District Court rules wife's refund applies to husband's past-due child support.

• Author: Barton, Peter C.

In Oatman, 814 F Supp 912 (DC Id. 1993), a Federal District Court recently rejected a refund suit by Emily Oatman filed when the IRS had intercepted the refund from the Oatmans' jointly filed 1990 tax return and applied it to past-due child support for her husband's children from a previous marriage.

In 1981, Congress enacted Sec. 6402(c), under which the Service can reduce any Federal tax refund by the amount of past-due child support owed by a taxpayer. In 1984, Congress added Sec. 6402(e), which specifies that no Federal court shall hear any suit brought under Sec. 6402(c); the taxpayer's only recourse is to sue the state social service agency that claimed the refund. The purpose of Sec. 6402(e) is to relieve the IRS from litigating the substantive merits of the debt. Applying Sec. 6402(c) and (e), the court in Oatman held that it did not have jurisdiction to hear Emily Oatman's suit for her half of the refund.

Emily Oatman claimed that the interception of the refund was contrary to an earlier U.S. Supreme Court case, violated Idaho law and was unconstitutional. The District Court pointed out that the Supreme Court's decision occurred before enactment of Sec. 6402(e). Emily Oatman also cited an Idaho statute that limits the refund offset to one-half of the refund on a joint return when only one of the spouses is obligated to pay the child support. However, the court found that this statute applied only to the idaho state tax commission; therefore, it did not prevent the interception of a Federal tax refund by the Service. Also, the court held that the IRS had properly applied Idaho law allowing community property to be used to satisfy any premarital or other separate debts of either spouse.

The District Court did not comment on the constitutionality issue. However, in...