Magee v. Comm'r

T.C. Memo. 2005-263

UNITED STATES TAX COURT

DOROTHY ANN MAGEE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 5682-04L. Filed November 16, 2005.

P filed a petition for judicial review pursuant to
sec. 6330, I.R.C., in response to a determination by R
that levy action was appropriate for taxable year 1996.

Held: R’s determination to proceed with collection
action is sustained.

Held, further, under the facts and circumstances,
R’s denial of equitable relief under sec. 6015(f),
I.R.C., is sustained.

Dorothy Ann Magee, pro se.

Fred E. Green, Jr., for respondent.
 - 2 -

MEMORANDUM FINDINGS OF FACT AND OPINION

WHERRY, Judge: This proceeding arises from a petition filed

in response to a Notice of Determination Concerning Collection

Action under Section 6330 and a Notice of Determination

Concerning Your Request for Relief pursuant to section 6015(f).1

The issues for decision are:

(1) Whether petitioner was required to file a Federal income

tax return for 1996;

(2) whether respondent abused his discretion in determining

that collection action under section 6330 was appropriate; and

(3) whether respondent abused his discretion in denying

petitioner’s request for relief from joint and several liability

under section 6015(f).

FINDINGS OF FACT

Some of the facts have been stipulated and are so found.

The stipulations of the parties, with accompanying exhibits, are

incorporated herein by this reference. At the time this petition

was filed, petitioner resided in Las Vegas, Nevada.

I. Background

Petitioner and Keith R. Magee (Mr. Magee) were married, but

they separated at some time during calendar year 1996.

Petitioner and Mr. Magee had a daughter during their marriage who

1
Unless otherwise indicated, all section references are to
the Internal Revenue Code (Code) in effect for the year in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
 - 3 -

was born in 1993. Petitioner has custody of her daughter and has

struggled very hard to support herself and her daughter despite

difficult circumstances. During 1996, petitioner was a newspaper

carrier. Following her divorce from Mr. Magee, petitioner filed

for bankruptcy, but she has since then purchased a home. Other

than the fact that Mr. Magee failed to make court-ordered child

support payments, the record does not provide any specific

information regarding Mr. Magee or any information with respect

to the manner in which petitioner and Mr. Magee conducted their

financial affairs.

II. Procedural History

Petitioner and Mr. Magee filed a joint Form 1040, U.S.

Individual Income Tax Return, for the 1996 taxable year on July

26, 1998, prepared at the behest of Mr. Magee by a professional

tax return preparer. The tax return showed the following: Total

income of $38,177; tax of $4,474; tax paid of $2,469 (by Mr.

Magee’s withholdings); and a balance of tax due of $2,005. As

reported on Schedule C, Profit or Loss From Business Income, of

the joint tax return, petitioner grossed $11,032 from the

delivery of newspapers and claimed $7,376 in expenses. The

return was processed, and the tax shown due on the return was

assessed on August 24, 1998.

A notice and demand was mailed to petitioner on August 24,

1998, at petitioner’s last known address as listed on her 1996

return. Respondent transferred and applied petitioner’s tax
 - 4 -

credits from 2000 and 2002 in the amounts of $500 and $400 on

September 30, 2001, and August 4, 2003, respectively, to

partially offset petitioner’s and Mr. Magee’s unpaid 1996 joint

liability. Petitioner was notified of these transfers at her

last known address.

A notice of intent to levy was mailed to petitioner’s last

known address on September 30, 2003. A Final Notice of Intent to

Levy and Notice of Your Right to a Hearing was sent to petitioner

on October 7, 2003, with an account summary showing an amount due

of $3,570.80, which amount, at that time, included the assessed

balance, accrued interest, and an addition to tax. Petitioner

submitted her Form 12153, Request for a Collection Due Process

Hearing, on or about October 21, 2003, and submitted Form 8857,

Request for Innocent Spouse Relief, on or about October 23, 2003.

