Alioto v. Comm'r

T.C. Memo. 2008-185

UNITED STATES TAX COURT

KATHLEEN SULLIVAN ALIOTO, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 14356-03. Filed July 31, 2008.

Karen L. Hawkins, for petitioner.

Andrew R. Moore and Michael Melone, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

VASQUEZ, Judge: Respondent determined that petitioner did

not qualify for relief from joint and several liability pursuant

to section 60151 for 1995 and 1996.2 This case is before the

1
Unless otherwise indicated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
2
In her petition, petitioner sought relief pursuant to
(continued...)
 - 2 -

Court on petitioner’s motion to vacate order of dismissal, as

supplemented, pursuant to Rule 162 and petitioner’s motion for

reconsideration. The Court will grant petitioner’s motion to

vacate order of dismissal, as supplemented, and will grant

petitioner’s motion for reconsideration. The issue for decision

is whether petitioner is entitled to relief from joint and

several liability pursuant to section 6015(f) for 1995 and 1996.

FINDINGS OF FACT

I. Procedural Background

Petitioner Kathleen Sullivan Alioto (Mrs. Alioto) and her

husband Joe Alioto (Mayor Alioto)3 filed joint Federal income tax

returns for 1995 and 1996. Mayor Alioto died in January 1998.

After his death Mrs. Alioto filed a request for section 6015

relief for 1995 and 1996. Respondent determined that Mrs. Alioto

did not qualify for section 6015 relief for either year. Mrs.

Alioto petitioned for section 6015 relief. For 1995 and 1996

Mrs. Alioto sought only section 6015(f) relief. No deficiency

was asserted against Mayor Alioto and Mrs. Alioto for either

year.

2
(...continued)
sec. 6015 for 1993, 1994, 1995, and 1996. Since the petition was
filed, respondent has collected amounts (payments from the Estate
of Joseph Alioto) that fully satisfied the liabilities for 1993
and 1994, and the parties agree that these years are no longer at
issue in this case.
3
From Jan. 8, 1968, through Jan. 8, 1976, petitioner’s
husband Joe Alioto served as mayor of San Francisco, California.
 - 3 -

In Alioto v. Commissioner, T.C. Memo. 2006-199 (Alioto I),

we held that we lacked jurisdiction over the case at bar. We

stated:

The Tax Court is a court of limited jurisdiction.
Commissioner v. Ewing, 439 F.3d 1009, 1012 (9th Cir.
2006), revg. 118 T.C. 494 (2002). Whether this Court
has jurisdiction is fundamental and may be raised by a
party or on the Court’s own motion. Ewing v.
Commissioner, 118 T.C. at 495; Fernandez v.
Commissioner, 114 T.C. 324, 328 (2000).

Recently, the Court held that we lack jurisdiction
over “stand-alone” section 6015(f) cases (i.e., cases
in which no deficiency has been asserted) such as the
case at bar. Billings v. Commissioner, 127 T.C. ___
(2006). Additionally, the U.S. Court of Appeals for
the Ninth Circuit, the court to which appeal of this
case apparently lies, also has held that the Tax Court
lacks jurisdiction over “stand-alone” section 6015(f)
cases (i.e., cases in which no deficiency has been
asserted) such as the case at bar. Commissioner v.
Ewing, 439 F.3d at 1014-1015.

Accordingly, pursuant to Billings and the opinion
of the U.S. Court of Appeals for the Ninth Circuit’s
[sic] in Ewing, we conclude that we lack jurisdiction
over this case. Billings v. Commissioner, supra; Toppi
v. Commissioner, T.C. Memo. 2006-182 (dismissing stand-
alone section 6015(f) case for lack of jurisdiction
pursuant to Billings because the Commissioner did not
assert a deficiency for any of the years in issue);
Stroud v. Commissioner, T.C. Memo. 2006-175 (same); see
also Commissioner v. Ewing, 439 F.3d at 1014-1015;
Golsen v. Commissioner, 54 T.C. 742 (1970), affd. 445
F.2d 985 (10th Cir. 1971). Therefore, we shall dismiss
this case for lack of jurisdiction.

Accordingly, on September 18, 2006, the Court entered an order of

dismissal for lack of jurisdiction.
 - 4 -

On October 18, 2006, the Court received petitioner’s motion

for reconsideration. On November 29, 2006, petitioner filed a

motion for leave to file a motion to vacate order of dismissal

and lodged a motion to vacate order of dismissal.

On December 12, 2006, the Court granted petitioner’s motion

for leave to file a motion to vacate order of dismissal and filed

the motion to vacate order of dismissal, as supplemented, and the

motion for reconsideration.

As of December 20, 2006, Mrs. Alioto’s balances due for 1995

and 1996 were $153,501 and $1,832,010, respectively.

II. Substantive Background

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

The stipulation of facts and the attached exhibits are

incorporated herein by this reference. At the time she filed the

petition, Mrs. Alioto resided in California.

In 1966 Mrs. Alioto received a B.A. in English literature

from Manhattanville College of the Sacred Heart in Purchase, New

York. That same year she began work as a third grade teacher in

Bedford-Stuyvesant, New York, at an annual salary of $5,400.

For the next 3 years Mrs. Alioto worked as an elementary

school teacher at P.S. 113 in Harlem, New York, at an annual

salary of less than $6,000.

From 1971 to 1973 Mrs. Alioto taught emotionally disturbed

children in an inner city neighborhood of Boston, Massachusetts.
 - 5 -

In 1973 Mrs. Alioto was elected to the Boston Public School

Board. From 1974 to 1980 she served without pay as a member of

the Boston Public School Board. During this period Mrs. Alioto

went back to school, and in 1980 she earned a Ph.D. in education.

Mayor Alioto and Mrs. Alioto married in February 1978. At

the time of their marriage Mayor Alioto was almost 30 years older

than Mrs. Alioto (Mrs. Alioto was in her early thirties and Mayor

Alioto was in his sixties). They remained married until Mayor

Alioto’s death in January 1998 just before his 82d birthday.

Mayor Alioto and Mrs. Alioto had two children. These two

children were 18 and 16 years old at the time of Mayor Alioto’s

death. Mayor Alioto and Mrs. Alioto enjoyed a loving,

supportive, and harmonious marital relationship, and Mayor Alioto

believed it was his absolute duty to care and provide for his

family.

