Schwind v. Comm'r

T.C. Summary Opinion 2008-119

UNITED STATES TAX COURT

JANE FRANCES SCHWIND, f.k.a. JANE FRANCES SKOLNICK, Petitioner
v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 12663-06S. Filed September 9, 2008.

Jane Frances Schwind, pro se.

Michael T. Sargent, for respondent.

GOLDBERG, Special Trial Judge: This case was heard pursuant

to the provisions of section 7463 of the Internal Revenue Code in

effect when the petition was filed. Pursuant to section 7463(b),

the decision to be entered is not reviewable by any other court,

and this opinion shall not be treated as precedent for any other

case. Unless otherwise indicated, subsequent section references
 - 2 -

are to the Internal Revenue Code as amended, and all Rule

references are to the Tax Court Rules of Practice and Procedure.

This case arises from a request for relief from joint and

several liability under section 6015(f) with respect to

petitioner’s unpaid joint tax liability for 2003. No notice of

deficiency was issued. The issues for decision are whether

petitioner is entitled to relief from joint and several liability

under section 6015(f) and whether she is entitled to a refund of

amounts paid towards the liability under section 6015(g)(1).1

Background

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

The stipulation of facts and the exhibits received into evidence

are incorporated herein by reference. When the petition

was filed, petitioner resided in Maryland.

In September 2001 petitioner married David Skolnick (Mr.

Skolnick). Petitioner worked and continues to work as a

registered nurse. Mr. Skolnick was employed as an engineer by

Zeta Associates, Inc. (Zeta), until June 2003 when his employer

terminated his employment, but he found new employment by the end

of 2003.

1
Although petitioner requested relief under sec. 6015(b),
(c), or (f), her liability results from an underpayment of tax on
account of overstated withholdings, not an understatement of tax
(as defined by sec. 6662(d)(2)(A)) or a deficiency (defined by
sec. 6211). See sec. 6015(b)(3), (c)(1). Thus, petitioner is
not entitled to relief under sec. 6015(b) or (c), and the Court’s
review is limited to sec. 6015(f).
 - 3 -

On December 13, 2003, Mr. Skolnick sold his stock holdings

in Zeta for $99,899.91; no Federal income tax was withheld.

Around March 2004 Mr. Skolnick deposited the check for the stock

proceeds into his and petitioner’s joint checking account.

Although the joint account was used to deposit their paychecks

and to pay household bills, petitioner was not allowed to open or

to review the account statements.

Around April 2004 Mr. Skolnick prepared and electronically

filed a joint Form 1040, U.S. Individual Income Tax Return, for

2003. Petitioner’s participation in the preparation of the Form

1040 was limited to providing Mr. Skolnick with her “W-2s”. But

petitioner was allowed to review the Form 1040 after Mr. Skolnick

had filed it. Among other things, Mr. Skolnick reported the

following:

Description Amount

Taxable income (line 40) $205,171
Total tax (line 60) 41,482
Withholdings (line 61) 66,332
Excess Social Security 1,831
Overpayment 26,681

Third-party-payor records, however, showed withholdings

totaling $36,331 ($3,795 was withheld on petitioner’s wages and

$32,536 was withheld on Mr. Skolnick’s wages). Respondent

determined that the Skolnicks had overstated their withholdings

by $30,001, and he reduced their “Payments” by that amount. In
 - 4 -

May 2005 respondent issued a Notice CP2000, reflecting a

“Proposed Balance Due” of $31,656.

In the interim Mr. Skolnick had left the marital home in

January 2005. Petitioner left the marital home in March 2005.

Mr. Skolnick and petitioner instituted divorce proceedings in

2005; the divorce was finalized in February 2006. In January

2006 petitioner and Mr. Skolnick entered into a “Property And

Support Settlement Agreement” (property settlement). In

pertinent part, the property settlement provides:

[t]he parties agree that they have potential joint tax
liability for 2003 for at least [$31,656 * * * Mr.
Skolnick paid $31,656 to the Internal Revenue Service
(IRS), and petitioner paid half of the amount to him as
her share of the liability. If there are additional
tax liabilities for 2003, Mr. Skolnick agrees to pay
them. If the IRS determines that any part of the 2003
tax liability is not due and refunds it, the parties
agree to split it. If penalties or interest for 2003
are refunded, the parties agree that Mr. Skolnick is
entitled to it].