On February 6, 2004, the requested collection hearing with

an Appeals officer was held by telephone. At the hearing,

petitioner did not discuss any collection alternatives with the

Appeals officer. On March 12, 2004, the Appeals officer issued a

Notice of Determination Concerning Collection Action under

Section 6330 informing petitioner that the decision to upon levy

petitioner’s property was an appropriate action. Also on March

12, 2004, the Appeals officer issued a Notice of Determination

Concerning Your Request for Relief under the Equitable Relief

Provision of Section 6015(f) stating that no relief under section

6015(f) would be granted because petitioner requested relief more
 - 5 -

than 2 years after the first collection action following July 22,

1998, took place.2

Petitioner attempted to file with the Internal Revenue

Service (IRS) Form 1040-SS, U.S. Self-Employment Tax Return,3 for

1996 on or about March 15, 2004, showing a net loss of $435 from

self-employment. Petitioner attached the Form 1040-SS as an

exhibit to a Form 843, Claim for Refund and Request for

Abatement, which she filed in her attempt to obtain a refund of

her total tax credits of $900. Petitioner also stated at trial

that she attempted to file her own 1996 tax return with her

signature on it, but the return was not accepted.4 However, this

statement was made before petitioner was sworn in as a witness

and, therefore, does not constitute evidence in this case. Also

on or about March 15, 2004, petitioner filed Form 941c,

Supporting Statement to Correct Information, as an adjustment to

her Form 843 for the 1996 taxable year claiming an adjustment of

$900.5 Petitioner attached to the Form 843 a Form 1040, Schedule

2
On brief, respondent conceded the issue of whether
petitioner properly elected relief within the 2 years after the
date the Secretary had begun collection activities in light of
our decision in McGee v. Commissioner, 123 T.C. 314 (2004).
3
The purpose of Form 1040-SS is for residents of the Virgin
Islands, Guam, American Samoa, the Commonwealth of the Northern
Mariana Islands, and Puerto Rico to report, among other things,
earnings from self-employment and pay self-employment tax.
4
The Court assumes that petitioner meant to file a Form
1040 tax return for 1996. See supra note 3.
5
The Court realizes that petitioner’s Form 941c filed on or
(continued...)
 - 6 -

C showing a net loss of $435 for 1996, and she also attached a

Form 8863, Education Credits, Hope and Lifetime Learning Credits,

purportedly for the 1996 taxable year, showing that she was

entitled to tentative education credits in the amount of $240.

On March 16, 2004, petitioner filed the above-mentioned Form

843 alleging, among other things, that her former husband forged

her signature on their 1996 joint tax return, that the IRS “has

kept [her] rebates”, and that she was not required to file a

Federal tax return for 1996. However, at trial she stated: “In

‘96, that was the year that I separated from my husband, he asked

me to leave, and I said I couldn’t because we had lots of things

to attend [to]. Number One, we had the return, and he said to

leave your [papers] and I will take care of it.” Petitioner

later testified: “And, yes, I would have filed with him in ‘96,

and you can put that on the record, too. I loved him and I

wanted our family, but in ‘98, I didn’t want him, and he didn’t

pay us, and he didn’t keep his promises, and he lied, and he said

he was coming and he didn’t come.”6

5
(...continued)
about Mar. 15, 2004, purports to correct information on Form 843
filed subsequently on Mar. 16, 2004, as discussed infra in text.
The Court notes the date inconsistency. However, the parties
confirmed at trial that the total amount of the tax credits
transferred by respondent to offset the underpayment in 1996 was,
in fact, $900.
6
Petitioner did not introduce any evidence that she ever
notified Mr. Magee prior to the date in 1998 that Mr. Magee filed
their joint income tax return for 1996 that petitioner had
changed her mind and no longer wished to file a joint Federal
(continued...)
 - 7 -

In response to respondent’s March 12, 2004, determination

letters, petitioner on March 31, 2004, timely filed a Petition

for Lien or Levy Action Under Code Section 6320(c) or 6330(d)

with this Court for the 1996 taxable year. On May 21, 2004,

respondent filed an answer to petitioner’s petition and a

certification under Rule 325(b). See King v. Commissioner, 115

T.C. 118 (2000). The certification confirmed that respondent

notified Mr. Magee that petitioner filed a claim for relief from

joint and several liability and that he could intervene. Despite

the notice, Mr. Magee has not intervened in this case.

