Eleventh Circuit in Wright v. Commissioner: No Innocent-Spouse Relief Where Deficiency Stems from the Petitioner’s Own Income & Strict “Compensable-Harm” Standard for Removal-Power Challenges

1. Introduction

Fannie Wright v. Commissioner of Internal Revenue is an appeal from the U.S. Tax Court to the Eleventh Circuit dealing with two distinct questions:

• Whether a taxpayer may obtain “innocent-spouse” relief under 26 U.S.C. § 6015 when the entire tax deficiency is attributable to her own income.
• Whether 26 U.S.C. § 7443(f) – the “for-cause” removal protection for U.S. Tax Court judges – unconstitutionally restricts the President’s removal power, and, if so, what remedy is available.

Ms. Wright, whose unreported Social Security benefits generated the deficiencies for 2013-2015, sought relief on both statutory and constitutional grounds. The Eleventh Circuit affirmed the Tax Court’s denial of relief and declined to decide the constitutional issue, citing lack of “compensable harm.” The decision clarifies the substantive boundaries of § 6015 and cements Collins v. Yellen’s remedial framework in removal-power challenges.

2. Summary of the Judgment

1. Statutory Holding. Innocent-spouse relief under § 6015(b), (c) or (f) is unavailable when the deficiency is 100 % allocable to the requesting spouse’s own income. Therefore, the Tax Court was correct to deny Ms. Wright’s petition without first deciding whether valid joint returns had been filed.

2. Constitutional Holding. The panel (per curiam) declined to reach the merits of Ms. Wright’s separation-of-powers challenge to § 7443(f). Under the doctrine of constitutional avoidance and Collins v. Yellen, a litigant must show “compensable harm” flowing from the contested removal provision. Because Ms. Wright alleged none, the court found no basis to invalidate § 7443(f) or to order a new Tax Court hearing.

3. Analysis

3.1 Precedents Cited

• Sleeth v. Commissioner, 991 F.3d 1201 (11th Cir. 2021) – sets the standard of review in stand-alone § 6015 cases (abuse-of-discretion; de novo for legal issues). Provides guidance on § 6015(f) equitable factors.
• Commissioner v. Neal, 557 F.3d 1262 (11th Cir. 2009) – reiterates mixed standard of review.
• United States v. Galletti, 541 U.S. 114 (2004) – illustrates that tax liability exists independently of a filed return.
• Ashwander v. TVA, 297 U.S. 288 (1936) & Lyng v. Northwest Indian Cemetery, 485 U.S. 439 (1988) – articulate the principles of constitutional avoidance.
• Collins v. Yellen, 141 S.Ct. 1761 (2021) – establishes that an unconstitutional removal restriction is not self-executing; the challenger must demonstrate a causal link to concrete harm.
• Rodriguez v. SSA, 118 F.4th 1302 (11th Cir. 2024) – Eleventh Circuit application of Collins to removal-power claims involving Social Security ALJs.

3.2 Court’s Legal Reasoning

a. Innocent-Spouse Relief.

• Section 6015(b) relief requires the understatement to be due to the other spouse’s erroneous items; § 6015(c) similarly allocates liabilities as if filing separately; § 6015(f) authorizes equitable relief only for the portion attributable to the “non-requesting spouse.”
• Because the entire deficiency resulted from Ms. Wright’s own unreported Social Security income, none of the subsections could apply. The court framed § 6015 as a “spousal shield” – not an avenue to escape one’s own income-tax responsibility.
• Ms. Wright’s argument that the Tax Court had to verify the validity of the joint returns before denying relief misconstrues § 6015. Liability for tax attaches by statute, not by the mere act of filing. Therefore, joint-return validity is not a threshold jurisdictional fact, but only a potential element if the substantive criteria of § 6015 were otherwise met.

b. Constitutional Challenge to § 7443(f).

• The court invoked Ashwander’s avoidance canon: do not decide constitutional questions unnecessarily.
• Applying Collins, a litigant must show the contested removal clause caused harm – e.g., Presidential attempt to remove, or statements demonstrating a counterfactual outcome.
• Ms. Wright supplied no evidence that any President sought to remove the Tax Court judge or that the judge’s allegedly insulated status altered the outcome. Consequently, even if § 7443(f) were unconstitutional, no remedy (vacatur or new hearing) would follow.

3.3 Likely Impact of the Decision

Tax-Procedure Sphere

• Clarifies that § 6015 cannot be invoked where a deficiency is entirely attributable to the requesting spouse – making future petitions of this nature facially weak.
• Signals to practitioners that challenges predicated on “invalid joint return” theories will not forestall denial if the core statutory predicates fail.

Separation-of-Powers Litigation

• Deepens lower-court consensus that Collins’ “compensable-harm” filter applies well beyond FHFA: here, Tax Court judges.
• Raises the bar for litigants seeking structural constitutional relief: they must plead and prove causation and prejudice, not merely flag an ostensibly defective removal clause.
• Reduces the prospect of widespread relitigation of Tax Court decisions on removal-power grounds, absent concrete evidence of presidential interference.

4. Complex Concepts Simplified

• Joint & Several Liability. When spouses file a joint return, each is legally responsible for the entire tax bill, regardless of whose income gave rise to the tax.
• Innocent-Spouse Relief (§ 6015). A statutory escape hatch letting one spouse off the hook for taxes chiefly generated by the other spouse, but only in narrowly defined circumstances.
• Social Security Benefit Taxation. Up to 85 % of Social Security benefits become taxable if the recipient’s income surpasses statutory thresholds.
• Constitutional Avoidance. A doctrine directing courts to resolve cases on non-constitutional grounds whenever possible, preserving the separation of powers and judicial restraint.
• For-Cause Removal Protection. A statutory term limiting the President’s ability to fire an official to specific misbehaviors; potentially conflicting with Article II’s Vesting & Take-Care Clauses.
• Compensable Harm (per Collins). A tangible adverse effect that can be traced to the allegedly unconstitutional removal limitation – a necessary prerequisite to obtaining relief.

5. Conclusion

Wright v. Commissioner crystallizes two pivotal points of federal law. First, § 6015 is not a vehicle to shed liability derived from one’s own income; its protections activate only when the tax attributable to the other spouse burdens the petitioner. Second, structural constitutional challenges to removal protections now demand a showing of real-world prejudice; absent such a showing, courts will withhold relief and refuse to engage in needless constitutional adjudication. Practitioners in tax controversy and public-law litigation should recalibrate strategies accordingly: focus on allocable income facts in § 6015 disputes, and marshal concrete evidence of presidential or agency-head involvement when asserting removal-power objections.