WASHINGTON (AP) -- The Supreme Court ruled Wednesday that the Internal Revenue Service can use a family's home to try to recover unpaid taxes from one spouse.
The court ruled 6-3 that Michigan, and other states, cannot protect the residences from IRS liens.
Justices ruled against Sandra Craft, whose husband, Don, paid no income taxes from 1979-86. The IRS pursued him for back taxes and put a lien on the family home. He transferred the house in Grand Rapids to his wife for $1, then filed for bankruptcy.
The IRS has the power to put liens on property that is shared by spouses, like the Craft's home, the court ruled.
The 6th U.S. Circuit Court of Appeals had sided with Sandra Craft, finding that her husband did not have a "separate interest" in the house, under the Michigan law.
Writing for the majority, Justice Sandra Day O'Connor said Congress allows the IRS to put liens on "all property and rights to property a taxpayer might have." She said that the IRS needs that power to pursue people who cheat on their taxes.
The case returns to the appeals court to consider the value of Don Craft's interest in the house.
Dissenting Justice Antonin Scalia said the court was ending a type of property ownership that protects stay-at-home mothers.
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