OPINION

I. Contentions of the Parties

Petitioner contends that she is not required to file a

Federal income tax return for 1996. Specifically, she asserts

that she did not generate a sufficient amount of income to

require her to file a return. In addition, with respect to the

1996 joint return, petitioner maintains that she is entitled to

relief from joint and several liability because her former spouse

forged her signature on the return. Ultimately, petitioner

claims that she never received a notice of deficiency for 1996,

that 1996 joint return was invalid, that liability on the 1996

joint return was incorrect, and that she was not given a proper

6
(...continued)
income tax return for 1996.
 - 8 -

hearing with respect to respondent’s intent to levy.7 Petitioner

also asserts that she should be entitled to recover her

litigation and/or administrative costs for, among other things,

her time in preparing her defense.8

Respondent, on the other hand, claims that petitioner earned

self-employment income in 1996 and was required to file an income

tax return for 1996. Respondent does not contend that petitioner

is liable for a deficiency or that an understatement exists;

rather, he states that this case concerns petitioner’s failure to

pay her tax liability as shown on her joint return filed for

1996. Furthermore, respondent argues that he did not abuse his

discretion in determining collection action was appropriate under

section 6330 or in denying relief from joint and several

liability under section 6015(f).

II. Filing Requirement

The Code imposes a Federal tax on the taxable income of

every individual. Sec. 1. Gross income for the purpose of

calculating taxable income is defined as “all income from

7
The parties did not address sec. 7491(a), and petitioner
did not argue that the burden of proof shifted to respondent
under sec. 7491(a).
8
Petitioner requested recovery of legal fees for her time
in preparing for the instant case, in obtaining her divorce, and
in filing her bankruptcy in March 2000. Additionally, petitioner
asks the Court for recovery for legal fees to compensate her
minor child for the child’s time “to protect” petitioner’s
rights. Although petitioner did not specifically request
litigation or administrative costs under sec. 7430, any
consideration for costs under sec. 7430 would be premature, and
the Court will not further discuss the issue. See Rule 231.
 - 9 -

whatever source derived”. Sec. 61(a). Every U.S. resident

individual whose gross income for the taxable year equals or

exceeds the exemption amount is (with enumerated exceptions not

applicable here) required to file an income tax return. Sec.

6012(a)(1)(A). Petitioner had gross income totaling at least

$11,000 from receipts or sales from her newspaper delivery

business for taxable year 1996.9 The filing threshold for a

taxpayer under age 65 filing a single return for taxable year

1996 was $6,550.10 Petitioner’s gross income exceeded the filing

threshold for the 1996 taxable year, and petitioner was,

therefore, required to file an income tax return.

III. Levy Collection Action

Section 6331(a) authorizes the Commissioner to collect any

unpaid tax by levy upon all “property and rights to property” of

a person liable for such tax within 10 days after notice and

demand of payment for such tax. However, before a levy commences

under section 6331(a), the Commissioner must give the taxpayer at

least 30 days’ written notice of the Commissioner’s intent to

make such a levy in order for any collection action to proceed.

9
Petitioner stated that she had gross receipts of $11,000.
The Court assumes this is a rounded amount. Per Form 1040,
Schedule C, petitioner had gross income from receipts or sales of
$11,032.
10
Petitioner did not allege head of household filing status
for 1996 in her Form 1040-SS; however, petitioner indicated that
she had a daughter who was not yet “emancipated”. In any event,
the filing threshold for 1996 for head of household under 65 was
$8,450 and for married filing separately was $2,550.
 - 10 -

Sec. 6331(d). Such notice must also include a brief statement

setting forth, among other things, any available administrative

appeals. Sec. 6331(d)(4).

Section 6330 then establishes procedures for administrative

and judicial review of collection actions by levy. Specifically,

section 6330(a) requires a 30-day written notification to the

taxpayer of his or her right to an administrative hearing before

a levy may be made, including a statement of administrative

appeals available. Section 6330(b) provides that any hearing

requested by a taxpayer will be held by the IRS Office of Appeals

and conducted before an impartial officer. Section 6330(c)

establishes matters which can be considered at the administrative

hearing:

(2) Issues at hearing.--

(A) In general.--The person may raise at
the hearing any relevant issue relating to
the unpaid tax or the proposed levy,
including--

(i) appropriate spousal defenses;

(ii) challenges to the
appropriateness of collection
actions; and

(iii) offers of
collection alternatives, which
may include the posting of a
bond, the substitution of
other assets, an installment
agreement, or an offer-in-
compromise.