Before his marriage to Mrs. Alioto, Mayor Alioto was married

for over 30 years to Angelina Alioto (Angelina). Mayor Alioto

and Angelina had six children. This marriage ended in divorce.

In December 1978, shortly after marrying Mrs. Alioto, Mayor

Alioto executed a marital settlement agreement (MSA) with

Angelina. In the MSA, among other things, Mayor Alioto obligated

himself to indemnify and defend Angelina with respect to

outstanding joint Federal and State tax liabilities for 1976 and
 - 6 -

1977. Mrs. Alioto did not learn of the MSA until after Mayor

Alioto’s death.

From January 8, 1968, through January 8, 1976, Mayor Alioto

served as the mayor of San Francisco, California. Mayor Alioto

practiced law as an antitrust attorney for his entire legal

career, which spanned over 50 years.

From 1980 to 1998 Mrs. Alioto served on various educational

committees, but she was not paid for this service and did not

earn income working outside her home. During this time Mrs.

Alioto “attended to” Mayor Alioto, kept their home, and raised

their children. Mayor Alioto did not want Mrs. Alioto to work

outside the home during their marriage.

Mayor Alioto virtually never discussed finances or business

matters with his children or with Mrs. Alioto--such discussions

were rare. Mrs. Alioto was not involved with Mayor Alioto’s law

practice and had virtually no knowledge of his business dealings.

In April 1984 a residence at 2510 Pacific Avenue, San

Francisco, California, was purchased as a home for Mayor Alioto

and Mrs. Alioto (Mrs. Alioto’s personal residence). Title to

Mrs. Alioto’s personal residence was in her name.

In 1990 and 1991, pursuant to stipulated decisions entered

by the Tax Court, Mayor Alioto individually was assessed
 - 7 -

additional income tax of $522,489 for 1976;4 and Mayor Alioto and

Angelina jointly were assessed additional income tax of $486,403

for 1977. When these “premarital”5 (vis-a-vis Mrs. Alioto)

liabilities were assessed, interest had accrued increasing the

amounts due to $1,525,856.96 and $1,268,201.85 for 1976 and 1977,

respectively.

Accountants at Kelly & Rossi prepared the couple’s joint tax

returns for each year Mayor Alioto was married to Mrs. Alioto.

Mrs. Alioto never met with or spoke with anyone at Kelly & Rossi.

On October 15, 1996, Mayor Alioto and Mrs. Alioto filed a

joint Federal income tax return for 1995 (1995 return). The 1995

return listed $40,249 in income tax, $13,394 in self-employment

tax, $6,543 in household employment tax, an estimated tax penalty

of $2,929, no estimated tax payments, and a total balance due of

$63,115. Attached to the 1995 return was a letter dated October

15, 1996, on letterhead from the “Law Offices of Joseph L.

Alioto”, addressed to the Internal Revenue Service (IRS) and the

Franchise Tax Board, regarding taxes due for 1995, signed by

Mayor Alioto, stating:

4
Mayor Alioto and Angelina, however, were jointly liable
for this amount for 1976.
5
We use the term “premarital” for convenience. The 1976
and 1977 tax liabilities are “premarital” as regards petitioner
(i.e., they predate petitioner’s marriage to Mayor Alioto).
 - 8 -

I am enclosing my tax returns without payment of the
tax, as I have impounded a recent fee of $2.1 million in the
United States District Court for the Northern District of
California, San Francisco Division (USDC Case No. C 96-2922
CAL) before the Honorable Judge Charles A. Legge requesting
that the payment for these taxes be made from that source.

There are various claimants to the funds,
including the IRS, and I am petitioning the court that
that fee of $2.1 million be used in part to pay these
taxes.

Mrs. Alioto did not see this letter when the 1995 return was

filed. Although the 1995 return contains a signature for Mrs.

Alioto, she did not sign the 1995 return. Mrs. Alioto and Mayor

Alioto did not have any conversations regarding the 1995 return

at the time it was filed, nor was she then aware that Mayor

Alioto had filed the 1995 return on Mrs. Alioto’s behalf.6

In December 1996 the IRS seized $2,026,153.35 which was

community property, representing Mayor Alioto’s entire fee (New

England Patriots case fees) earned in 1996 for legal services

rendered in the matter of Sullivan v. Natl. Football League (New

England Patriots case). Mayor Alioto sought to have the IRS

apply the seized New England Patriots case fees to satisfy Mayor

Alioto’s and Mrs. Alioto’s liabilities for 1995 and 1996. A Form

8275, Disclosure Statement, attached to the 1996 return, states:

“See attached letter to IRS attorney (Northern California

6
The same is true for Mrs. Alioto’s 1993 and 1994 tax
years, no longer in issue. Petitioner, however, does not contend
that the 1993, 1994, and 1995 returns were not joint returns
because she did not sign them.
 - 9 -

District). Taxpayer takes the position that the 1996 tax is paid

in full from the $2,100,000 fee earned in 1996 which the IRS

subsequently impounded.” In the referenced attached letter Mayor

Alioto wrote: “that when the tax on the $2,100,000 becomes due

(1996 return), that too should be paid from that source. The

equity of this position is inherent in the fact that the

$2,100,000 represented community earnings of my wife Kathleen”.

The letter further stated: “It does not seem equitable or legal

that Kathleen Alioto’s community earnings should pay joint

obligations of my former wife, particularly when the $2,100,000

fee was earned from a case involving Kathleen Alioto’s family.”7

In December 1996 the IRS served a levy regarding Mayor

Alioto’s 1976 “separate”8 tax liability on Drug Barn to collect

any legal fees owed to Mayor Alioto. In May 1998, when the Drug

Barn legal fee was awarded to Mayor Alioto, the IRS agreed to

release a portion of the Drug Barn legal fee to pay the current

year’s tax that would be due on the income.

In January 1997 Mayor Alioto sent a letter to the U.S.

Attorney’s Office confirming that he had designated that the

amount due on the 1995 return be paid from funds he “recently

7
Mrs. Alioto’s father was a former owner of the New
England Patriots.
8
We use the term “separate” for convenience. The 1976 and
1977 tax liabilities are “separate” as regards petitioner (i.e.,
they predate Mrs. Alioto’s marriage to Mayor Alioto).
 - 10 -

deposited with the court for the benefit of the I.R.S.”. Mayor

Alioto noted that it would be inequitable for the United States

to apply the balance of the New England Patriots case fees solely

to his separate premarital tax debts when the New England

Patriots case fees represented community property, and that an

inequitable application of the New England Patriots case fees

would leave a community property tax debt unpaid at the expense

of Mrs. Alioto. Mrs. Alioto did not see the letter at that time.