While the divorce was pending, petitioner submitted a Form

8857, Request for Innocent Spouse Relief (And Separation of

Liability and Equitable Relief), to the IRS in June 2005.2 In

August 2005 she submitted a Form 12510, Questionnaire for

Requesting Spouse. The IRS issued a preliminary determination in

2
Mr. Skolnick was notified that petitioner was seeking
relief from joint and several liability and that he had a right
to intervene in the matter. He did not respond to letters from
the IRS or exercise his right to intervene in petitioner’s Tax
Court case.
 - 5 -

November 2005. It denied relief under section 6015(b), (c), and

(f), reasoning:

Information contained in your case indicates that you
had knowledge and/or reason to know of the item that
gave rise to the tax deficiency. There was too much
withholding claimed on the return and you did not
review the return. You failed your duty of inquiry at
the time of filing.

Petitioner appealed to the Appeals Office (Appeals) in

December 2005. Appeals issued a notice of determination on March

30, 2006. It states that relief was denied because the item

“leading to the understatement was not attributable” to Mr.

Skolnick.

In the interim Mr. Skolnick had made a $31,656 payment on

behalf of himself and petitioner in January 2006. On February 6,

2006, the IRS determined that petitioner and Mr. Skolnick were

liable for a $3,000 addition to tax under section 6651(a)(2),

plus interest. According to the notice of determination, the

unpaid balance of income tax due from petitioner was $4,367.17 as

of March 30, 2006. The amount of relief of 2003 income tax

petitioner sought was $30,001.

Discussion

I. Burden of Proof

Except as otherwise provided in section 6015, petitioner

bears the burden of proof with respect to her entitlement to

relief from joint and several liability. See Rule 142(a); Alt v.
 - 6 -

Commissioner, 119 T.C. 306, 311 (2002), affd. 101 Fed. Appx. 34

(6th Cir. 2004).

II. Joint and Several Liability and Section 6015(f) Relief

Section 6013(d)(3) provides that if a joint return is filed,

the tax is computed on the taxpayers’ aggregate income, and

liability for the resulting tax is joint and several. See also

sec. 1.6013-4(b), Income Tax Regs. But the IRS may relieve a

taxpayer from joint and several liability under section 6015 in

certain circumstances. An individual may be relieved from joint

and several liability under section 6015(f) if, taking into

account all the facts and circumstances, it is inequitable to

hold the taxpayer liable for any unpaid tax or deficiency and he

does not qualify for relief under section 6015(b) or (c).

To guide IRS employees in exercising their discretion, the

Commissioner has issued revenue procedures that list the factors

they should consider. The Court also uses the factors when

reviewing the IRS’s denial of relief. See Washington v.

Commissioner, 120 T.C. 137, 147-152 (2003); Rev. Proc. 2003-61,

2003-2 C.B. 296, modifying and superseding Rev. Proc. 2000-15,

2000-1 C.B. 447.

III. Rev. Proc. 2003-61, Sec. 4.01: Seven Threshold Conditions
for Relief

Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297, begins

with a list of seven threshold conditions that a taxpayer must

satisfy in order to qualify for equitable relief. The Court will
 - 7 -

not recite them all since the only factor at issue is the so-

called attribution factor. Rev. Proc. 2003-61, sec. 4.01(7),

2003-2 C.B. at 297, provides that the tax liability from which

the requesting spouse seeks relief must be attributable to the

nonrequesting spouse unless certain exceptions apply which are

not relevant here.

Petitioner contends that the claimed $30,001 of excess

withholdings is attributable to Mr. Skolnick because he

overstated their withheld amounts when he prepared and

electronically filed their Form 1040.

Respondent contends that petitioner’s request for relief

seems to be based on the assumption that the overstated

withholding credits are directly related to Mr. Skolnick’s stock

sale. According to respondent, Appeals determined that that was

not the case: the overstated withholdings could have been a math

error, a “typo when the electronic return was computed using

whatever computer software was used[,] * * * an inflated number

pulled out of the air,” or any one of a number of explanations.