(B) Underlying liability.--The person
may also raise at the hearing challenges to
 - 11 -

the existence or amount of the underlying tax
liability for any tax period if the person
did not receive any statutory notice of
deficiency for such tax liability or did not
otherwise have an opportunity to dispute such
tax liability.

* * * * * * *

Lastly, section 6330(d) permits the taxpayer to appeal a

determination resulting from the hearing within 30 days to the

Tax Court, or to a District Court of the United States if the Tax

Court does not have jurisdiction of the underlying tax liability.

Sec. 6330(d)(1).

Section 6330(c)(2)(A) allows a taxpayer to raise collection

issues such as spousal defenses, the appropriateness of the

Commissioner’s intended collection action, and possible

alternative means of collection. Montgomery v. Commissioner, 122

T.C. 1, 5 (2004); Sego v. Commissioner, 114 T.C. 604, 609 (2000);

Goza v. Commissioner, 114 T.C. 176, 180 (2000). A taxpayer

cannot raise issues relating to the underlying tax liability if

the taxpayer received a notice of deficiency or had the

opportunity to dispute the liability. Sec. 6330(c)(2)(B); Sego

v. Commissioner, supra; Goza v. Commissioner, supra. A

taxpayer’s “underlying tax liability” under section 6330(c)(2)(B)

includes taxes determined by the taxpayer and shown due on the

filed tax returns and assessed by respondent. Montgomery v.

Commissioner, supra at 7-8.
 - 12 -

Since petitioner did not receive a notice of deficiency for

1996, and did not otherwise have the opportunity to dispute her

liability pursuant to section 6330(c)(2)(B), she was entitled to

challenge the existence or the amount of the underlying tax

liability for 1996 at her Appeals Office hearing. See id. at 8-

9. Petitioner raised the allegation that her husband forged her

signature on her tax return as a defense to respondent’s

assessment.

Where the validity of the underlying tax liability is not

properly placed at issue, the Court will review the

administrative determination of the Appeals Office for an abuse

of discretion. Sego v. Commissioner, supra at 610; Goza v.

Commissioner, supra at 181-182. However, if the validity of the

underlying tax liability is properly at issue, as is the case

here, the Court reviews the matter de novo. Poindexter v.

Commissioner, 122 T.C. 280, 285 (2004), affd. 132 Fed. Appx. 919

(2d Cir. 2005); Sego v. Commissioner, supra at 609-610.

A lien or levy action under section 6330(d) is commenced by

the filing of a petition with this Court. Rule 331(a). Rule

331(b) addresses the content of the petition. Rule 331(b)(4) and

(5) requires that petitioner’s pleading contain “Clear and

concise assignments of each and every error which the petitioner

alleges to have been committed in the notice of determination”

and “Clear and concise lettered statements of the facts on which

the petitioner bases each assignment of error”. Petitioner must
 - 13 -

plead her allegations of fact with sufficient specificity that

the Court can conduct a meaningful hearing to determine whether

respondent can proceed with collection of her liability.

Poindexter v. Commissioner, supra at 285.

Petitioner’s statements indicate that she disagrees with the

income tax liability as shown on the joint return. However,

other than claiming that the joint return contained false or

fraudulent information, petitioner fails to specifically address

or identify any items of income, deduction, or credit or any

calculations that are incorrect. In fact, respondent has not

challenged the $7,376 in Schedule C expenses claimed on the filed

1996 tax return.11 In short, as to computational matters,

petitioner has failed to aver facts or to establish facts at

trial with credible evidence sufficient to show any error in

respondent’s assessment. Petitioner’s only explicit argument

contesting her underlying tax liability is her contention that

11
Petitioner stated that she had gross income of $11,000
and incurred $8,000 in expenses for papers and supplies in
connection with her newspaper delivery business. However, at
trial, she orally listed expenses of: $7,405 for papers, $140
for an expense not mentioned, and $300 for her bond. These
amounts total $7,845, none of which was substantiated by
petitioner. Petitioner did not submit any evidence regarding any
of her deductions, yet respondent never disallowed any of the
$7,376 in expenses claimed on petitioner’s Form 1040, Schedule C.
It appears that petitioner attempted to file a Form 1040 because
she believed she was entitled to a refund of her $900 in tax
credits. She apparently thought that she only had income of
approximately $3,000, was, therefore, not liable for any tax, and
had no obligation to file a return. This was an erroneous belief
since an individual’s obligation to file a tax return depends
upon on gross income, not net income. See sec. 6012(a)(1)(A);
see also supra sec. II.
 - 14 -

her husband forged her signature on their joint return.12 The

Court addresses below petitioner’s contention that her signature

was forged on the joint return, but the Court notes that this

contention does not invalidate the joint return, and it also does

not place the validity of the underlying liability at issue.

