September 24, 2009, Decided
COUNSEL:  APPEARANCES:
Richard F. Artura, Esq., Phillips, Weiner, Artura & Cox,  Lindenhurst, New 
York.
Kenneth Kirschenbaum, Esq., Kirschenbaum &  Kirschenbaum, Garden City, New 
York.
JUDGES: Alan S. Trust, United States  Bankruptcy Judge.
OPINION BY: Alan S.  Trust
OPINION
MEMORANDUM OPINION REGARDING TURNOVER OF TAX  REFUND
Issues Before the Court and Summary of  Decision
Pending before the Court is the Motion to  Turnover Property Under Section
521(a)(4) ("Motion") filed by the chapter 7  Trustee Kenneth Kirschenbaum
("Trustee"). At issue are refunds of prepetition  federal and state income 
taxes
paid by Debtor and his non-debtor spouse. The  aggregate amount of the 
refunds is
$ 8,136.00. The Trustee has requested that  this Court direct the Debtor to 
turn
over $ 5,636.00 as the nonexempt portion  of the tax refunds. Debtor 
asserts that
his non-debtor spouse is entitled to  half of the refunds, and that the 
amount of
the refunds to which the Trustee  is entitled is one half of $ 8,136.00 
less the
$ 2,500.00 exemption allowable  to Debtor, for a total amount to be turned 
over
of $  1,568.00.
For the reasons herein, but not for the  reasons argued by either side, the
Court agrees with  Debtor.
Jurisdiction
This Court has jurisdiction  over this core proceeding pursuant to 28 U.S.C.
§§ 157(b)(2)(A), (B), (E) and  (O), and 1334(b), and the Standing Order of
Reference in effect in the  Eastern District of New York.
Procedural  History
On February 28, 2009, Debtor filed a voluntary  petition for relief under
Chapter 7 of the United States Bankruptcy Code  ("Petition Date"). Debtor 
filed,
inter alia, his Schedules and Statement of  Financial Affairs ("SOFA"). 
[dkt item
1] In his Schedule B, Debtor disclosed  an "Anticipated Tax Refund" in the 
amount
of $ 5,500.00, which he listed as  jointly owned with his wife. In his 
Schedule
C, Debtor then claimed an  exemption in $ 2,500.00 of the anticipated 
refund,
pursuant to New York  Debtor and Creditor Law Section 283. N.Y. DEBT. & 
CRED. LAW
§ 283  (McKinney 2009). The tax refunds arise from tax returns filed for 
year
2008,  which returns were filed and for which the associated taxes were paid
prior  to the Petition Date.
On May 18, 2009, the Trustee  filed the Motion. [dkt item 18]
On May 22, 2009, the  Debtor filed his Opposition to the Motion, in which he
states that "he earns  100% of the family income." [dkt item 19]
On June 16,  2009, the Trustee filed a Reply. [dkt item 23]
This  Court held a hearing on the Motion on June 23, 2009. At the hearing,  
the
parties agreed that, although the issue of refunds of prepetition taxes  
has been
raised in prior cases before this Court, and opinions on this issue  have 
been
written in other districts, this is an issue of first impression  because 
there
are no published opinions from the Eastern District of New York  or binding
decisions from the Second Circuit Court of Appeals. The parties  also 
agreed that
the facts are not in controversy as to which spouse is and  has been the 
wage
earner at all times relevant to the Motion, and agreed that  this matter 
could be
resolved on submissions, without an evidentiary  hearing.
The Court directed the parties to submit  briefing and supplemental
submissions focusing on the applicability of the  50/50 ownership rule, as
described infra. Any additional briefing and  evidence was to be submitted 
to the
Court by July 1, 2009, at which time this  matter would be deemed under
submission.
On June 26,  2009, Debtor filed a post-hearing submission. [dkt item 25] 
That
submission  provides, in pertinent part, as follows:
My wife, Madeline Spina, and I have a joint personal  checking
account with Capital One Bank. See attached  statement.
Madeline Spina and I  have been married for twelve (12) years and
are the  parents of five year old twins. We own our house together, we
file joint income tax returns, share our cars, and in all respect  have
combined household income and expenses with me being  the wage earner
and my wife being the  homemaker.
[dkt item 25, PP 2,3]
The Trustee  did not file additional briefing or submissions.
Legal  Analysis
This Court must determine how to allocate  refunds of income taxes paid 
prior
to the petition date as between a debtor  and a non-debtor spouse. The 
Trustee is
entitled to turn over of the debtor's  non-exempt portion of the tax 
refunds, but
not to the non-debtor spouse's  portion, as the non-debtor's portion is not
property of the bankruptcy  estate. The Trustee asserts  that the tax 
refunds are
property of the  estate under Section 541 of the Bankruptcy Code, and that 
the
Debtor is  obligated to turn over the full amount, less any allowable 
exemption,
under  Sections 521 and 541. The Debtor asserts that his non-debtor spouse  
is
entitled to half of the refunds, and that this Court should adopt  the
presumptive "50/50 ownership rule" ("50/50 Rule") discussed in In re  
Marciano,
372 B.R. 211 (Bankr. S.D.N.Y. 2007), and limit the estate's  interest to 
one-half
of the refund, less the Debtor's $ 2,500.00 exempt  portion.
