Hegg v. Internal Revenue Service

TROUT, Chief Justice.

This case presents a certified question from the United States District Court for the District of Idaho regarding whether debts incurred by one spouse through fraudulent conduct can be satisfied from community assets.

I

FACTUAL AND PROCEDURAL BACKGROUND

David and Mary Hegg were married in Idaho in 1968. In 1986, they purchased a residence, which was community property under the laws of Idaho. In 1992, David obtained a $3 million refund from the IRS by filing a fraudulent joint income tax return. When the IRS discovered the fraud in June of 1992, it filed a lien on the Heggs’…