Petitioner did not pursue her opportunities to discuss

collection alternatives with the Appeals officer such as a

possible installment agreement, offer-in-compromise, the posting

of a bond, or the substitution of other assets, and she did not

submit any financial information for the Appeals officer to

consider. See sec. 6330(c)(2)(A)(iii). The Appeals officer

verified that the legal and procedural requirements for

collection had been satisfied in her Collection Due Process

Explanation of Items.

IV. Filing of a Joint Return

Section 6013 allows a husband and a wife to file a joint

return. Generally, joint and several liability applies to all

joint returns. Sec. 6013(d)(3). Therefore, petitioner would

typically be jointly and severally liable for the payment of any

taxes due on the aggregate income. See id. Where a taxpayer has

consented to the filing of a joint return, such joint return may

be considered valid even if only one taxpayer signs the return.

Estate of Campbell v. Commissioner, 56 T.C. 1, 12-13 (1971);

12
See infra sec. IV for a discussion on the validity of a
joint return where only one spouse signed the return.
 - 15 -

Douglas v. Commissioner, 27 T.C. 306, 313-314 (1956), affd. sub

nom. Sullivan v. Commissioner, 256 F.2d 4 (5th Cir. 1958); Heim

v. Commissioner, 27 T.C. 270, 273 (1956), affd. 251 F.2d 44 (8th

Cir. 1958). Whether a husband and a wife intended to file a

joint return is highly probative of whether the return qualifies

as a joint return. Stone v. Commissioner, 22 T.C. 893, 900-901

(1954). A spouse’s intent is a question of fact. Estate of

Campbell v. Commissioner, supra at 12.

Despite petitioner’s claim that Mr. Magee forged her

signature on their joint return,13 the Court construes

petitioner’s testimony and statement as affirming that she

intended to file a joint return with Mr. Magee for 1996.

Petitioner testified that she filed a separate return for 1996.

In reality, petitioner belatedly filed as an attachment to her

Form 843 a Form 1040-SS,14 dated March 15, 2004, for her 1996

taxable year showing negative self-employment income in the

amount of $435 and no tax due. However, petitioner’s previously

13
Petitioner was in the process of introducing evidence
that the signature on the 1996 joint return was not her signature
when respondent agreed verbally to stipulate this fact.
Petitioner did not introduce any credible evidence that her
agreement to file a joint Federal income tax return was acquired
under duress.
14
See supra notes 3 and 4. It appears that in 1996,
petitioner intended to file a joint return with Mr. Magee.
However, in 1998, after Mr. Magee failed to pay child support
payments, petitioner apparently questioned her decision to file
jointly with him. In 2004, after the IRS initiated collection
action, petitioner attempted to file a separate return for 1996
to avoid liability for the unpaid 1996 joint tax still due and to
obtain a refund of her $900 in tax credits.
 - 16 -

filed joint return revealed that petitioner had gross receipts of

$11,032 in 1996. The record does not indicate any reasons why

petitioner or Mr. Magee would not elect to file a joint return

and indicates that at the time they intended to do so. It was

not until years later that petitioner determined she no longer

wished to file jointly in light of the resulting unpaid joint tax

liability and the complete breakdown of her marriage. Therefore,

the Court finds that petitioner filed a joint return with

Mr. Magee.

V. Relief Under Section 6015

In certain situations, a joint return filer can avoid joint

and several liability by seeking relief under section 6015.15

Generally, a joint filer can seek relief under three

alternatives: (1) Full or partial relief under section 6015(b);

(2) proportionate relief under section 6015(c); and (3) equitable

relief under section 6015(f).