When, as here, a debtor and non-debtor spouse  file joint tax returns, and 
the
debtor earns the substantial portion or even  the entirety of the married
couple's taxable income, there is a split of  authority among bankruptcy 
courts
regarding how to allocate the refund as  between the spouses, and, 
therefore, as
between the estate and the non-debtor  spouse. As discussed below, three
different lines of cases have developed on  this issue. However, the 
analysis in
all of these cases begins with Section  541(a)(1) of the Bankruptcy Code, 
which
broadly defines property of the  estate as, "all legal and equitable 
interests of
the debtor in property as of  the commencement" of the bankruptcy 
proceedings. 11
U.S.C. § 541(a)(1). Under  Section 541(a)(1), "a tax refund that is received
post-petition is property  of the estate if it is attributable to wages 
earned
and withholding payments  made during prepetition years." Carlson v. 
Moratzka (In
re Carlson), 394 B.R.  491, 493 (8th Cir. B.A.P. 2008) (citing In re Benn, 
491
F.3d 811, 813 (8th  Cir. 2007)). 1
- - - - - - - - - - - - - - Footnotes - - - - - - - - - -  - - - - -1   The
Bankruptcy Code also includes as property of  the bankruptcy estate, "all
interests of the debtor and the debtor's spouse  in community property as 
of the
commencement of the case that is under the  sole, equal, or joint 
management and
control of the debtor." 11 U.S.C. §  541(a)(2)(A). However, because New 
York is
not a community property state,  this opinion does not address any possible
issues arising under §  541(a)(2)(A).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - -  -
The three lines of analysis which have developed are  referred to as: the
withholding rule; the income rule; and the 50/50 Rule  referenced above. 
Each of
these approaches analyzes Section 541(a), and also  looks to applicable 
state law
to determine how the tax refund would be  apportioned between the spouses 
outside
of  bankruptcy.
The majority of courts follows the  withholding rule, which, as the Eighth
Circuit's Bankruptcy Appellate Panel  stated in Carlson, "allocates the 
joint tax
refund between the spouses in  proportion to their respective tax 
withholding."
In re Carlson, 394 B.R. at  494(citing In re Kleinfeldt, 287 B.R. 291, 292 
(10th
Cir. B.A.P. 2002)).  According to the withholding rule, a non-debtor spouse 
may
have been employed  but not have generated any withheld taxes, and, 
therefore,
would have no  right to any withheld taxes which are repaid to the 
taxpayer. In
re  Kleinfeldt, 287 B.R. at 293.
In comparison, the income  approach divides the refund according to the 
income
generated by each spouse.  In re Carlson, 394 B.R. at 494. This view, also 
known
as the "Proportionate  Income Rule," allocates the tax refund as a direct
percentage of the earnings  of the spouses.
The third approach, the 50/50 Rule,  represents the minority view, and has
been followed by the bankruptcy courts  in both the Southern and Western
Districts of New York. See, e.g., In re  Marciano, 372 B.R. 211 (Bankr. 
S.D.N.Y.
2007); In re Barrow, 306 B.R. 28  (Bankr. W.D.N.Y. 2004). The 50/50 Rule 
applies
New York state matrimonial law  to first establish each  spouse's rights to
marital property, and then  considers what the division of marital 
property, such
as a tax refund, would  be in a divorce proceeding. The 50/50 Rule creates a
rebuttable presumption  that each spouse contributed equally to the 
household,
including nonmonetary  contributions, and, therefore, the refund should be
divided equally between  the spouses. This presumption exists regardless of 
the
taxable earnings of  the spouses, and regardless of the source of the 
taxable
income or tax  withholding. As noted, however, the 50/50 rule creates a
"rebuttable  presumption of equal ownership to any joint tax refund." In re
Marciano, 372  B.R. at 214 (citing In re Barrow, 306 B.R. at 31). To 
overcome  the
presumption, evidence must be presented that the "couple's 'present  
conduct or
history of financial management' suggests separate financial  affairs." Id.
To depart from the presumption of equal  ownership, a court following the
50/50 Rule would analyze several factors  from a married couple's history of
financial management, which may  include:
Whether the monthly  bills of the debtors' are paid out of joint
accounts;  Whether the debtor considers the responsibility for paying
the household bills to be a joint responsibility; Whether the  accounts
of the debtor and non-debtor spouse have always  been held jointly;
Whether the debtor and non-debtor  spouse have ever held individual
accounts at any point  during the marriage; Whether both husband and
wife have  equal access to funds in accounts; Whether their joint tax
refunds have always been deposited into joint checking accounts  with
both debtors having full access to the funds; and  the purpose or use
to which the tax refunds have  traditionally been applied (e.g., for
household expenses  or educational expenses for their children).
