Ordlock

BACKGROUND

Lois Ordlock and her husband, Bayard M. Ordlock, live in California, a community property state. The Ordlocks filed joint federal income tax returns in California for the years 1982, 1983, and 1984. Because all three returns understated the Ordlocks’ tax liabilities, the Commissioner of the Internal Revenue Service made several assessments of additional amounts of tax, penalties, and interest owed by the Ordlocks for those three years.

Over the next two decades, the Ordlocks made several pay- ments on the tax debt. Except for one payment of $2,485 made from Mrs. Ordlock’s separate property,2 all payments and credits applied to the couple’s tax debt were made from community property.3 The Ordlocks remained married at the time all payments were made, and are still married today. 1 Unless otherwise indicated, all statutory references are to the Internal Revenue Code (26 U.S.C.). 2 See Cal. Fam. Code § 770(a) (“Separate property of a married person includes all of the following: (1) All property owned by the person before marriage; (2) All property acquired by the person after marriage by gift, bequest, devise, or descent; (3) The rents, issues, and profits of the prop-…