Between August 18 and October 3, 1997, David Miller (Mr.

Miller), an estate planning lawyer, met with Mayor Alioto and

Mrs. Alioto to discuss drafting an estate plan for each of them.

Mayor Alioto gave Mr. Miller a list of assets and their

approximate values. Mayor Alioto also disclosed to Mr. Miller $4

million in total debt. Mr. Miller reasonably believed that at

that time Mayor Alioto and Mrs. Alioto had a net worth of $16

million.

On October 15, 1997, Mayor Alioto and Mrs. Alioto filed a

joint Federal income tax return for 1996 (1996 return). The 1996

return listed $772,704 in income tax, $58,222 in self-employment

tax, $6,532 in household employment tax, an estimated tax penalty

of $853, an estimated tax payment of $838,311, and a total

balance due of zero. Before signing the 1996 return, Mayor

Alioto showed it to Mrs. Alioto and asked whether she had any

questions regarding it. Mrs. Alioto reviewed the 1996 return,
 - 11 -

and she saw the estimated tax payment of $838,311 and a total

balance due of zero before she signed the return.

When Mrs. Alioto signed the 1996 return, she reasonably

believed that any tax liability shown on the return had been

paid. Mrs. Alioto knew that Mayor Alioto had earned the New

England Patriots case fees, that Mayor Alioto had earned another

$1 million fee in 1997, and that he was attorney of record in a

number of other lawsuits in which he would earn additional

income.

In 1997 Mayor Alioto gave Mrs. Alioto $500,000 to deposit in

a brokerage account with Paine Webber. That same year, without

Mrs. Alioto’s knowledge or consent, Mayor Alioto withdrew over

$110,000 from that brokerage account with Paine Webber. Mrs.

Alioto did not discover until after Mayor Alioto’s death that he

had withdrawn the funds.

Mrs. Alioto reasonably believed that she and her husband had

a high net worth and that Mayor Alioto earned a lot of money each

and every year that they were married. Mayor Alioto’s public and

private personas--those of a highly successful lawyer with

substantial earning capacity, a man of wealth, and a man who was

on top of everything and who was in control--supported Mrs.

Alioto’s aforementioned reasonable belief.

In April 1998 administration of the Estate of Joseph Alioto

(the estate) was commenced, and it is still pending in the San
 - 12 -

Francisco Probate Court (the probate case). Mrs. Alioto has

served as sole special administrator, sole executrix, and sole

trustee in the probate case. Creditors, including the IRS and

the California State Franchise Tax Board, filed claims of over

$74 million against the estate. The IRS’s claim in the probate

case, including the liabilities in dispute in this case, totaled

$4,239,834.34.

Mrs. Alioto was shocked, surprised, and stunned to learn the

amounts of the creditors’ claims being asserted against the

estate and that Mayor Alioto had used $18 million of their

community property (income) to pay debts for others (including

Angelina and his children from his marriage to Angelina)

throughout her marriage to Mayor Alioto. After learning the

magnitude of the claims against the estate and how much of her

community property had already been used to pay Mayor Alioto’s

separate debts (including those of Angelina and his children from

his marriage to Angelina), Mrs. Alioto filed a creditor’s claim

in the probate proceeding for the amounts of her separate and

community property that had already been used to pay Mayor

Alioto’s separate debts (including those of Angelina and his

children from his marriage to Angelina). None of her claim will

be paid.

In June 1998 Mrs. Alioto, in her capacity as special

administrator of the estate, recovered a legal fee due to Mayor
 - 13 -

Alioto. The IRS seized $51,873 of this fee and applied it to

Mayor Alioto’s liability for 1976.

In July 1998 Mrs. Alioto secured employment as a consultant

for Connell & Co. During 1998 Mrs. Alioto earned $50,000.

Mrs. Alioto’s family health insurance terminated at the time

of Mayor Alioto’s death. During 1998 Mrs. Alioto incurred health

care expenses for treating family members’ grief and depression

over Mayor Alioto’s death. Additionally, Mrs. Alioto incurred

expenses for treating her daughter’s epilepsy. Mrs. Alioto

reasonably estimated that she incurred medical expenses of

approximately $22,000 in both 1998 and 1999.

In 1998 and 1999 Mrs. Alioto paid for her daughter’s

schooling, the taxes and maintenance on Mrs. Alioto’s personal

residence, Mayor Alioto’s legal secretary to assist with the

multitude of litigation matters that arose after his death, and

expenses to look for employment.

On or about January 20, 1999, Mrs. Alioto filed a request

for relief pursuant to section 6015 from joint and several

liability for income taxes for 1995 and 1996. Mrs. Alioto

admitted that relief pursuant to section 6015(b) or (c) is not

available for 1995 or 1996, but Mrs. Alioto requested relief

pursuant to section 6015(f) for 1995 and 1996. Appeals Officer

Nelson Wong was assigned to consider Mrs. Alioto’s request.
 - 14 -

At the request of Appeals, from March 1999 to April 2000

Revenue Agent Theresa Martin investigated the merits of Mrs.

Alioto’s claim for section 6015 relief. Ms. Martin was assigned

to assess the claim, find the facts, apply the law, and make a

determination.

Ms. Martin held three meetings with Mrs. Alioto’s

representative. Mrs. Alioto’s counsel turned over to the IRS all

requested documents that she was able to obtain. Additionally,

Mrs. Alioto’s counsel orally gave Ms. Martin the information that

she requested when no documents were available. It took Ms.

Martin 3 days to review all the documentation that Mrs. Alioto

and/or Mrs. Alioto’s counsel provided her.

When Ms. Martin met with Mrs. Alioto’s counsel, Ms. Martin

was alerted to the number of creditors who had filed claims

against the estate and the amounts of additional liabilities

being discovered in Mayor Alioto’s probate proceedings. Mrs.

Alioto’s counsel explained to Ms. Martin Mrs. Alioto’s fiduciary

duties as trustee of the trust. Mrs. Alioto’s counsel further

explained to Ms. Martin that the assets transferred into trusts

were not Mrs. Alioto’s personal assets.