A. Introduction

In relevant part, section 6015(a) provides:

SEC. 6015(a). In General.--Notwithstanding section
6013(d)(3)--

(1) an individual who has made a joint return
may elect to seek relief under the procedures
prescribed under subsection (b); and

15
Section 6015 applies to any tax liability arising after
July 22, 1998, and to any tax liability arising before 1998, but
remaining unpaid as of that date, as in the instant case.
Internal Revenue Service Restructuring and Reform Act of 1998,
Pub. L. 105-206, sec. 3201(g), 112 Stat. 734.
 - 17 -

(2) if such individual is eligible to elect
the application of subsection (c), such individual
may, in addition to any election under paragraph
(1), elect to limit such individual’s liability
for any deficiency with respect to such joint
return in the manner prescribed under subsection
(c).

Where relief is not available under section 6015(b) or (c),

section 6015(f) provides an additional alternative for relief

from joint and several liability, at the discretion of the

Secretary, if it would be inequitable to hold the taxpayer liable

for any unpaid tax or deficiency. Rev. Proc. 2003-61, 2003-2

C.B. 296.

B. Relief Under Section 6015(b) and (c)

Relief under section 6015(b) or (c) is premised on the

existence of a deficiency. Sec. 6015(b)(1)(B) and (c)(1); Block

v. Commissioner, 120 T.C. 62, 65-66 (2003). Since this case does

not involve a deficiency or an understatement, relief under

section 6015(b)(1) or (c) is not available.

C. Relief Under Section 6015(f)

The Tax Court has jurisdiction to review a denial of

equitable relief. Fernandez v. Commissioner, 114 T.C. 324, 328-

330 (2000). The Tax Court reviews respondent’s denial of relief

to determine whether respondent’s determination was arbitrary,

capricious, clearly unlawful, or without sound basis in law or

fact. Ewing v. Commissioner, 122 T.C. 32, 39 (2004).

Where relief is not available under section 6015(b) or (c),

petitioner may be entitled to relief if it would be “inequitable
 - 18 -

to hold the individual liable for any unpaid tax”. Sec.

6015(f)(1). Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 29716

lists seven threshold conditions that petitioner must satisfy in

order for respondent to consider a request for relief under

section 6015(f). The threshold conditions are as follows:

(1) The requesting spouse filed a joint return for the
taxable year for which he or she seeks relief.
(2) Relief is not available to the requesting spouse
under section 6015(b) or (c).
(3) The requesting spouse applies for relief no later
than two years after the date of the Service’s first
collection activity after July 22, 1998, with respect
to the requesting spouse * * *.
(4) No assets were transferred between the spouses as
part of a fraudulent scheme by the spouses.
(5) The nonrequesting spouse did not transfer
disqualified assets to the requesting spouse.* * *
(6) The requesting spouse did not file or fail to file
the return with fraudulent intent.
(7) The income tax liability from which the requesting
spouse seeks relief is attributable to an item of the
individual with whom the requesting spouse filed the
joint return (the “nonrequesting spouse”), unless one
of the following exceptions applies:[17]
(a) Attribution solely due to the operation of
community property law. * * *
(b) Nominal ownership. * * *
(c) Misappropriation of funds. * * *
(d) Abuse not amounting to duress. * * *

16
Rev. Proc. 2003-61, 2003-2 C.B. 296, supersedes Rev.
Proc. 2000-15, 2000-1 C.B. 447. Rev. Proc. 2003-61, supra, and is
effective for requests for relief filed on or after Nov. 1, 2003,
and for requests for relief pending as of Nov. 1, 2003, for which
no preliminary determination letter had been issued as of Nov. 1,
2003. The record does not indicate that respondent issued
petitioner a preliminary determination letter on or before Nov.
1, 2003; therefore, Rev. Proc. 2003-61 applies in this case.
17
Petitioner and Mr. Magee’s 1996 joint tax return reflects
estimated taxes paid by Mr. Magee. However, this amount was not
sufficient to cover all of his tax liability, much less any of
petitioner’s tax liability.
 - 19 -

Respondent did not contest that petitioner met these seven

threshold conditions.

Once petitioner has satisfied the threshold conditions, Rev.