In re Hejmowski, 296  B.R. 645, 650 (Bankr. W.D.N.Y. 2003); see also 
Marciano,
372 B.R. at 217  (utilizing these factors to determine that the debtor's 
course
of conduct  with regard to the marital assets did not overcome the 50/50  
Rule
presumption); In re Barrow, 306 B.R. at 31(using the same analysis to  
determine
the refund should be divided  equally).
Both the Marciano and Barrow courts referred  to New York matrimonial law 
for
guidance. Under Section 236 of the New York  Domestic Relations Law, any 
property
acquired during a marriage is owned  equally by the spouses in an "economic
partnership," and is thus available  for equitable distribution upon 
dissolution
of the union. N.Y. Dom. REL. LAW  Â§ 236 (McKinney 2009); see also Musso v.
Ostashko, 468 F.3d 99, 102 (2d. Cir.  2006); Marciano, 372 B.R. at 215. 
Under New
York law, "as a general rule, the  refund on a joint tax return is a joint 
asset
that spouses own 'in equal  shares'. . . [and u]nder the current tax code, 
[a
court] simply cannot assume  that any refund represents income for one 
spouse or
the other." Marciano, 372  B.R. at 216 (quoting Barrow, 306 B.R. at 31).
Consequently, under the 50/50  Rule, "an income tax refund should be split
equally between spouses for  purposes of allocating property of the estate
pursuant to 11 U.S.C. § 541."  Marciano, 372 B.R. at 216.
A Different Approach to the Division of Tax  Refunds
This Court has determined that a different  approach should be taken to the
tax refund analysis which harmonizes  applicable tax, bankruptcy, and state
marital property law. In this Court's  view, spouses filing joint returns 
who
equally share the liability for  payment of the taxes should equally share 
the
benefit of any tax  refund.
This Court begins its analysis with Section  6013 of Title 26 of the United
States Code, the Internal Revenue Code  ("IRC"), which governs the filing of
joint tax returns:
6013. Joint returns of income tax by husband and  wife:
(a) Joint returns.--A husband  and wife may make a single return
jointly of income taxes  under subtitle A, even though one of the
spouses has  neither gross income nor deductions[.]
26 U.S.C. § 6013(a)(emphasis  supplied). When spouses file a joint return,
subsection (d)(3) of Section  6013 creates joint and several liability for 
the
taxes due. 2 Married couples  who decide to file jointly may do so for any 
number
of reasons, including  receiving the economic value of any tax benefits 
derived
from filing  jointly.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - -  - -2
Specifically, the subsection provides:
(d)  Special rules.--For purposes of this section-
(3) if a  joint return is made, the tax shall be computed on the aggregate
income and  the liability with respect to the tax shall be joint and  
several.
26 U.S.C.A. § 6013(d)(3).
- - - - - - - - -  - - - End Footnotes- - - - - - - - - - - - - -
The IRC  does provide statutory relief from the joint and several liability
provision  of Section 6013(d)(3). A spouse may be relieved from liability  
under
procedures established for what has come to be referred to as the  innocent
spouse exception, as established under Section 6015(b). 3 In  addition, 
taxpayers
who are no longer married or are legally separated may  apply for relief 
under
Section 6015(c). Compare Shafman v. U.S. Dep't of the  Treasury (In re 
Shafman),
267 B.R. 709, 714-717 (Bankr. N.D. W. Va.  2001)(finding that debtor seeking
determination of dischargeability of income  tax liability did not qualify 
for
innocent spouse relief under Section  6015(b), but she did qualify for 
limited
liability under Section 6015(c)),  with In re Hinckley, 256 B.R. 814 
(Bankr. M.D.
Fla. 2000)(finding the  debtor-wife entitled to "innocent spouse" relief 
from
liability for a joint  tax debt arising from a jointly filed return, on 
theory
that she had been  "coerced" into signing returns that failed to report 
certain
pension benefits  as income).
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - -  - - -3   
Section
6015(b) provides procedures for relief from  liability applicable to all 
joint
filers as  follows:
(1) In general.-Under procedures prescribed by  the Secretary, if-
(A) a joint  return has been made for a taxable year;
(B) on such return there is an understatement of tax  attributable
to erroneous items of one individual filing  the joint return;
(C) the other  individual filing the joint return establishes that
in  signing the return he or she did not know, and had no reason to
know, that there was such understatement;
(D) taking into account all the facts and  circumstances, it is
inequitable to hold the other  individual liable for the deficiency in
tax for such  taxable year attributable to such understatement; and
(E) the other individual elects (in such form as the Secretary  may
prescribe) the benefits of this subsection not later  than the date
which is 2 years after the date the  Secretary has begun collection
activities with respect to  the individual making the election,
then the other individual shall be relieved of liability for  tax
(including interest, penalties, and other amounts)  for such taxable
year to the extent such liability is  attributable to such
understatement.