Ms. Martin consulted with respondent’s Collection Division

regarding amounts to allow for basic living expenses. Ms. Martin

did not request a financial statement from Mrs. Alioto, and the

Collection Division did not have one either.
 - 15 -

On August 19, 1999, real property in Auburn, California,

titled in Mrs. Alioto’s name, was sold for $2.4 million.

Pursuant to a lien on the property, the IRS received

$1,841,197.39 from the sale of the real property in Auburn,

California, and applied these proceeds to Mayor Alioto’s separate

liability for 1976.

By September 1999 the IRS applied $955,374.85 of the over $2

million of the New England Patriots case fees it had seized to

the premarital (regarding Mrs. Alioto) 1977 tax liability of

Mayor Alioto and Angelina, paying it in full. After satisfying

the 1977 liability, around September 1999 the IRS applied the

balance of the New England Patriots case fees, over $1 million,

it seized to the premarital (regarding Mrs. Alioto) 1976 tax

liability of Mayor Alioto. Mrs. Alioto’s community property was

used to relieve Angelina (Mayor Alioto’s former spouse) of

liability for 1976 and to pay Mayor Alioto’s liability for 1977

while Mrs. Alioto remained liable for the joint community

liability for 1995 and 1996.

During 1999 Mrs. Alioto worked for Connell & Co. and the San

Francisco Unified School District. During 1999 she earned

$179,000--$30,000 of which was a fee from the estate. For 1999

she paid $79,000 in taxes.

On October 26, 1999, the Court entered a stipulated

decision, agreed to by Mrs. Alioto and respondent, in docket No.
 - 16 -

3013-95 which ordered and decided that pursuant to section

6015(b) Mrs. Alioto was relieved, in full, of liability for

deficiencies in income tax and section 6662 penalties for 1989,

1990, and 1991.

During 2000 Mrs. Alioto secured a position as a fundraiser

for the City College of San Francisco (City College). She still

was employed in that position, at will,9 by City College as of

the time of trial. In 2003 she earned $121,000. Mrs. Alioto

received a 4-percent raise in 2004, but she received no raises

before 2004 because of cutbacks. In order to have pension

“rights” at City College, Mrs. Alioto would have to work for 10

years (until she was age 67).

In October 2000, pursuant to the probate court’s oral

instruction, Mrs. Alioto placed all the cash she held as trustee

of the Alioto Living Trust10 into a blocked account subject to

probate court supervision. The probate court authorized Mrs.

Alioto to use $405,000 to pay the trust’s Federal and State 2000

income taxes.

9
Mrs. Alioto could lose this job at any time--especially
if the chancellor or trustees of City College (who are elected
every 2 years) change.
10
On Oct. 3, 1997, the Alioto Living Trust document was
executed.
 - 17 -

During 2001 and 2002 Mrs. Alioto or her counsel provided

respondent’s Appeals Office copies of pleadings filed in the

probate court and information about the probate proceedings.

During 2002 the probate referee made a final recommendation

that Mrs. Alioto’s personal residence was community property.

The probate judge decided that Mrs. Alioto’s personal residence

was to be sold to pay Mayor Alioto’s creditors. Respondent’s

Appeals Office was advised of the aforementioned decisions. In

January 2003 the Appeals officer assigned to Mrs. Alioto’s case

inserted into the administrative record a newspaper article that

reported that Mrs. Alioto was being forced to sell her personal

residence in order to pay Mayor Alioto’s debts.

On May 29, 2003, respondent determined that Mrs. Alioto was

not entitled to relief pursuant to section 6015(f) for 1995 or

1996.

In September 2003, pursuant to an order from the probate

court, Mrs. Alioto’s personal residence was sold for $6.6

million. On October 29, 2003, pursuant to additional orders from

the probate court, the following amounts were paid to creditors

of the estate:
 - 18 -

Creditor Amount

IRS $175,968.06
Angelina 325,945.21
Fred Furth 571,884.95
Alioto Fish Co. 276,657.53
Franchise Tax Board 2,585,756.61
City National Bank 1,036,526.40
Total 4,972,738.76

The balance of the proceeds (approximately $1.6 million) is on

deposit with the probate court. As of November 1, 2003, the

total accrued tax liability for 1995 and 1996 was $1,558,221.54.

As of November 30, 2003, outstanding creditors’ claims against

Mayor Alioto’s estate included:11

Creditor Amount

IRS $5,236,067.90
Franchise Tax Board 876,564.54
Fred Furth 125,248.00
Angelina 579,966.00
Richard Schwartz 210,000.00
Maxwell Keith 42,500.00
Arlene Harris 92,000.00
Pacific Bank 551,226.45
Total 7,713,572.89

Between 1994 and 1999 respondent collected $4,685,444.47

from the community income and assets of Mrs. Alioto and Mayor

Alioto. Respondent applied the entire $4,685,444.47 collected to

Mayor Alioto’s separate, premarital tax liabilities for 1976 and

1977. During the process of collecting Mayor Alioto’s 1976 and

1977 tax liabilities and Mayor Alioto’s and Mrs. Alioto’s joint

11
Not including the IRS, the amount of outstanding
creditors’ claims as of Nov. 30, 2003, totaled $2,477,504.99.
 - 19 -

tax liabilities, respondent’s collection officers did not have

any direct contact with Mrs. Alioto.

There are no unpaid tax liabilities due from Mrs. Alioto

regarding her timely filed tax returns for 1997 through 2002.

As of the date of trial, Mrs. Alioto had approximately $7,000 in

a savings account and $99,000 deposited in retirement plans and

did not own a car. The Social Security Administration estimated

her benefits will be $600 per month. In June 2008 Mrs. Alioto

turned 64 years old.

OPINION

I. Jurisdiction and Motion To Vacate

Whether this Court has jurisdiction is fundamental and may

be raised by a party or on the Court’s own motion. Fernandez v.

Commissioner, 114 T.C. 324, 328 (2000). In petitioner’s motion

to vacate our order of dismissal and responses thereto,

petitioner and respondent agree that pursuant to the Tax Relief

and Health Care Act of 2006 (TRHCA), Pub. L. 109-432, div. C,

sec. 408, 120 Stat. 3061, the Tax Court now has jurisdiction over

the case at bar. The fact that the parties agree that the Court

has jurisdiction over these issues is not sufficient to provide

us with such jurisdiction; the Court still must determine that

Congress has granted us jurisdiction. See Evans Publg., Inc. v.