Proc. 2003-61, sec. 4.03(2), 2003-2 C.B. at 298,18 then provides

a “nonexclusive list of factors” that the Commissioner “will

consider in determining whether, taking into account all the

facts and circumstances, it is inequitable to hold the requesting

spouse liable for all or part of the unpaid income tax

liability”. No single factor will determine whether equitable

relief will be granted in any particular case, and the

Commissioner will consider and weigh all relevant factors

regardless of whether or not the factor is listed in Rev. Proc.

2003-61, sec. 4.03. Rev. Proc. 2003-61, sec. 4.03(2)(a) provides

the following factors that may be relevant to whether the

Commissioner will grant equitable relief: (1) Marital status,

(2) economic hardship, (3) knowledge or reason to know that the

nonrequesting spouse would not pay the liability, (4) the

nonrequesting spouse’s legal obligation, (5) significant benefit,

(6) compliance with income tax laws, (7) abuse, and (8) mental or

physical health. Certain factors, specifically abuse or mental

or physical health, will weigh in favor of granting equitable

relief; however, they will not weigh against equitable relief if

18
Rev. Proc. 2003-61, sec. 4.03 applies to a spouse who
meets the conditions of sec. 4.01, but not sec. 4.02.
 - 20 -

they are not found present in a case. Rev. Proc. 2003-61, sec.

4.03(2)(b), 2003-2 C.B. at 299.

1. Marital Status

Whether the requesting spouse is separated or divorced from

the nonrequesting spouse is a factor in favor of granting relief

to the requesting spouse. Rev. Proc. 2003-61, sec.

4.03(2)(a)(i). Petitioner was divorced from Mr. Magee at the

time she sought relief. This factor weighs in favor of granting

equitable relief.

2. Economic Hardship

If payment of the tax liability would cause the requesting

spouse to suffer economic hardship, this factor would support the

granting of equitable relief to the requesting spouse. Rev.

Proc. 2003-61, sec. 4.03(2)(a)(ii). Economic hardship “applies

if satisfaction of the levy in whole or in part will cause an

individual taxpayer to be unable to pay his or her reasonable

basic living expenses. The determination of a reasonable amount

for basic living expenses will be made by the director and will

vary according to the unique circumstances of the individual

taxpayer.” Sec. 301.6343-1(b)(4)(i), Proced. & Admin. Regs.

In determining a reasonable amount for basic living

expenses, the Commissioner will consider any information provided

by the taxpayer including, inter alia: (1) The taxpayer’s age,

employment, status and history, ability to earn, and number of

dependents; (2) the amount reasonably necessary for food,
 - 21 -

clothing, housing, medical expenses, transportation, current tax

payments, alimony, child support, or other court-ordered payments

and expenses necessary to the taxpayer’s production of income;

(3) cost of living in the geographic area where the taxpayer

resides; (4) the amount of property exempt from the levy which is

available to pay the taxpayer’s expenses; (5) any extraordinary

circumstances; and (6) any other factor that the taxpayer claims

bears on economic hardship. Sec. 301.6343-1(b)(4)(ii), Proced. &

Admin. Regs.

Petitioner supports her daughter and stated that she was

providing her with lessons19 and 2 years of orthodontic work.

Petitioner also asserted that she was in Chapter 7 bankruptcy for

5 months because Mr. Magee left her with medical bills and has

not made required child support payments. Although the Court

believes that petitioner honestly suffered a financial hardship

resulting from Mr. Magee’s failure to pay child support, she did

not provide this Court with any supporting financial records.

While petitioner credibly testified as to her generalized

expenses, she did not provide any specific evidence regarding her

income; the amount necessary for food, clothing, housing, medical

expenses, transportation for petitioner and her daughter, or

expenses necessary for petitioner’s production of income; or any

evidence regarding her net worth. Absent evidence regarding

19
The record does not indicate the type of “lessons” to
which petitioner refers.
 - 22 -

petitioner’s basic living expenses, income, and net worth,

petitioner has not demonstrated that she would suffer an economic

hardship if she were denied relief from joint and several

liability. This factor weighs to some degree in favor of denying

equitable relief.

3. Knowledge or Reason To Know

In a situation where a liability has not been paid and the

requesting spouse did not know or had no reason to know that the

nonrequesting spouse would not pay the liability, this factor

would weigh in favor of granting relief. Rev. Proc. 2003-61,

sec. 4.03(2)(a)(iii). When petitioner and Mr. Magee separated,

petitioner stated that she left all her tax information and

records with Mr. Magee for him to file their joint return.