26 U.S.C.  Â§ 6015(b)(1).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - -  -
Federal tax courts addressing joint and several tax  liability under the IRC
often consider the innocent spouse exception. See,  e.g., Nihiser v. 
C.I.R., T.C.
Memo 2008-135, 2008 WL 2120983 (Tax Ct. May 20,  2008) (granting innocent 
spouse
joint tax liability relief to stay-at-home  mom due to husband's actions);
Clarke-Lewis v. C.I.R., T.C. Summ. Op.  2008-14, 2008 WL 360715 (Tax Ct. 
Feb. 11,
2008 )(denying  relief due to  spouse's written agreement to assume the 
joint  tax
liability).
Under New York law, taxpayers who  file joint returns are jointly and
severally liable for the taxes owed. See  N.Y. Tax Law § 651 (McKinney 
1999).
Either spouse may seek to employ the  exceptions and limitations to this 
joint
and several liability available  under IRC Section 6015. See N.Y. Tax Law § 
654
(McKinney 1999)(making  provisions of IRC § 6015 applicable for jointly 
filed
state income tax  returns). Other states haves similar provisions. See, 
e.g., In
re James, 308  B.R. 569, 570-72 (Bankr. S.D. Ala. 2002)(applying Alabama tax
code, which  paralleled IRC, and denying innocent spouse relief to a debtor
claiming she  did not contribute income to the jointly filed return 
assessing  tax
liability).
Under the Bankruptcy Code, because  spouses have joint and several liability
for the taxes due under joint  returns, neither spouse has an allowable 
claim for
subrogation against the  other for taxes paid, but may assert a contribution
claim for one-half of the  sum paid to the taxing authorities. See 11 
U.S.C. §§
502, 509; see also In re  Schuler, 354 B.R. 37, 41-42 (Bankr. W.D.N.Y. 2006)
(discussing theories of  subrogation and contribution under the Bankruptcy 
Code
and New York law). The  Schuler court addressed these issues with respect 
to a
deceased debtor's wife  who sought reimbursement from the debtor's estate 
for the
full amount she  paid toward the couple's joint tax liability. In re 
Schuler, 354
B.R. at 41.  The court found that the debtor's wife should have asserted her
innocent  spouse defense to the taxing authorities prior to paying the 
obligation
in  full, and stated that the court "must apply the outcome [she] accepted 
in  her
dealings with the Internal Revenue Service." Id. The court further found  
the
debtor's wife had no right to subrogation and could only recover one-half  
of the
taxes she paid as a claim against the debtor's estate. Id. at  41-42.
Under the IRC, spouses filing joint returns  share the burden of the tax
liability, regardless of who generates the  taxable income. Moreover, 
spouses may
file jointly "even though one of the  spouses has neither gross income nor
deductions." IRC § 6013(a). Federal tax  law provides a mechanism for one 
spouse
to reduce or eliminate their joint  and several tax liability under 
established
IRC law and procedures. New York  tax law mirrors federal tax law on these
issues. Federal bankruptcy law  provides that neither spouse can assert a
subrogation claim against the other  in a bankruptcy case for any paid 
taxes, but
one spouse can assert a  contribution claim for one-half of the sum that 
has been
paid to the taxing  authorities. Given these principles, it seems entirely
consistent for spouses  who file joint returns to share equally in any tax 
refund
return, regardless  of who earned how much of the taxable income, and 
regardless
of who generated  the claimed deductions. Thus, any tax refund presumptively
belongs to the  spouses equally. This outcome is consistent with Section 
541(a)
of the  Bankruptcy Code, Sections 6013 and 6015 of the IRC, and Section 236 
of
New  York Domestic Relations Law. However, the Trustee may rebut this  
presumption
if, had the taxes not been paid, the non-debtor spouse could have  limited 
or
avoided liability under the innocent spouse exception to the tax  liability 
under
Section 6015(b) of the IRC, or could have qualified for  limited liability 
under
Section 6015(c) for taxpayers no longer married or  taxpayers legally 
separated
or not living  together.
Conclusion
This case presented an  issue of first impression in this district, and this
Court's  analysis  is also one of first impression. This Court recognizes 
the
briefing and  submissions of the parties addressed the 50/50 Rule and 
whether it
should be  adopted by this Court. Therefore, the parties should be afforded 
 the
opportunity to submit any further submissions on whether the Debtor or  Ms. 
