MEMORANDUM OPINION DENYING MOTION FOR SUMMARY JUDGMENT
MEREDITH S. GRABILL, UNITED STATES BANKRUPTCY JUDGE.
Before the Court is the Debtor's Motion For Summary Judgment And Incorporated Memorandum In Support and a supplemental memorandum with accompanying Exhibits A — D (collectively, the "
JURISDICTION AND VENUE
This Court has jurisdiction to grant the relief provided for herein pursuant to 28 U.S.C. § 1334 and the Order of Reference of the District Court dated April 22, 2021. The matter presently before the Court constitutes a core proceeding that this Court may hear and determine on a final basis under 28 U.S.C. § 157(b). The venue of the Debtor's chapter 13 case is proper under 28 U.S.C. § 1408.
As discussed below, the Debtor asks this Court to find that no genuine issues of material fact exists as to whether she is entitled to relief from tax liability as an "innocent spouse" under § 6015 of the Internal Revenue Code. Although it is true that "Section 6015(f) does not allow a bankruptcy court to exercise initial subject matter jurisdiction over an innocent spouse defense because only the Secretary [of the IRS] receives the equitable power to grant innocent spouse relief under that Section," here, it is undisputed that the Debtor sought such relief from the Secretary in July 2019 and the Secretary denied the request. See MSJ, ¶ 8; [ECF Doc. 82-2, ¶ 7]. Section 6015(e)(1)(A) confers subject-matter jurisdiction upon this Court to determine whether innocent spouse relief should be granted when it is denied by the Secretary. As explained by another court is this Circuit:
Pendergraft v. I.R.S. (In re Pendergraft), Adv. No. 16-3246, 2017 WL 1091935, at *3-4 (Bankr. S.D. Tex. Mar. 22, 2017) (citing cases in support of that finding). Here, the determination of the Debtor's tax liability directly affects the administration of her bankruptcy estate. Indeed, the IRS has filed a proof of claim against the estate and has not raised an objection to this Court's jurisdiction to rule on the Debtor's status as an innocent spouse.
The Debtor filed a petition for bankruptcy relief under chapter 13 of the Bankruptcy Code on August 27, 2020 (the "
A. Burden of Proof
In a bankruptcy case, a proof of claim filed in accordance with Bankruptcy Rule 3001 is "prima facie evidence of the validity and amount of the claim." See FED. R. BANKR. P. 3001(f). That prima facie validity may be rebutted by the objecting party providing evidence "of a probative force equal to that of the creditor's proof of claim." Simmons v. Savell (In re Simmons), 765 F.2d 547, 552 (5th Cir. 1985). Because "bankruptcy does not alter the burden imposed by the substantive law," once an objecting party produces evidence rebutting a proof of claim, the burden lies at that point with whichever party it would normally, according to the applicable substantive law. See In re Wyly, 552 B.R. 338, 375 (Bankr. N.D. Tex. 2016) (quoting Raleigh
In her Claim Objection, the Debtor does not challenge the fact that the IRS filed its proof of claim in accordance with Bankruptcy Rule 3001, and indeed, it appears that the IRS has complied with relevant requirements of that rule. Therefore, the IRS proof of claim is entitled to prima facie validity. The Debtor, as the taxpayer, bears the burden of proving that she has met all the prerequisites for innocent spouse relief. See Cheshire v. Comm'r, 282 F.3d 326, 332 (5th Cir. 2002) (citation omitted); see also In re French, 242 B.R. 369, 377 (Bankr. N.D. Ohio 1999) (citation omitted).
B. Summary Judgment Standard
In the context of deciding a motion for summary judgment, "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a).