Petitioner was thus aware of the need to file the return, but she

did not participate in the preparation of the joint return. In

1996, petitioner was self-employed as a newspaper carrier and did

not make any estimated tax payments, nor did she have any tax

withheld for 1996.

Since petitioner and her then husband had a tax liability

resulting from his and her earned income, and petitioner did not

have any withholding or pay any estimated taxes for 1996,

petitioner knew or should have known that she could owe tax on

the joint return for at least her portion of the earned income.

While she testified that she did not think any tax would be due,

that assumption was not justified. Petitioner did not offer any
 - 23 -

evidence demonstrating that it was reasonable for her to believe

that Mr. Magee would pay any unpaid tax liability. We are not

persuaded that petitioner lacked knowledge or reason to know that

any unpaid tax liability for 1996 would not be paid by Mr. Magee.

This factor weighs in favor of denying equitable relief.

4. Nonrequesting Spouse’s Legal Obligation

This is a factor in favor of the requesting spouse where the

nonrequesting spouse has a legal obligation pursuant to a divorce

decree or an agreement to pay the outstanding tax liability, and

the requesting spouse did not know or did not have any reason to

know that the nonrequesting spouse would not pay the income tax

liability. Rev. Proc. 2003-61, sec. 4.03(2)(a)(vi).

Petitioner offered Form FSA - 200, Child Support Enforcement

Transmittal, showing that Mr. Magee’s location could not be

determined as of April 4, 2001. Petitioner also testified that

Mr. Magee’s driver license was revoked, that any IRS refunds to

which Mr. Magee would be entitled would be levied for the support

of their child, and that a bench warrant for Mr. Magee had been

issued. The Court found petitioner’s testimony regarding

Mr. Magee’s obligation to provide child support payments to be

credible and sincere. However, petitioner did not establish that

Mr. Magee was under an obligation to pay the tax debt pursuant to

a divorce decree or other agreement. This is a neutral factor.
 - 24 -

5. Significant Benefit

Where the requesting spouse significantly benefited (beyond

normal support) from the unpaid liability, this is a factor

against granting relief to the nonrequesting spouse. Petitioner

and Mr. Magee had income in the amounts of $11,032 and $30,805,

respectively, for 1996, as shown on their joint return. Mr.

Magee made estimated tax payments; petitioner did not.

Petitioner’s gross income constituted about 25 percent of the

total income, and her net income was even less. There is nothing

in the record regarding petitioner and Mr. Magee’s lifestyle or

spending habits when they were married. It appears that

petitioner did not receive a significant benefit from the filing

of the joint return. This factor weighs in favor of granting

relief.

6. Abuse

There is no evidence in the record that petitioner suffered

any physical abuse from Mr. Magee. This is a neutral factor.

See Rev. Proc. 2003-61, sec. 4.03(2)(b)(i).

7. Mental or Physical Health

There is no evidence in the record that petitioner’s mental

or physical health was poor. This is a neutral factor. See Rev.

Proc. 2003-61, sec. 4.03(2)(b)(ii).

All factors weighed and considered, the Court finds that it

would not be inequitable under section 6015(f) to hold petitioner

liable for the 1996 unpaid tax.
 - 25 -

VI. Conclusion

The Court found the testimony of petitioner to be sincere.

It appears from the record that when petitioner and Mr. Magee

divorced, he left petitioner and their child with scant financial

resources and significant debt. However, since petitioner

intended to file a joint return with Mr. Magee, she should have

been aware that each joint filer would be jointly and severally

liable for any tax shown due on the return. The Court is

sympathetic to petitioner’s case; nevertheless, on this record,

the Court concludes that respondent’s denial of equitable relief

was appropriate. Therefore, petitioner is not entitled to relief

under section 6015(f) and is liable for the amount shown due on

the tax return. Accordingly, collection action by levy of

petitioner’s unpaid 1996 tax liability as reflected in the notice

of determination may proceed.

The Court has considered all of petitioner’s contentions,

arguments, requests, and statements. To the extent not discussed

herein, we conclude that they are meritless, moot, or irrelevant.

To reflect the foregoing,

Decision will be entered

for respondent.