Commissioner, 119 T.C. 242, 247 n.5 (2002).
 - 20 -

TRHCA, div. C, sec. 408, amended the Tax Court’s section

6015 jurisdiction. TRHCA provided the Tax Court with

jurisdiction over “stand-alone” section 6015(f) cases where the

liability for the taxes arose or remained unpaid on or after the

date of the enactment of TRHCA (i.e., December 20, 2006). Id.

As of December 20, 2006, Mrs. Alioto’s income taxes for 1995

and 1996 remained unpaid. Accordingly, the Court has

jurisdiction to determine whether Mrs. Alioto is entitled to

section 6015(f) relief for 1995 and 1996. Therefore we shall

grant Mrs. Alioto’s motion to vacate order of dismissal, as

supplemented.

II. Motion for Reconsideration

Respondent objects to the motion for reconsideration as “the

court’s opinion in this case [Alioto I] correctly interpreted and

applied section 6015(f) and applicable case law to this case when

the opinion in this case was issued.” We agree that the Court

correctly applied the caselaw as it existed at the time the Court

issued Alioto I; however, we disagree that the motion for

reconsideration should be denied.12 After the Court’s decision

in Alioto I the law and the Court’s jurisdiction changed.

12
The granting of a motion for reconsideration rests
within the discretion of the Court, and we will not grant a
motion for reconsideration unless the party seeking
reconsideration shows unusual circumstances or substantial error.
See, e.g., Alexander v. Commissioner, 95 T.C. 467, 469 (1990),
affd. without published opinion sub nom. Stell v. Commissioner,
999 F.2d 544 (9th Cir. 1993).
 - 21 -

Pursuant to section 6015 as amended by TRHCA, on the facts of the

case at bar the Court has jurisdiction to determine whether Mrs.

Alioto is entitled to section 6015(f) relief for 1995 and 1996.

Accordingly, we shall grant Mrs. Alioto’s motion for

reconsideration.

III. Scope of Review

Respondent argues that when the Court determines whether

Mrs. Alioto is entitled to section 6015(f) relief for 1995 and

1996, the Court is limited to the administrative record and may

not consider evidence introduced at trial that was not included

in the administrative record. We disagree.

In Ewing v. Commissioner, 122 T.C. 32 (2004) (Ewing II),13

vacated 439 F.3d 1009 (9th Cir. 2006) (Ewing III), the Court held

that our determination of whether a taxpayer is entitled to

section 6015(f) relief is made in a trial de novo and the Court

may consider evidence and matters at trial which were not

included in the administrative record. In Ewing III, the U.S.

Court of Appeals for the Ninth Circuit--the court to which appeal

of this case lies--vacated Ewing II for lack of jurisdiction but

did not address our holding as to the scope of review. Ewing

13
In “Ewing I”, Ewing v. Commissioner, 118 T.C. 494
(2002), revd. 439 F.3d 1009 (9th Cir. 2006), we held that the
Court had jurisdiction to determine whether equitable relief was
available to taxpayer for underpayment of tax shown on joint
return (i.e., over “stand-alone” sec. 6015(f) cases).
 - 22 -

III, supra at 1015 (“In light of our conclusion that the Tax

Court did not have jurisdiction over Ewing’s petition, we vacate

the Tax Court decision in Ewing II, 122 T.C. 32, addressing the

scope of review by the Tax Court”), id. n.6 (“Because we conclude

that the Tax Court lacked jurisdiction, we decline to address the

other issues [i.e., the scope of review] raised in the

Commissioner’s appeal.”), vacating Ewing II and revg. 118 T.C.

494 (2002).

In Porter v. Commissioner, 130 T.C. __ (2008), we recently

addressed the aforementioned issue of the scope of our review in

section 6015(f) cases. For the reasons stated in Porter and

Ewing II, when the Court determines whether a taxpayer is

entitled to section 6015(f) relief the Court’s determination is

made in a trial de novo and the Court is not limited to the

administrative record; i.e., the Court may consider evidence and

matters at trial which were not part of the administrative

record.14 Porter v. Commissioner, supra; Ewing II, supra.

IV. Section 6015(f) Relief

Section 6015(f) allows relief to a requesting spouse “if--

(1) taking into account all the facts and circumstances, it is

inequitable to hold the individual liable”. The Commissioner

14
We note that if we were limited to reviewing the
administrative record, it is likely that the outcome in this case
would be different.
 - 23 -

applies Rev. Proc. 2000-15,15 sec. 4.01, 2000-1 C.B. 447, 448, to

determine whether to grant equitable relief. See, e.g.,

Washington v. Commissioner, 120 T.C. 137, 147-152 (2003); Jonson

v. Commissioner, 118 T.C. 106, 125-126 (2002), affd. 353 F.3d

1181 (10th Cir. 2003); Nihiser v. Commissioner, T.C. Memo. 2008-

135.

Rev. Proc. 2000-15, sec. 4.01 has seven general requirements

that all requesting spouses must meet for relief pursuant to

section 6015(f). Respondent concedes that Mrs. Alioto meets the

guidelines for relief set forth in Rev. Proc. 2000-15, sec.

4.01(1)-(7).

A. Safe Harbor: Rev. Proc. 2000-15, Sec. 4.02

Revenue Procedure 2000-15, supra, also has a safe harbor

whereby the IRS ordinarily will grant relief pursuant to section

6015(f) (safe harbor). Nihiser v. Commissioner, supra; Gonce v.

Commissioner, T.C. Memo. 2007-328 (discussing identical

provisions in Rev. Proc. 2003-61, sec. 4.02, 2003-2 C.B. 296,

298); Billings v. Commissioner, T.C. Memo. 2007-234 (“The

procedure also has a safe harbor--three conditions that, if met,

15
Rev. Proc. 2000-15, 2000-1 C.B. 447, has been superseded
by Rev. Proc. 2003-61, 2003-2 C.B. 296. The new revenue
procedure applies only to requests for relief filed on or after
Nov. 1, 2003, or those pending on Nov. 1, 2003, for which no
preliminary determination letter has been issued as of that date.
Id. sec. 7, 2003-2 C.B. at 299. In May 2003 respondent
determined Mrs. Alioto was not eligible for sec. 6015 relief.
Accordingly, we apply Rev. Proc. 2000-15, supra, to this case.
 - 24 -

will ordinarily trigger a grant of relief.”); Rev. Proc. 2000-15,

sec. 4.02, 2000-1 C.B. at 448 (titled “Circumstances under which

equitable relief under § 6015(f) will ordinarily be granted”).

