T.C. Memo. 2003-282
UNITED STATES TAX COURT
ZENOBIA ELISIA CLARY ZIEGLER, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7435-02. Filed October 2, 2003.
Dean E. Wanderer, for petitioner.
Nancy C. Carver, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
MARVEL, Judge: This case arises from a request for relief
under section 60151 with respect to petitioner’s 1998 taxable
year. The issue for decision is whether respondent abused his
1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect at all relevant times.
Monetary amounts are rounded to the nearest dollar.
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discretion in denying petitioner relief under section 6015(f) for
the taxable year 1998.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts is incorporated herein by this
reference. Petitioner resided in Lake Ridge, Virginia, when she
filed the petition in this case.
Petitioner was married to John L. Ziegler, Jr. (Mr.
Ziegler), from 1990 until March 7, 2000. Petitioner separated
from Mr. Ziegler in February 1999. Petitioner earned her
bachelor’s degree from Virginia State University. During 1998,
petitioner was employed by the Commonwealth of Virginia and
Suffolk County Schools, and Mr. Ziegler was employed as a U.S.
Marshal.
Petitioner and Mr. Ziegler filed electronic joint Federal
income tax returns for 1995, 1996, and 1997. In anticipation of
filing a joint return with Mr. Ziegler for 1998, petitioner gave
Mr. Ziegler her 1998 W-2, Wage and Tax Statements, which showed
taxable income of $1,159 from Suffolk Public Schools and $1,680
from the Commonwealth of Virginia. Mr. Ziegler subsequently
returned the W-2 statements to petitioner and informed her that
he would file a separate income tax return because petitioner did
not make enough money to require the filing of a return.
However, without petitioner’s knowledge, Mr. Ziegler arranged for
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H&R Block to prepare and electronically file a joint return for
1998 that claimed an overpayment to be refunded of $7,457.
Although Form 8453, U.S. Individual Income Tax Declaration for
Electronic Filing, which was submitted to respondent with respect
to the 1998 joint return, contained what purported to be the
signatures of Mr. Ziegler and petitioner, petitioner did not sign
the Form 8453. The 1998 joint return reported the earned income
of Mr. Ziegler in the amount of $92,393 but did not include
petitioner’s earned income.
On or about March 8, 1999, respondent issued to petitioner
and Mr. Ziegler a refund check in the amount of $7,457 on the
basis of the refund claim made on the 1998 joint return.
Petitioner discovered the refund check when she stopped at Mr.
Ziegler’s residence to retrieve mail, and she realized then that
he must have filed a joint return for 1998. At Mr. Ziegler’s
request, petitioner deposited the refund check into Mr. Ziegler’s
individual bank account. Before depositing the check, petitioner
obtained a copy of the 1998 return from H&R Block and reviewed
it.
Petitioner did not live with Mr. Ziegler after they
separated in 1999, and he did not pay any of her bills.
Petitioner did not receive any part of the refund check issued
with respect to the 1998 joint return.
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Respondent sent petitioner and Mr. Ziegler a notice of
deficiency, dated May 22, 2000, in which respondent determined
that petitioner and Mr. Ziegler were liable for an income tax
deficiency of $798 for 1998. The deficiency was based solely on
petitioner’s unreported W-2 income of $2,839. Respondent
assessed the deficiency in June 2000.
Petitioner contacted respondent in July 2000 after receiving
collection notices regarding the assessment of the liability for
1998. In October 2000, pursuant to advice from one of
respondent’s employees, petitioner filed a “married filing
separate” return for 1998 reporting her taxable income of $2,839.
Respondent initially processed the 1998 married filing separate
return but later reversed the transaction because of respondent’s
position that petitioner already had filed a valid joint 1998
return. On March 12, 2001, respondent applied an overpayment of
$923 from petitioner’s 2000 taxable year to the unpaid balance of
the 1998 assessment, paying it in full.
On March 19, 2001, petitioner contacted the local Taxpayer
Advocate’s Office in Richmond, Virginia, to request assistance
with the 1998 assessment. Petitioner was dissatisfied with the
response from the local office and contacted the National
Taxpayer Advocate’s Office, which explained to petitioner the
reasons she was not entitled to relief.
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On July 26, 2001, petitioner filed a Form 8857, Request for
Innocent Spouse Relief, for 1998 requesting a refund of $923.
