In 2023, the U.S. Supreme Court resolved a decades-long debate regarding the ability to discharge liability imputed upon a debtor for another person's fraudulent conduct. In Bartenwerfer v. Buckley, the Court held that the Bankruptcy Code prohibits discharge of any fraud liability-even when the debtor did not participate in the fraud but was married to and engaged in business with the person who did.

Scholars have long recognized the challenge of this type of business-partner imputed fraud liability in the context of a marital relationship. Creating a partnership merely requires intent of the parties to engage in business together, without any
required documentation or filing with the state. As such, determination of the existence of a partnership relies on a case-by-case determination to discern the true intention of the putative business partners. The marital context adds a new challenge to this determination, as couples frequently share money and help each other in ways that might be construed as a business partnership. The Bartenwerfer decision makes the determination more fraught with consequences, since the
non-defrauding business partner faces not only liability under state law but liability that cannot be discharged even in the last-resort option of bankruptcy.

Bankruptcy courts historically look at the state law standard for creation of a partnership, but the courts lack a clear set of guidelines to provide structure to the partnership determination. The tax courts and the Internal Revenue Service have faced similar issues in determining the tax liabilities and social security eligibility of spouses potentially engaged in business together, as well as in determining the existence of a business for tax-purposes. Though rooted in tax issues, the cases
start at the same place as any determination of a partnership: the intent of the parties to engage in business together. At the heart of these tax cases lie a trilogy of Supreme Court decisions from the mid-twentieth century and a more modern Supreme Court case. These decisions and rules outline factors to consider in finding the existence of a business, and they provide a more detailed framework for bankruptcy courts to determine the existence of a partnership among married couples or other family members. This article considers these cases to build a framework for determining liability and non-dischargeability in bankruptcy cases.