Spina
could have avoided or reduced liability for the taxes owed on the  2008 tax
returns at issue, if those taxes had not been paid. Any supplemental  
submissions
shall be due twenty (20) days from entry of this opinion. Absent  further
briefing, this Court will enter an order directing Debtor to turn $  
1,568.00
over to the Trustee.
Dated: September 24, 2009
Central  Islip, New York
/s/ Alan S.  Trust
Alan S. Trust
United  States Bankruptcy Judge
September 24, 2009, Decided

COUNSEL:  APPEARANCES:
Richard F. Artura, Esq., Phillips, Weiner, Artura & Cox,  Lindenhurst, New York.
Kenneth Kirschenbaum, Esq., Kirschenbaum &  Kirschenbaum, Garden City, New York.
JUDGES: Alan S. Trust, United States  Bankruptcy Judge.
OPINION BY: Alan S.  Trust
OPINION

MEMORANDUM OPINION REGARDING TURNOVER OF TAX  REFUND
Issues Before the Court and Summary of  Decision
Pending before the Court is the Motion to  Turnover Property Under Section521(a)(4) ("Motion") filed by the chapter 7  Trustee Kenneth Kirschenbaum("Trustee"). At issue are refunds of prepetition  federal and state income taxespaid by Debtor and his non-debtor spouse. The  aggregate amount of the refunds is$ 8,136.00. The Trustee has requested that  this Court direct the Debtor to turnover $ 5,636.00 as the nonexempt portion  of the tax refunds. Debtor asserts thathis non-debtor spouse is entitled to  half of the refunds, and that the amount ofthe refunds to which the Trustee  is entitled is one half of $ 8,136.00 less the$ 2,500.00 exemption allowable  to Debtor, for a total amount to be turned overof $  1,568.00.
For the reasons herein, but not for the  reasons argued by either side, theCourt agrees with  Debtor.
Jurisdiction
This Court has jurisdiction  over this core proceeding pursuant to 28 U.S.C.§§ 157(b)(2)(A), (B), (E) and  (O), and 1334(b), and the Standing Order ofReference in effect in the  Eastern District of New York.
Procedural  History
On February 28, 2009, Debtor filed a voluntary  petition for relief underChapter 7 of the United States Bankruptcy Code  ("Petition Date"). Debtor filed,inter alia, his Schedules and Statement of  Financial Affairs ("SOFA"). [dkt item1] In his Schedule B, Debtor disclosed  an "Anticipated Tax Refund" in the amountof $ 5,500.00, which he listed as  jointly owned with his wife. In his ScheduleC, Debtor then claimed an  exemption in $ 2,500.00 of the anticipated refund,pursuant to New York  Debtor and Creditor Law Section 283. N.Y. DEBT. & CRED. LAW§ 283  (McKinney 2009). The tax refunds arise from tax returns filed for year2008,  which returns were filed and for which the associated taxes were paidprior  to the Petition Date.
On May 18, 2009, the Trustee  filed the Motion. [dkt item 18]
On May 22, 2009, the  Debtor filed his Opposition to the Motion, in which hestates that "he earns  100% of the family income." [dkt item 19]
On June 16,  2009, the Trustee filed a Reply. [dkt item 23]
This  Court held a hearing on the Motion on June 23, 2009. At the hearing,  theparties agreed that, although the issue of refunds of prepetition taxes  has beenraised in prior cases before this Court, and opinions on this issue  have beenwritten in other districts, this is an issue of first impression  because thereare no published opinions from the Eastern District of New York  or bindingdecisions from the Second Circuit Court of Appeals. The parties  also agreed thatthe facts are not in controversy as to which spouse is and  has been the wageearner at all times relevant to the Motion, and agreed that  this matter could beresolved on submissions, without an evidentiary  hearing.
The Court directed the parties to submit  briefing and supplementalsubmissions focusing on the applicability of the  50/50 ownership rule, asdescribed infra. Any additional briefing and  evidence was to be submitted to theCourt by July 1, 2009, at which time this  matter would be deemed undersubmission.
On June 26,  2009, Debtor filed a post-hearing submission. [dkt item 25] Thatsubmission  provides, in pertinent part, as follows:

My wife, Madeline Spina, and I have a joint personal  checkingaccount with Capital One Bank. See attached  statement.
Madeline Spina and I  have been married for twelve (12) years andare the  parents of five year old twins. We own our house together, wefile joint income tax returns, share our cars, and in all respect  havecombined household income and expenses with me being  the wage earnerand my wife being the  homemaker.

[dkt item 25, PP 2,3]
The Trustee  did not file additional briefing or submissions.