The Appeals officer’s “Case Activity Record” states that the

understatement was “caused by reporting withholding in relation

to a 1099B. There was no withholding on the 1099B.” The record

further states: “She argues it was due to the 1099b. * * * [I

told her] it had not been filed. I stated that there is nothing

on the 1099b so that is just a guess.” The record also states
 - 8 -

that he explained that withholding is “normally considered a

joint and several liability because it normally cannot be

allocated.” The officer’s “workpapers” state that the item was

not attributable to either spouse because they had claimed too

much withholding. Further, her arguments that the item should be

attributed to Mr. Skolnick because he claimed the withholding in

relation to a Form 1099 were “without merit and it would be

inequitable to attribute the disallowed withholding to the NRS

based upon an assumption.”

The Court is not persuaded by respondent’s arguments. In

deciding the issue of to whom inaccurate, false, or “phony”

deductions or credits are attributable, the Court has attributed

such deductions or credits to the spouse who wrongfully reported

or claimed the item (with certain exceptions not applicable

here). See Lawson v. Commissioner, T.C. Memo. 1994-286 (spouse

who mischaracterized stock sale as an ordinary loss rather than a

capital loss was attributed the item); Gill v. Commissioner, T.C.

Memo. 1993-274 (phony Schedule A deductions were attributed to

spouse who prepared the return and claimed the items); Perry v.

Commissioner, T.C. Memo. 1992-258 (phony Schedule C deductions

were attributed to spouse who claimed the items); Davis v.

Commissioner, T.C. Memo. 1992-240 (phony Schedule A deduction was

attributed to spouse who claimed it), affd. without published

opinion 26 F.3d 130 (9th Cir. 1994); see also Belk v.
 - 9 -

Commissioner, 93 T.C. 434, 437 (1989) (clerical mistake, i.e.,

claiming a $15,000 deduction rather than a $1,500 loss, was

attributed to spouse who claimed the deduction).3

On the basis of the foregoing, the Court finds that the

overstated withholding credits are attributable to Mr. Skolnick--

he prepared the return and wrongfully reported the overstated

amounts.4 Therefore, the Court also finds that petitioner has

satisfied the seventh threshold condition of Rev. Proc. 2003-61,

sec. 4.01.

IV. Rev. Proc. 2003-61, Sec. 4.02: Circumstances Ordinarily
Allowing for Relief

Where the requesting spouse satisfies the threshold

conditions of Rev. Proc. 2003-61, sec. 4.01, then Rev. Proc.

2003-61, sec. 4.02, 2003-2 C.B. at 298, sets forth the

3
Although these cases arose under former sec. 6013(e), the
Court has determined that cases interpreting similar terms under
sec. 6013(e) remain instructive in its analysis. See Alt v.
Commissioner, 119 T.C. 306, 314 (2002), affd. 101 Fed. Appx. 34
(6th Cir. 2004); Juell v. Commissioner, T.C. Memo. 2007-219;
Becherer v. Commissioner, T.C. Memo. 2004-282. The terms
“attributable to an item of the individual with whom the
requesting spouse filed the joint return (‘the nonrequesting
spouse’)” of Rev. Proc. 2003-61, sec. 4.01(7), 2003-2 C.B. 296,
297, is similar to the terms “attributable to grossly erroneous
items of one spouse” of sec. 6013(e). The analysis for
attributing items to one spouse or the other is essentially the
same.
4
In addition, there is a strong implication that Mr.
Skolnick was the culpable person since he: (1) Accepted
responsibility for any additional liabilities in their property
settlement; and (2) has not contested petitioner’s assertions or
otherwise intervened in the matter, see supra note 2.
 - 10 -

circumstances in which the IRS will ordinarily grant relief under

section 6015(f) with respect to an underpayment of a properly

reported liability. To qualify for relief under Rev. Proc. 2003-

61, sec. 4.02, the requesting spouse must: (1) No longer be

married to, be legally separated from, or have not been a member

of the same household as the nonrequesting spouse at any time

during the 12-month period ending on the date of the request for

relief; (2) have had no knowledge or reason to know when she

signed the return that the nonrequesting spouse would not pay the

tax liability; and (3) suffer economic hardship if relief is not

granted.

Petitioner was not divorced or legally separated from Mr.

Skolnick when she requested relief. Additionally, petitioner and

Mr. Skolnick resided together within the 6-month period preceding

her request: she testified that he moved out in January 2005,

while her Form 8857 is dated June 11, 2005. Thus, she fails

requirement 1, and the Court need not discuss the others.

Accordingly, petitioner does not qualify for relief under Rev.

Proc. 2003-61, sec. 4.02.