On February 28, 2002, respondent sent petitioner a preliminary
denial of her request for relief pursuant to section 6015(f),
because the liability had been paid in full before petitioner
filed her claim. On March 12, 2002, petitioner filed a Statement
of Disagreement regarding the denial of her request for relief.
On March 28, 2002, respondent issued a final notice denying
petitioner relief from the 1998 joint liability. Respondent’s
denial rested solely upon Rev. Proc. 2000-15, sec. 4.01(4), 2000-
1 C.B. 447, 448, which requires, with certain exceptions, that
the disputed tax liability must remain unpaid in order for the
Internal Revenue Service (IRS) to consider a request for
equitable relief under section 6015(f). In denying petitioner
relief under section 6015(f), respondent did not consider all of
the factors set forth in Rev. Proc. 2000-15, supra. Petitioner
timely filed a petition seeking redetermination of respondent’s
denial of relief from joint liability for 1998.2 A trial was
held on December 3, 2002.
On April 21, 2003, we filed our opinion in Washington v.
Commissioner, 120 T.C. 137 (2003), in which we held that section
6015 applies to the full amount of any preexisting tax liability
2
Petitioner’s ex-husband, Mr. Ziegler, died on May 10, 2002,
before respondent notified him of these proceedings.
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for a particular taxable year, if any of that liability remains
unpaid as of July 22, 1998, and not just to portions of the tax
liability that remain unpaid after July 22, 1998, the date of
enactment of the Internal Revenue Service Restructuring and
Reform Act of 1998 (RRA 1998), Pub. L. 105-206, sec. 3201(g)(1),
112 Stat. 740. In so doing, we emphasized that “Section 6015
applies ‘to any liability for tax arising after the date of the
enactment of this Act [July 22, 1998] and any liability for tax
arising on or before such date but remaining unpaid as of such
date.’” Washington v. Commissioner, supra at 154 (quoting RRA
1998 sec. 3201(g)). We held that section 6015(g) permits a
refund where relief from liability is granted under section
6015(f) and rejected the Commissioner’s argument that the
reference to “unpaid tax” contained in section 6015(f) operates
to restrict relief under section 6015(f) to the portion of the
tax liability in question that remained unpaid as of July 22,
1998. Id. at 159.
On May 14, 2003, we issued an order remanding this case to
respondent to reconsider petitioner’s application for relief in
light of our opinion in Washington and to report to us regarding
the result of that reconsideration. Pursuant to our order,
respondent issued a determination dated July 3, 2003, concluding
that petitioner did not qualify for relief under section 6015(f)
and Rev. Proc. 2000-15, supra. On August 7, 2003, the parties
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submitted a joint status report requesting that respondent’s
determination of July 3, 2003, be made part of the record in this
case. In that report, petitioner stated that she does not agree
with the conclusions reached in respondent’s July 3, 2003,
determination, and the parties agreed that no further trial
proceedings are needed to supplement the record in this case.
OPINION
Generally, taxpayers filing a joint Federal income tax
return are each responsible for the accuracy of their return and
are jointly and severally liable for the full tax liability.
Sec. 6013(d)(3); Butler v. Commissioner, 114 T.C. 276, 282
(2000). However, in certain circumstances, a taxpayer may obtain
relief from joint and several liability under section 6015.3
The relief afforded by section 6015(f) is available only to
a taxpayer who filed a joint Federal income tax return for the
year at issue. Raymond v. Commissioner, 119 T.C. 191 (2002);
see also Rev. Proc. 2000-15, 2000-1 C.B. 447. In this case,
petitioner argues that she is entitled to relief under section
6015(f) from joint and several liability arising from the filing
of the 1998 joint return, but she also argues that she did not
file a joint return for 1998. Although petitioner was aware that
3
Sec. 6015 applies to tax liabilities arising after July 22,
1998, and to tax liabilities arising on or before July 22, 1998,
but remaining unpaid as of such date. Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, sec.
3201(g), 112 Stat. 740.