Legal  Analysis
This Court must determine how to allocate  refunds of income taxes paid priorto the petition date as between a debtor  and a non-debtor spouse. The Trustee isentitled to turn over of the debtor's  non-exempt portion of the tax refunds, butnot to the non-debtor spouse's  portion, as the non-debtor's portion is notproperty of the bankruptcy  estate. The Trustee asserts  that the tax refunds areproperty of the  estate under Section 541 of the Bankruptcy Code, and that theDebtor is  obligated to turn over the full amount, less any allowable exemption,under  Sections 521 and 541. The Debtor asserts that his non-debtor spouse  isentitled to half of the refunds, and that this Court should adopt  thepresumptive "50/50 ownership rule" ("50/50 Rule") discussed in In re  Marciano,372 B.R. 211 (Bankr. S.D.N.Y. 2007), and limit the estate's  interest to one-halfof the refund, less the Debtor's $ 2,500.00 exempt  portion.
When, as here, a debtor and non-debtor spouse  file joint tax returns, and thedebtor earns the substantial portion or even  the entirety of the marriedcouple's taxable income, there is a split of  authority among bankruptcy courtsregarding how to allocate the refund as  between the spouses, and, therefore, asbetween the estate and the non-debtor  spouse. As discussed below, threedifferent lines of cases have developed on  this issue. However, the analysis inall of these cases begins with Section  541(a)(1) of the Bankruptcy Code, whichbroadly defines property of the  estate as, "all legal and equitable interests ofthe debtor in property as of  the commencement" of the bankruptcy proceedings. 11U.S.C. § 541(a)(1). Under  Section 541(a)(1), "a tax refund that is receivedpost-petition is property  of the estate if it is attributable to wages earnedand withholding payments  made during prepetition years." Carlson v. Moratzka (Inre Carlson), 394 B.R.  491, 493 (8th Cir. B.A.P. 2008) (citing In re Benn, 491F.3d 811, 813 (8th  Cir. 2007)). 1
- - - - - - - - - - - - - - Footnotes - - - - - - - - - -  - - - - -1   TheBankruptcy Code also includes as property of  the bankruptcy estate, "allinterests of the debtor and the debtor's spouse  in community property as of thecommencement of the case that is under the  sole, equal, or joint management andcontrol of the debtor." 11 U.S.C. §  541(a)(2)(A). However, because New York isnot a community property state,  this opinion does not address any possibleissues arising under §  541(a)(2)(A).- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - -  -
The three lines of analysis which have developed are  referred to as: thewithholding rule; the income rule; and the 50/50 Rule  referenced above. Each ofthese approaches analyzes Section 541(a), and also  looks to applicable state lawto determine how the tax refund would be  apportioned between the spouses outsideof  bankruptcy.
The majority of courts follows the  withholding rule, which, as the EighthCircuit's Bankruptcy Appellate Panel  stated in Carlson, "allocates the joint taxrefund between the spouses in  proportion to their respective tax withholding."In re Carlson, 394 B.R. at  494(citing In re Kleinfeldt, 287 B.R. 291, 292 (10thCir. B.A.P. 2002)).  According to the withholding rule, a non-debtor spouse mayhave been employed  but not have generated any withheld taxes, and, therefore,would have no  right to any withheld taxes which are repaid to the taxpayer. Inre  Kleinfeldt, 287 B.R. at 293.
In comparison, the income  approach divides the refund according to the incomegenerated by each spouse.  In re Carlson, 394 B.R. at 494. This view, also knownas the "Proportionate  Income Rule," allocates the tax refund as a directpercentage of the earnings  of the spouses.
The third approach, the 50/50 Rule,  represents the minority view, and hasbeen followed by the bankruptcy courts  in both the Southern and WesternDistricts of New York. See, e.g., In re  Marciano, 372 B.R. 211 (Bankr. S.D.N.Y.2007); In re Barrow, 306 B.R. 28  (Bankr. W.D.N.Y. 2004). The 50/50 Rule appliesNew York state matrimonial law  to first establish each  spouse's rights tomarital property, and then  considers what the division of marital property, suchas a tax refund, would  be in a divorce proceeding. The 50/50 Rule creates arebuttable presumption  that each spouse contributed equally to the household,including nonmonetary  contributions, and, therefore, the refund should bedivided equally between  the spouses. This presumption exists regardless of thetaxable earnings of  the spouses, and regardless of the source of the taxableincome or tax  withholding. As noted, however, the 50/50 rule creates a"rebuttable  presumption of equal ownership to any joint tax refund." In reMarciano, 372  B.R. at 214 (citing In re Barrow, 306 B.R. at 31). To overcome  thepresumption, evidence must be presented that the "couple's 'present  conduct orhistory of financial management' suggests separate financial  affairs." Id.
To depart from the presumption of equal  ownership, a court following the50/50 Rule would analyze several factors  from a married couple's history offinancial management, which may  include:

Whether the monthly  bills of the debtors' are paid out of jointaccounts;  Whether the debtor considers the responsibility for payingthe household bills to be a joint responsibility; Whether the  accountsof the debtor and non-debtor spouse have always  been held jointly;Whether the debtor and non-debtor  spouse have ever held individualaccounts at any point  during the marriage; Whether both husband andwife have  equal access to funds in accounts; Whether their joint taxrefunds have always been deposited into joint checking accounts  withboth debtors having full access to the funds; and  the purpose or useto which the tax refunds have  traditionally been applied (e.g., forhousehold expenses  or educational expenses for their children).