The safe harbor grants relief to a requesting spouse if the

requesting spouse meets three conditions.16 Nihiser v.

Commissioner, supra; see Rev. Proc. 2000-15, sec. 4.02.

1. First Safe Harbor Condition

The first safe harbor condition is:

At the time relief is requested, the requesting spouse
is no longer married to, or is legally separated from,
the nonrequesting spouse, or has not been a member of
the same household as the nonrequesting spouse at any
time during the 12-month period ending on the date
relief was requested;

Rev. Proc. 2000-15, sec. 4.02(1)(a). Mayor Alioto died in

January 1998. Accordingly, we conclude that Mrs. Alioto

satisfied the first safe harbor condition.

16
Relief that the Commissioner ordinarily grants pursuant
Rev. Proc. 2000-15, sec. 4.02(1), 2000-1 C.B. at 448, is subject
to the limitations set forth in Rev. Proc. 2000-15, sec. 4.02,
2000-1 C.B. at 448--(a) if the return is or has been adjusted to
reflect an understatement of tax, relief will be available only
to the extent of the liability shown on the return before any
such adjustment; and (b) relief will only be available to the
extent that the unpaid liability is allocable to the
nonrequesting spouse. Respondent did not address Rev. Proc.
2000-15, sec. 4.02(2), on brief. Accordingly, we deem that
respondent has waived any issue regarding Rev. Proc. 2000-15,
sec. 4.02(2). See Petzoldt v. Commissioner, 92 T.C. 661, 683
(1989); Levert v. Commissioner, T.C. Memo. 1989-333, affd.
without published opinion 956 F.2d 264 (5th Cir. 1992).
 - 25 -

2. Second Safe Harbor Condition

The second safe harbor condition is:

At the time the return was signed, the requesting
spouse had no knowledge or reason to know that the tax
would not be paid. The requesting spouse must
establish that it was reasonable for the requesting
spouse to believe that the nonrequesting spouse would
pay the reported liability. If a requesting spouse
would otherwise qualify for relief under this section,
except for the fact that the requesting spouse had no
knowledge or reason to know of only a portion of the
unpaid liability, then the requesting spouse may be
granted relief only to the extent that the liability is
attributable to such portion; * * *

Id. sec. 4.02(1)(b). This factor is satisfied if the taxpayer

reasonably believed when the return was filed that the liability

would be paid by the taxpayer’s spouse. See Van Arsdalen v.

Commissioner, T.C. Memo. 2007-48 (the taxpayer reasonably

believed taxes owed would be paid by the spouse); Wiest v.

Commissioner, T.C. Memo. 2003-91 (same).

Respondent argued that Mrs. Alioto would have seen or known

about certain notices of Federal tax liens and levies that were

filed on her community property. Respondent relies on the

testimony of Revenue Officer Cheryl Matthews.

We determine the credibility of each witness, weigh each

piece of evidence, draw appropriate inferences, and choose

between conflicting inferences. See Neonatology Associates, P.A.

v. Commissioner, 115 T.C. 43, 84 (2000), affd. 299 F.3d 221 (3d

Cir. 2002); see also Gallick v. Baltimore & O.R. Co., 372 U.S.

108, 114-115 (1963); Boehm v. Commissioner, 326 U.S. 287, 293
 - 26 -

(1945); Wilmington Trust Co. v. Helvering, 316 U.S. 164, 167-168

(1942). We decide whether evidence is credible on the basis of

objective facts, the reasonableness of the testimony, and the

demeanor of the witness. Quock Ting v. United States, 140 U.S.

417, 420-421 (1891); Wood v. Commissioner, 338 F.2d 602, 605 (9th

Cir. 1964), affg. 41 T.C. 593 (1964); Pinder v. United States,

330 F.2d 119, 124-125 (5th Cir. 1964); Concord Consumers Hous.

Coop. v. Commissioner, 89 T.C. 105, 124 n.21 (1987). We have

evaluated each witness’s testimony by observing his or her

candor, sincerity, and demeanor and by assigning weight to the

elicited testimony. See Neonatology Associates, P.A. v.

Commissioner, supra at 84.

We found Ms. Matthews’s testimony to be general, vague,

conclusory, and/or questionable in certain material respects.

Under the circumstances presented here, we are not required to,

and generally do not, rely on Ms. Matthews’s testimony. See

Lerch v. Commissioner, 877 F.2d 624, 631-632 (7th Cir. 1989),

affg. T.C. Memo. 1987-295; Geiger v. Commissioner, 440 F.2d 688,

689-690 (9th Cir. 1971), affg. per curiam T.C. Memo. 1969-159;

Tokarski v. Commissioner, 87 T.C. 74, 77 (1986). The Court need

not accept at face value a witness’s testimony that is otherwise

questionable. See Archer v. Commissioner, 227 F.2d 270, 273 (5th

Cir. 1955), affg. a Memorandum Opinion of this Court dated Feb.

18, 1954; Weiss v. Commissioner, 221 F.2d 152, 156 (8th Cir.
 - 27 -

1955), affg. T.C. Memo. 1954-51; Schroeder v. Commissioner, T.C.

Memo. 1986-467. This is so even when the testimony is

uncontroverted if it is improbable, unreasonable, or

questionable. Archer v. Commissioner, supra; Weiss v.

Commissioner, supra; see Quock Ting v. United States, supra.

We conclude the evidence that respondent relies on is not

credible or probative and is insufficient to conclude that Mrs.

Alioto saw or knew about any notices of liens or tax levies.

Mrs. Alioto’s testimony on this matter, however, was credible.

Upon the basis of Mrs. Alioto’s credible testimony, we find that

Mrs. Alioto never saw or knew about any notices of liens or tax

levies or any seizures of property until after Mayor Alioto’s

death.

Mrs. Alioto credibly testified that she did not learn about

the tax liabilities in issue (for 1995 or 1996) until after Mayor

Alioto’s death and that she was not aware of Mayor Alioto’s tax

problems or any dispute with regard to the New England Patriots

case fees when she signed the 1996 tax return. Mrs. Alioto never

met with or spoke with anyone at the accounting firm that

prepared Mayor Alioto and Mrs. Alioto’s joint tax returns for the

years in issue (or for any year she was married to Mayor Alioto).

