Date Explanation Amount 4/15/1991 Overpayment credit applied $4,228.00 4/15/1984 Withholding and excess FICA 67,463.00 Return filed and tax paid 35,958.45 6/6/1984 4/15/1992 Overpayment credit applied 4,921.00 6/16/1995 Subsequent miscellaneous payment 98.00 8/7/1995 Subsequent miscellaneous payment 250.00 7/6/1995 Subsequent miscellaneous payment 98.00 8/10/1995 Subsequent miscellaneous payment 98.00 9/6/1995 Subsequent miscellaneous payment 99.00 10/10/1995 Subsequent miscellaneous payment 99.00 11/8/1995 Subsequent miscellaneous payment 99.00 12/6/1995 Subsequent miscellaneous payment 99.00 1/9/1996 Subsequent miscellaneous payment 99.00 2/6/1996 Subsequent miscellaneous payment 99.00 3/4/1996 Subsequent miscellaneous payment 99.00 4/9/1996 Subsequent miscellaneous payment 99.00 5/3/1996 Subsequent miscellaneous payment 99.00 6/5/1996 Subsequent miscellaneous payment 99.00 6/13/1996 Subsequent payment-Federal tax lien 78,177.66 7/8/1996 Subsequent miscellaneous payment 99.00 3/3/1998 Subsequent miscellaneous payment 100,488.28 5/5/1998 Subsequent miscellaneous payment 757.56 Total Subsequent miscellaneous payment 293,626.95 Payments applied to the Ordlocks’ 1984 tax liability: Date Explanation Amount 4/15/1985 Withholding & excess FICA $52,351.00 4/15/1985 Subsequent payment 20,000.00 5/22/1985 Payment with return 22,594.00 10/7/1998 Subsequent miscellaneous payment 99.00 9/3/2001 Overpaid credit applied 600.00 5/9/2002 Overpaid credit applied 1.31 Total 95,645.31 Unless otherwise indicated, all

section references are to the Internal Revenue Code as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure. We note that petitioner’s petition was postmarked Oct. 24, 2002, and was therefore timely. We note that the issue of whether petitioner is entitled to a refund was not specifically raised in the petition but was subsequently raised and briefed by the parties. The parties’ filings address neither when the period of limitations under sec. 6511 expires in this case, nor whether petitioner has filed a refund claim within that period.

Consequently, we do not discuss these issues. This is not the first instance this issue has arisen in Federal tax litigation. See United States v. Stolle, 86 AFTR 2d 5180, 2000-1 USTC par. 50,329 (C.D. Cal. 2000). The California Supreme Court in Grolemund v. Cafferata, 111 P.2d 641 (Cal. 1941), expressly distinguished California’s community property law from the "community debt” and “separate debt” positions of Washington and Arizona. Community property rights are equal regardless of which spouse acquires the property.

The following describes the nature of the equal ownership: The equal ownership of the community property assets and acquisitions has never been dependent upon a calculus of labor or talent. Both man and woman equally are partners in the marriage; both equally share marital property, regardless of whether or not the actual asset was earned by one or the other. For example, if the wife is a highly paid attorney and the husband is a school teacher or works primarily at home, the differential in actual earnings or earning capacity is irrelevant to the ownership rights of each.

The notion of marriage as a true legal partnership extends to all the property earned by either partner during marriage. In the common law states, if a husband earns $60,000 a year and the wife’s role is that of a homemaker, whether she has the primary responsibility of raising the couple’s children or not, she will be entitled only to a statutory fraction of her husband’s estate on his death, one-half to one-third in most states. During the existence of the marriage she has no direct interest in his earnings, aside from her right to support.

In the community property system, on the other hand, both spouses have a continuing half ownership of the marital earnings from the beginning of the marriage and from the time of acquisition of the property. Each party in the law today is an equal agent of the partnership, binding it if acting within the scope of his or her authority and if acting for the joint benefit of the family. The California community property system adds to joint ownership the right of equal management and control. Bassett, California Community Property Law, sec. 1:18 (2005 ed.).

The parties agree that the Mar. 11, 1998, $2,485.97 payment in the form of levy was made from petitioner’s “separate property”, as defined in Cal. Family Code sec. 770(a) (West 2004). The exact day was illegible.