In re Hejmowski, 296  B.R. 645, 650 (Bankr. W.D.N.Y. 2003); see also Marciano,372 B.R. at 217  (utilizing these factors to determine that the debtor's courseof conduct  with regard to the marital assets did not overcome the 50/50  Rulepresumption); In re Barrow, 306 B.R. at 31(using the same analysis to  determinethe refund should be divided  equally).
Both the Marciano and Barrow courts referred  to New York matrimonial law forguidance. Under Section 236 of the New York  Domestic Relations Law, any propertyacquired during a marriage is owned  equally by the spouses in an "economicpartnership," and is thus available  for equitable distribution upon dissolutionof the union. N.Y. Dom. REL. LAW  Â§ 236 (McKinney 2009); see also Musso v.Ostashko, 468 F.3d 99, 102 (2d. Cir.  2006); Marciano, 372 B.R. at 215. Under NewYork law, "as a general rule, the  refund on a joint tax return is a joint assetthat spouses own 'in equal  shares'. . . [and u]nder the current tax code, [acourt] simply cannot assume  that any refund represents income for one spouse orthe other." Marciano, 372  B.R. at 216 (quoting Barrow, 306 B.R. at 31).Consequently, under the 50/50  Rule, "an income tax refund should be splitequally between spouses for  purposes of allocating property of the estatepursuant to 11 U.S.C. § 541."  Marciano, 372 B.R. at 216.
A Different Approach to the Division of Tax  Refunds
This Court has determined that a different  approach should be taken to thetax refund analysis which harmonizes  applicable tax, bankruptcy, and statemarital property law. In this Court's  view, spouses filing joint returns whoequally share the liability for  payment of the taxes should equally share thebenefit of any tax  refund.
This Court begins its analysis with Section  6013 of Title 26 of the UnitedStates Code, the Internal Revenue Code  ("IRC"), which governs the filing ofjoint tax returns:

6013. Joint returns of income tax by husband and  wife:
(a) Joint returns.--A husband  and wife may make a single returnjointly of income taxes  under subtitle A, even though one of thespouses has  neither gross income nor deductions[.]

26 U.S.C. § 6013(a)(emphasis  supplied). When spouses file a joint return,subsection (d)(3) of Section  6013 creates joint and several liability for thetaxes due. 2 Married couples  who decide to file jointly may do so for any numberof reasons, including  receiving the economic value of any tax benefits derivedfrom filing  jointly.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - -  - -2Specifically, the subsection provides:
(d)  Special rules.--For purposes of this section-
(3) if a  joint return is made, the tax shall be computed on the aggregateincome and  the liability with respect to the tax shall be joint and  several.
26 U.S.C.A. § 6013(d)(3).- - - - - - - - -  - - - End Footnotes- - - - - - - - - - - - - -
The IRC  does provide statutory relief from the joint and several liabilityprovision  of Section 6013(d)(3). A spouse may be relieved from liability  underprocedures established for what has come to be referred to as the  innocentspouse exception, as established under Section 6015(b). 3 In  addition, taxpayerswho are no longer married or are legally separated may  apply for relief underSection 6015(c). Compare Shafman v. U.S. Dep't of the  Treasury (In re Shafman),267 B.R. 709, 714-717 (Bankr. N.D. W. Va.  2001)(finding that debtor seekingdetermination of dischargeability of income  tax liability did not qualify forinnocent spouse relief under Section  6015(b), but she did qualify for limitedliability under Section 6015(c)),  with In re Hinckley, 256 B.R. 814 (Bankr. M.D.Fla. 2000)(finding the  debtor-wife entitled to "innocent spouse" relief fromliability for a joint  tax debt arising from a jointly filed return, on theorythat she had been  "coerced" into signing returns that failed to report certainpension benefits  as income).
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - -  - - -3   Section6015(b) provides procedures for relief from  liability applicable to all jointfilers as  follows:
(1) In general.-Under procedures prescribed by  the Secretary, if-

(A) a joint  return has been made for a taxable year;
(B) on such return there is an understatement of tax  attributableto erroneous items of one individual filing  the joint return;
(C) the other  individual filing the joint return establishes thatin  signing the return he or she did not know, and had no reason toknow, that there was such understatement;
(D) taking into account all the facts and  circumstances, it isinequitable to hold the other  individual liable for the deficiency intax for such  taxable year attributable to such understatement; and
(E) the other individual elects (in such form as the Secretary  mayprescribe) the benefits of this subsection not later  than the datewhich is 2 years after the date the  Secretary has begun collectionactivities with respect to  the individual making the election,
then the other individual shall be relieved of liability for  tax(including interest, penalties, and other amounts)  for such taxableyear to the extent such liability is  attributable to suchunderstatement.