In deciding a motion for summary judgment, "the judge's function is not [herself] to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In so doing, the Court views the facts and evidence in the light most favorable to the non-moving party at all times. See Campo v. Allstate Ins. Co., 562 F.3d 751, 754 (5th Cir. 2009). A party asserting that a fact cannot be or is genuinely disputed must support that assertion by citing to particular parts of materials in the record, showing that the materials cited do not establish the presence or absence of a genuine dispute, or showing that an adverse party cannot produce admissible evidence to support that fact. See FED. R. CIV. P. 56(c)(1). "The court need consider only the cited materials, but it may consider other materials in the record." FED. R. CIV. P. 56(c)(3). If a party fails to properly support or refute an assertion of fact, the Court may consider the fact undisputed for purposes of resolving a summary judgment motion. See FED. R. CIV. P. 56(e).
C. The Innocent Spouse Doctrine
"[A]s a general rule, when married persons file a joint income tax return they become jointly and severally liable for the tax due with respect to that return." In re Wyly, 552 B.R. 338, 464 (Bankr. N.D. Tex. 2016). But "Congress concluded that under certain circumstances, such liability could be unfair." Id. Under § 6015(f) of the Internal Revenue Code, a spouse may obtain relief from tax liability if she can establish that under "all the facts and circumstances, it is inequitable to hold [her] liable for any unpaid tax." Haggerty v. Comm'r, 505 F. App'x 335, 337 (5th Cir. 2013) (quoting 26 U.S.C. § 6015(f)). "The
Id. § 4.01. If those threshold conditions identified in § 4.01 are met, the Court could elect to "streamline" its determinations pursuant to factors identified in § 4.02, including whether (a) the requesting spouse is still married to the non-requesting spouse, (b) whether the requesting spouse would suffer economic hardship if relief were not granted, and (c) whether the requesting spouse knew or had reason to know that there was an understatement or deficiency on the joint income tax return or did not know or have reason to know that it would not be paid. Id. § 4.02. The fact that a requesting spouse does not qualify for streamlined consideration, however, does not affect his or her ability to be granted innocent spouse relief. Id. Ultimately, if the threshold factors in § 4.01 are met, the determination
Id. § 4.03.
D. Genuine Issues of Material Fact Exist as to Whether the Debtor Is Entitled to Summary Judgment on Her Status as an Innocent Spouse.
The Debtor asserts that she has satisfied her burden to demonstrate that no genuine issue of material fact exists regarding her qualification as an innocent spouse under § 6015(f) of the Internal Revenue Code. In support of her MSJ, the Debtor submitted no affidavits or declarations made under penalty of perjury, but attached a copy of her husband's Certificate of Death, a letter purportedly from her family physician addressing the Debtor's mental health condition, a copy of her Request for Innocent Spouse Relief submitted to the IRS, a copy of Revenue Procedure 2013-34, and a schedule purported to be generated by the IRS listing tax liability amounts which would have been due by the Debtor if the liability had been based solely on her income for the years 2009 to 2013. See MSJ, Exs. A-E. The IRS relies in large part on sworn documents filed by the Debtor in her bankruptcy case, as well as the Debtor's filed tax returns and her deposition testimony taken in connection with this contested matter, to refute the Debtor's MSJ and assert that, at best, genuine issues of material fact exist as to whether the Debtor qualifies for equitable relief under § 6015(f). [ECF Doc. 82-1].
The Court agrees with the IRS and finds that insufficient evidence has been presented to determine whether the Debtor, as a matter of law, qualifies for equitable relief under § 6015(f). The Court cannot conclude that the Debtor has met her burden of establishing each of the threshold elements expounded in § 4.01 of Revenue Procedure 2013-34, including, but not limited to, the seventh requisite regarding whether income tax liability from which the requesting spouse seeks relief is attributable in full or in part to an item of the non-requesting spouse or an underpayment resulting from the non-requesting spouse's income. The Court finds that genuine issues of material fact exist as to whether the Debtor can satisfy the threshold requirements for § 6015(f) relief, as well as the substantive factors enumerated in § 4.03 of Revenue Procedure 2013-34 that are required for an award of equitable relief.