Furthermore, we find Mrs. Alioto’s beliefs regarding her

financial well-being and solvency--until she learned otherwise

after Mayor Alioto’s death in 1998--to be credible.
 - 28 -

Mrs. Alioto did not learn of the MSA Mayor Alioto had

executed until after his death. At the time the 1995 and 1996

tax returns were filed, Mrs. Alioto did not know or have reason

to know that Mayor Alioto had obligated himself to indemnify and

defend Angelina with respect to Mayor Alioto and Angelina’s

outstanding joint Federal and State tax liabilities for 1976 and

1977.

The 1995 return, filed in October 1996 but which Mrs. Alioto

did not sign and never discussed with Mayor Alioto, reported a

total balance due of $63,115. At that time Mayor Alioto was due

legal fees totaling approximately $2.1 million from the New

England Patriots case. Mayor Alioto was involved in the New

England Patriots case because the case involved Mrs. Alioto’s

family.

The 1996 return, filed in October 1997, reported a balance

due of zero. Mrs. Alioto reviewed the 1996 return, and she saw

an estimated tax payment of $838,311 and a total balance due of

zero, before she signed it. When Mrs. Alioto signed the 1996

return, she reasonably believed that any tax liability shown on

the 1996 return had been paid. Mrs. Alioto knew that Mayor

Alioto had earned the New England Patriots case fees, that Mayor

Alioto had earned another $1 million fee in 1997, and that Mayor

Alioto had a number of other lawsuits that he was attorney of

record for in which he would earn additional income. In fall
 - 29 -

1997 Mrs. Alioto reasonably believed, on the basis of statements

made by Mayor Alioto, that he had cases pending that would bring

in more money than he had earned in his entire career.

During August through October 1997 Mayor Alioto and Mrs.

Alioto met with an estate planning lawyer to discuss drafting an

estate plan for each of them. Mayor Alioto gave the attorney a

list of assets and liabilities and their approximate values. The

attorney reasonably believed that at that time Mayor Alioto and

Mrs. Alioto had a net worth of $16 million. Accordingly, we find

that it was reasonable for Mrs. Alioto to believe that her net

worth as of October 1997 was $16 million. Mrs. Alioto reasonably

believed that she and her husband had a high net worth and that

Mayor Alioto earned a lot of money every year that they were

married.

In Gonce v. Commissioner, T.C. Memo. 2007-328, we held that

the second criterion in Rev. Proc. 2000-15, sec. 4.02, that at

the time the joint return was signed the requesting spouse had no

knowledge or reason to know that the tax would not be paid and

that it was reasonable to believe that the nonrequesting spouse

would pay the liability, was not satisfied. In Gonce, the

taxpayer and her husband reported underpayments on their 2000 and

2001 Federal tax returns, both of which were signed by the

taxpayer, of $1,188 and $2,528, respectively. Id. When those

returns were filed, the taxpayer knew that her husband always
 - 30 -

bought on credit and that she and her husband spent more than

they made. We concluded that the taxpayer did not show that it

was reasonable to rely on her husband to pay the tax due for

those years.

The facts in the case at bar are diametrically opposed to

those in Gonce. Mrs. Alioto credibly testified that Mayor Alioto

had paid off over $18 million in debts. Mrs. Alioto reasonably

believed, when the returns for 1995 and 1996 were filed, that

Mayor Alioto would continue to pay off any debts that he owed.

During Mayor Alioto’s negotiations with the IRS regarding the

Aliotos’ outstanding joint tax liabilities for 1995 and 1996,

Mayor Alioto worked arduously to protect the well-being and

financial interests of Mrs. Alioto. Furthermore, if Mrs. Alioto

had seen the 1995 return in October 1996, showing a balance due,

she would have expected Mayor Alioto to pay the liability in full

as she thought Mayor Alioto paid all their taxes. Mrs. Alioto

credibly testified that she did not recall ever being asked to

sign a joint tax return with Mayor Alioto that reflected a

balance due. Mrs. Alioto credibly testified that had she seen a

balance due on any tax return, she would have expected Mayor

Alioto to pay it on account of his history of paying off their

obligations/debts and the debts of his son.

During the years in issue Mrs. Alioto reasonably believed

that Mayor Alioto was a man of wealth, a man who was on top of
 - 31 -

everything, and a man in control. The credible evidence

establishes that Mayor Alioto believed it was his absolute duty

to care and provide for his family. From 1980 to 1998 Mrs.

Alioto cared for Mayor Alioto and raised their children. During

this time Mayor Alioto did not want Mrs. Alioto to work outside

the home. Furthermore, Mayor Alioto was in charge of the family

finances and tax matters. Mrs. Alioto did not sign the 1995

return and was not aware that any tax was due for 1995 or 1996

until years later. These facts further support the conclusion

that Mrs. Alioto did not know, or have reason to know, of the

1995 and 1996 underpayments. See Dowell v. Commissioner, T.C.

Memo. 2007-326 (concluding that the taxpayer did not know, or

have reason to know because: (1) The requesting spouse did not

sign the return for the year in issue; (2) the requesting spouse

was not aware that any tax was due for the year in issue until

years later; and (3) the nonrequesting spouse handled all tax

matters for the couple and did not inform the requesting spouse

of financial matters).

Accordingly, we conclude that Mrs. Alioto satisfied the

second safe harbor condition.
 - 32 -

3. Third Safe Harbor Condition

The third safe harbor condition is:

The requesting spouse will suffer economic hardship if
relief is not granted. For purposes of this section,
the determination of whether a requesting spouse will
suffer economic hardship will be made by the
Commissioner or the Commissioner’s delegate, and will
be based on rules similar to those provided in
§ 301.6343-1(b)(4) of the Regulations on Procedure
and Administration.

Rev. Proc. 2000-15, sec. 4.02(1)(c).

Generally, economic hardship exists if collection of the tax

liability will cause the taxpayer to be unable to pay reasonable

basic living expenses. Butner v. Commissioner, T.C. Memo. 2007-

136. The ability to pay reasonable basic living expenses is

determined by considering the following nonexclusive factors:

(1) The taxpayer’s age, employment status and history, ability to

earn, and number of dependents; (2) an amount reasonably

necessary for food, clothing, housing, medical expenses,

transportation, current tax payments, and expenses necessary to

the taxpayer’s production of income; (3) the cost of living in

the taxpayer’s geographic area; (4) the amount of property

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

extraordinary circumstances; i.e., special education expenses, a

medical catastrophe, or a natural disaster; and (6) any other

factor bearing on economic hardship. Sec. 301.6343-1(b)(4),

Proced. & Admin. Regs.; see Gonce v. Commissioner, T.C. Memo.