26 U.S.C.  Â§ 6015(b)(1).- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - -  -
Federal tax courts addressing joint and several tax  liability under the IRCoften consider the innocent spouse exception. See,  e.g., Nihiser v. C.I.R., T.C.Memo 2008-135, 2008 WL 2120983 (Tax Ct. May 20,  2008) (granting innocent spousejoint tax liability relief to stay-at-home  mom due to husband's actions);Clarke-Lewis v. C.I.R., T.C. Summ. Op.  2008-14, 2008 WL 360715 (Tax Ct. Feb. 11,2008 )(denying  relief due to  spouse's written agreement to assume the joint  taxliability).
Under New York law, taxpayers who  file joint returns are jointly andseverally liable for the taxes owed. See  N.Y. Tax Law § 651 (McKinney 1999).Either spouse may seek to employ the  exceptions and limitations to this jointand several liability available  under IRC Section 6015. See N.Y. Tax Law § 654(McKinney 1999)(making  provisions of IRC § 6015 applicable for jointly filedstate income tax  returns). Other states haves similar provisions. See, e.g., Inre James, 308  B.R. 569, 570-72 (Bankr. S.D. Ala. 2002)(applying Alabama taxcode, which  paralleled IRC, and denying innocent spouse relief to a debtorclaiming she  did not contribute income to the jointly filed return assessing  taxliability).
Under the Bankruptcy Code, because  spouses have joint and several liabilityfor the taxes due under joint  returns, neither spouse has an allowable claim forsubrogation against the  other for taxes paid, but may assert a contributionclaim for one-half of the  sum paid to the taxing authorities. See 11 U.S.C. §§502, 509; see also In re  Schuler, 354 B.R. 37, 41-42 (Bankr. W.D.N.Y. 2006)(discussing theories of  subrogation and contribution under the Bankruptcy Codeand New York law). The  Schuler court addressed these issues with respect to adeceased debtor's wife  who sought reimbursement from the debtor's estate for thefull amount she  paid toward the couple's joint tax liability. In re Schuler, 354B.R. at 41.  The court found that the debtor's wife should have asserted herinnocent  spouse defense to the taxing authorities prior to paying the obligationin  full, and stated that the court "must apply the outcome [she] accepted in  herdealings with the Internal Revenue Service." Id. The court further found  thedebtor's wife had no right to subrogation and could only recover one-half  of thetaxes she paid as a claim against the debtor's estate. Id. at  41-42.
Under the IRC, spouses filing joint returns  share the burden of the taxliability, regardless of who generates the  taxable income. Moreover, spouses mayfile jointly "even though one of the  spouses has neither gross income nordeductions." IRC § 6013(a). Federal tax  law provides a mechanism for one spouseto reduce or eliminate their joint  and several tax liability under establishedIRC law and procedures. New York  tax law mirrors federal tax law on theseissues. Federal bankruptcy law  provides that neither spouse can assert asubrogation claim against the other  in a bankruptcy case for any paid taxes, butone spouse can assert a  contribution claim for one-half of the sum that has beenpaid to the taxing  authorities. Given these principles, it seems entirelyconsistent for spouses  who file joint returns to share equally in any tax refundreturn, regardless  of who earned how much of the taxable income, and regardlessof who generated  the claimed deductions. Thus, any tax refund presumptivelybelongs to the  spouses equally. This outcome is consistent with Section 541(a)of the  Bankruptcy Code, Sections 6013 and 6015 of the IRC, and Section 236 ofNew  York Domestic Relations Law. However, the Trustee may rebut this  presumptionif, had the taxes not been paid, the non-debtor spouse could have  limited oravoided liability under the innocent spouse exception to the tax  liability underSection 6015(b) of the IRC, or could have qualified for  limited liability underSection 6015(c) for taxpayers no longer married or  taxpayers legally separatedor not living  together.
Conclusion
This case presented an  issue of first impression in this district, and thisCourt's  analysis  is also one of first impression. This Court recognizes thebriefing and  submissions of the parties addressed the 50/50 Rule and whether itshould be  adopted by this Court. Therefore, the parties should be afforded  theopportunity to submit any further submissions on whether the Debtor or  Ms. Spinacould have avoided or reduced liability for the taxes owed on the  2008 taxreturns at issue, if those taxes had not been paid. Any supplemental  submissionsshall be due twenty (20) days from entry of this opinion. Absent  furtherbriefing, this Court will enter an order directing Debtor to turn $  1,568.00over to the Trustee.
Dated: September 24, 2009
Central  Islip, New York
/s/ Alan S.  Trust
Alan S. Trust
United  States Bankruptcy Judge