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she could request relief under section 6015(f) only if she had
filed a joint return for 1998, petitioner, through her counsel,
did not clearly state during trial that she conceded the joint
return issue. However, we shall assume, for purposes of our
analysis, that petitioner has effectively conceded that she filed
or ratified the filing of a joint return for 1998 because she
continues to assert she is entitled to relief under section
6015(f).4
Our jurisdiction to review petitioner’s claim for relief is
conferred by section 6015(e). This provision allows a spouse who
has requested relief from joint and several liability to contest
the Commissioner's denial of relief or to contest the
4
The failure of one spouse to sign an income tax return
before its filing does not necessarily mean that the return is
not a joint return. Heim v. Commissioner, 27 T.C. 270 (1956),
affd. 251 F.2d 44 (8th Cir. 1958). The determinative factor in
deciding whether a filed return qualifies as a joint return is
whether a husband and wife intended to file a joint return.
Stone v. Commissioner, 22 T.C. 893 (1954). We have held that
where a husband filed a joint return with no objection from his
wife, who failed to file her own return, a presumption arises
that the joint return was filed with the tacit approval of the
wife. Heim v. Commissioner, supra at 273; see also Carroro v.
Commissioner, 29 B.T.A. 646, 650 (1933).
In this case, petitioner knew that Mr. Ziegler had filed a
joint return for 1998 when she saw the refund check issued in
both of their names. She subsequently obtained a copy of the
filed return and, knowing that her husband had filed a joint
return for 1998, took the joint refund check and deposited it
into her husband’s account. But she made no effort to verify
that the joint return included her earned income or to file a
separate return reporting her earned income until July 2000 when
she started to receive collection notices from respondent for the
1998 deficiency assessment.
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Commissioner's failure to make a timely determination, by filing
a timely petition in this Court. Sec. 6015(e). These cases are
referred to as “stand alone” cases because they are independent
of any deficiency proceeding. Sec. 6015(e)(1); Mora v.
Commissioner, 117 T.C. 279 (2001); Fernandez v. Commissioner, 114
T.C. 324, 329 (2000).
In this stand alone case, petitioner relies upon section
6015(f) which authorizes respondent to grant equitable relief to
those taxpayers who do not otherwise meet the requirements of
section 6015(b) or (c) but who satisfy the requirements of
section 6015(f)(1) and (2). Section 6015(f) provides:
SEC. 6015(f). Equitable Relief.–-Under procedures
prescribed by the Secretary, if–-
(1) taking into account all the facts
and circumstances, it is inequitable to hold
the individual liable for any unpaid tax or
any deficiency (or any portion of either);
and
(2) relief is not available to such
individual under subsection (b) or (c),
the Secretary may relieve such individual of such
liability.
The parties agree that petitioner is not eligible for relief
under either section 6015(b) or (c).5 Sec. 6015(f)(2). The
5
In pertinent part, sec. 6015(b) provides relief from joint
and several liability for an electing spouse who has filed a
joint return that contains an understatement of tax attributable
to the spouse not seeking relief. Sec. 6015(b)(1). Sec. 6015(c)
provides relief from a joint deficiency for taxpayers who are
(continued...)
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parties disagree, however, regarding whether it is inequitable to
hold petitioner liable for the 1998 deficiency assessment, taking
into account all of the relevant facts and circumstances. Sec.
6015(f)(1). Consequently, we must decide whether respondent
abused his discretion in determining that petitioner was not
entitled to relief under section 6015(f).6 Cheshire v.
Commissioner, 115 T.C. 183, 198 (2000), affd. 282 F.3d 326 (5th
Cir. 2002); Butler v. Commissioner, supra at 291-292.
Pursuant to section 6015(f), the Commissioner has prescribed
procedures in Rev. Proc. 2000-15, supra, that are to be used in
determining whether an individual qualifies for relief under that
section.7 Rev. Proc. 2000-15, sec. 4.01, lists seven threshold
conditions that must be satisfied before the IRS will consider a
request for relief under section 6015(f). Subsequent to our May
14, 2003, order, respondent eliminated Rev. Proc. 2000-15, sec.
4.01(4), as a threshold condition for relief in this case.
Respondent concedes that the remaining threshold conditions are
satisfied in this case.
5
(...continued)
divorced, legally separated, or otherwise living apart. Refunds
are not available under section 6015(c). Sec. 6015(g)(3).
6
We consider respondent’s July 3, 2003, determination as the
final determination in this case.
7
On Aug. 11, 2003, the Commissioner issued Rev. Proc. 2003-
61, 2003-32 I.R.B. 296, which supersedes Rev. Proc. 2000-15,
2000-1 C.B. 447, effective for requests for relief filed on or
after Nov. 1, 2003.