2007-328; Van Arsdalen v. Commissioner, T.C. Memo. 2007-48.
 - 33 -

These provisions envision consideration of a taxpayer’s

retirement needs where appropriate. Van Arsdalen v.

Commissioner, supra.

In 1966 Mrs. Alioto received a B.A. in English literature

from Manhattanville College of the Sacred Heart in Purchase, New

York, and she began work as a third grade teacher in Bedford-

Stuyvesant, New York, at an annual salary of $5,400. For the

next 3 years Mrs. Alioto worked as an elementary school teacher

at P.S. 113 in Harlem, New York. She was paid less than $6,000

per year for this job. From 1971 to 1973 Mrs. Alioto taught

emotionally disturbed children in an inner city neighborhood of

Boston, Massachusetts. In 1973 Mrs. Alioto was elected a member

of the Boston Public School Board. From 1974 to 1980 she served

without pay as a member of the Boston Public School Board.

During this period Mrs. Alioto went back to school, and in 1980

she earned a Ph.D. in education. From 1980 to 1998 Mrs. Alioto

cared for Mayor Alioto, raised their children, and did not work

outside the home.

In April 1998 administration of the estate was commenced.

Creditors, including the IRS and the California State Franchise

Tax Board, filed claims in excess of $74 million against the

estate. The claim filed by the IRS in the probate case,

including the liabilities in dispute in this case, totaled

$4,239,834.34. At that time, Mrs. Alioto was shocked, surprised,
 - 34 -

and stunned to learn the amounts of the creditors’ claims that

were being asserted against the estate. After learning the

magnitude of the claims against the estate and how much of her

community property had already been used to pay Mayor Alioto’s

separate debts, Mrs. Alioto filed a creditor’s claim in the

probate proceeding. None of her claim will be paid.

When the IRS employee assigned to Mrs. Alioto’s section 6015

case met with Mrs. Alioto’s counsel, she was alerted to the

number of creditors who had filed claims against the estate and

the amounts of additional liabilities being discovered in Mayor

Alioto’s probate proceedings. Neither the IRS employee assigned

to Mrs. Alioto’s section 6015 case nor the Collection Division

requested a financial statement from Mrs. Alioto.

During 2001 and 2002 Mrs. Alioto or her counsel provided

respondent’s Appeals Office copies of pleadings filed in the

probate court and information about the probate proceedings.

During 2002 the probate referee made a final recommendation that

Mrs. Alioto’s personal residence was community property. The

probate judge decided that Mrs. Alioto’s personal residence was

to be sold to pay Mayor Alioto’s creditors. Respondent’s Appeals

Office was advised of these decisions. Additionally, in January

2003 the Appeals officer assigned to Mrs. Alioto’s case inserted

into the administrative record a newspaper article that reported
 - 35 -

that Mrs. Alioto was being forced to sell her personal residence

in order to pay Mayor Alioto’s debts.

During 1998, Mrs. Alioto earned $50,000. Mrs. Alioto’s

family health insurance terminated in 1998 (at the time of Mayor

Alioto’s death). During 1999, Mrs. Alioto earned $179,000--

$30,000 of which was a fee from the estate. For 1999, Mrs.

Alioto paid $79,000 in taxes. Mrs. Alioto incurred medical

expenses for treating, among other things, her daughter’s

epilepsy. Mrs. Alioto reasonably estimated that she incurred

medical expenses of approximately $22,000 in both 1998 and 1999.

During 2000, Mrs. Alioto secured a position as a fundraiser

for the City College of San Francisco (City College). She still

was employed in that position by City College as of the time of

trial. However, this position is a year-to-year job with no

tenure--Mrs. Alioto could lose her job at any time, especially if

the chancellor or trustees of City College (who are elected every

2 years) changed.

In 2003 Mrs. Alioto earned $121,000. Mrs. Alioto received a

4-percent raise in 2004, but she received no raises before 2004.

To have pension “rights” at City College, Mrs. Alioto would have

to work for 10 years (until she was age 67).

In December 2, 2004, respondent served on the Clerk of the

San Francisco Superior Court, Bank of the West, Oakland,

California, Mrs. Alioto, and her counsel separate notices of levy
 - 36 -

with a total amount due of $1,628,235.48. The notices of levy

indicated that $129,842.97 was for her 1995 tax year and that

$1,498,392.51 was for her 1996 tax year.

As of the date of trial Mrs. Alioto had approximately $7,000

in a savings account and $99,000 deposited in retirement plans

and did not own a car. The Social Security Administration

estimated her benefits will be $600 per month. In June 2008 Mrs.

Alioto turned 64 years old. As of December 20, 2006, Mrs.

Alioto’s balances due for 1995 and 1996 were $153,501 and

$1,832,010, a very substantial sum given her financial situation.

The liabilities in issue would cause Mrs. Alioto significant

hardship, and she provided sufficient information to show her

liabilities significantly exceeded her assets. See Farmer v.

Commissioner, T.C. Memo. 2007-74.

Considering Mrs. Alioto’s age, employment status and

history, ability to earn, and number of dependents; the amounts

reasonably necessary for food, clothing, housing, medical

expenses, transportation, current tax payments, and expenses

necessary to her production of income; the cost of living in her

geographic area; and the amount of property available to satisfy

her expenses, we find that she would suffer economic hardship

because payment of the underlying liabilities would prevent her

from paying reasonable basic living expenses. See sec.

301.6343-1(b)(4), Proced. & Admin. Regs.; see also Butner v.
 - 37 -

Commissioner, T.C. Memo. 2007-136; Farmer v. Commissioner, supra.

Accordingly, we conclude that Mrs. Alioto has satisfied the third

safe harbor condition.

B. Conclusion

Mrs. Alioto satisfies the safe harbor conditions in Rev.

Proc. 2000-15, sec. 4.02. Accordingly, respondent’s

determination that Mrs. Alioto did not qualify for relief

pursuant to section 6015(f) was an abuse of discretion; i.e., it

was arbitrary, capricious, and without sound basis in law or

fact.

To reflect the foregoing,

An appropriate order and

decision will be entered.