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Where, as here, the requesting spouse satisfies the
threshold conditions set forth in Rev. Proc. 2000-15, sec. 4.01,
Rev. Proc. 2000-15, sec. 4.03, 2000-1 C.B. at 448, provides that
equitable relief may be granted under section 6015(f) if, taking
into account all facts and circumstances, it is inequitable to
hold the requesting spouse liable. Rev. Proc. 2000-15, sec.
4.03(1), 2000-1 C.B. at 448-449, lists the following six factors
that the Commissioner will consider as weighing in favor of
granting relief for the liability (positive factors): (1) The
requesting spouse is separated or divorced from the nonrequesting
spouse; (2) the requesting spouse would suffer economic hardship
if relief is denied; (3) the requesting spouse was abused by the
nonrequesting spouse; (4) the requesting spouse did not know or
have reason to know of the items giving rise to the deficiency;
(5) the nonrequesting spouse has a legal obligation pursuant to a
divorce decree or agreement to pay the liability; and (6) the
liability is solely attributable to the nonrequesting spouse.
Rev. Proc. 2000-15, sec. 4.03(2), 2000-1 C.B. at 449, lists the
following six factors that the Commissioner will consider as
weighing against granting relief for the liability (negative
factors): (1) The unpaid liability is attributable to the
requesting spouse; (2) the requesting spouse knew or had reason
to know of the item giving rise to the deficiency; (3) the
requesting spouse significantly benefited (beyond the normal
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support) from the unpaid liability; (4) the requesting spouse
will not experience economic hardship if relief is denied; (5)
the requesting spouse has not made a good-faith effort to comply
with Federal income tax laws in the tax years following the tax
year to which the request for relief relates; and (6) the
requesting spouse has a legal obligation pursuant to a divorce
decree or agreement to pay the liability. No single factor is
determinative in any particular case; all factors are to be
considered and weighed appropriately; and the list of factors is
not intended to be exhaustive. See Washington v. Commissioner,
120 T.C. at 148; Jonson v. Commissioner, 118 T.C. 106, 125
(2002).
Respondent argues that petitioner is not eligible for relief
under section 6015(f) because the negative factors in Rev. Proc.
2000-15, supra, outweigh the positive factors in that revenue
procedure. Respondent primarily relies on the following:
Petitioner will not suffer economic hardship if she is denied
relief; petitioner’s income is the sole basis for the deficiency;
and petitioner knew that her earned income was not included on
the 1998 joint return. On the basis of our review of the record
in this case, we agree with respondent.
The record is devoid of any evidence demonstrating that
petitioner will experience any economic hardship if relief from
the liability is not granted. Petitioner did not offer any proof
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of her income, expenses, assets, or liabilities, nor did she
offer any proof that her ability to sustain herself economically
had been jeopardized by the application of her 2000 income tax
refund to the 1998 liability.
Although petitioner testified that her husband was an
alcoholic and was verbally and emotionally abusive, respondent
points out that, at the time petitioner discovered that her
income had been omitted on the joint return, she was already
separated from her husband. Petitioner failed to file an amended
joint return, and she did not attempt to file a married filing
separate return for 1998 until she received collection notices.
The record establishes that petitioner knew or had reason to
know of the item giving rise to the deficiency because that item
consisted solely of her own income. She had actual knowledge or
reason to know that her income had been omitted when she received
a copy of the 1998 return from H&R Block.
Petitioner’s principal argument focuses on the inequities
of her situation. Petitioner testified that she was misled by
Mr. Ziegler regarding the need to report her earned income on the
1998 joint return that he prepared and filed on their behalf, and
she argues that she did not significantly benefit from the joint
refund issued for 1998. Although it appears from the sparse
record that petitioner was misled by Mr. Ziegler and that she did
not receive or directly benefit from the refund claimed on the
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1998 joint return, petitioner’s equitable argument is not enough
to overcome evidence that the omitted income was her earned
income and that she knew or had reason to know the income had
been omitted from the 1998 joint return. Petitioner’s equitable
argument is also insufficient to overcome a record devoid of any
evidence regarding economic hardship.
On the record before us, we find that petitioner has failed
to carry her burden of establishing that respondent abused his
discretion in denying her relief under section 6015(f).
To reflect the foregoing,
Decision will be entered
for respondent.