V. Rev. Proc. 2003-61, Sec. 4.03: Other Factors

Where the requesting spouse fails to qualify for relief

under Rev. Proc. 2003-61, sec. 4.02, the IRS may nevertheless

grant relief under Rev. Proc. 2003-61, sec. 4.03, 2003-2 C.B. at

298. The Court’s analysis with respect to the nonexhaustive list
 - 11 -

of factors contained in Rev. Proc. 2003-61, sec. 4.03 is

described below.

A. Marital Status

The IRS will take into consideration whether the requesting

spouse is divorced or separated (whether legally separated or

living apart) from the nonrequesting spouse. Rev. Proc. 2003-61,

sec. 4.03(2)(a)(i), 2003-2 C.B. at 298.

Petitioner and Mr. Skolnick were separated, i.e., living

apart, when she requested relief. This factor weighs in favor of

relief. See id.; cf. Nihiser v. Commissioner, T.C. Memo.

2008-135 (living apart under Rev. Proc. 2000-15 weighs in favor

of relief); Beatty v. Commissioner, T.C. Memo. 2007-167

(remaining married or residing together is a neutral factor under

Rev. Proc. 2003-61); Butner v. Commissioner, T.C. Memo. 2007-136

(same under Rev. Proc. 2000-15).

B. Economic Hardship

The IRS will take into consideration whether the requesting

spouse will suffer economic hardship if relief is not granted.

Rev. Proc. 2003-61, sec. 4.03(2)(a)(ii), 2003-2 C.B. at 298.

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, supra.

In determining a reasonable amount for basic living

expenses, the Court considers, among other things: (1) The
 - 12 -

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. See sec. 301.6343-1(b)(4)(ii), Proced. & Admin. Regs.

The IRS has issued guidelines for allowable expenses.5

“Necessary expenses are those that meet the necessary expense

test; i.e., ‘they must provide for a taxpayer and his or her

family’s health and welfare and/or the production of income’ and

they must be reasonable.” Schulman v. Commissioner, T.C. Memo.

2002-129 n.6. There are three types of necessary expenses:

(1) Those based on national standards; i.e., food, housekeeping

supplies, clothing, and personal care products and services;

(2) those based on local standards; i.e., housing, utilities, and

transportation; and (3) other expenses, which are not based on

national or local standards. Id.

5
The guidelines are published on the IRS’s Web site at
http://www.irs.gov/individuals/article/0,,id=96543,00.html (last
visited May 30, 2008). The amount listed as the national or
local standard is effective as of Oct. 1, 2007.
 - 13 -

Petitioner testified that she estimated the expenses on her

Form 12510 for herself and her two children. With the exception

of the $1,435 for monthly rent, she has not substantiated her

expenses; i.e., by providing receipts or statements. Therefore,

the Court will use the national and local standards.

The monthly national standard allows a family of three:

Expenditure Amount

Food $626
Housekeeping supplies 61
Apparel & services 209
Personal care products & services 58
Miscellaneous 197
Out-of-pocket health care 171
Total 1,322

Petitioner is allowed $217 as operating costs for her

automobile (local standard). The Court has determined total

expenditures of $2,974, while she claimed net wages of $3,088.

Petitioner’s net wages exceed her expenditures by $114. Although

petitioner is supporting two children, she is gainfully employed

as a nurse--earning approximately $60,000 a year. In addition,

there is no information in the record as to the costs of her

children’s private school tuition or the value of any assets that

could be used to satisfy the liability (she testified that she

has since moved and is making payments on a home). The Court

also notes that petitioner may seek to enforce the terms of the

property settlement against Mr. Skolnick for the additional

penalties and interest. Consequently, the Court finds that
 - 14 -

petitioner has not shown that she will suffer economic hardship

if she is not relieved of the liability. See Monsour v.

Commissioner, T.C. Memo. 2004-190 (requesting spouse must prove

that the expenses qualify and that they are reasonable). This

factor weighs against granting relief. See Banderas v.

Commissioner, T.C. Memo. 2007-129 (lack of economic hardship

weighs against relief under Rev. Proc. 2003-61); cf. Butner v.

Commissioner, supra (same under Rev. Proc. 2000-15).

C. Knowledge or Reason To Know

The IRS will also consider whether the requesting spouse did

not know or had no reason to know that the nonrequesting spouse

would not pay the liability. Rev. Proc. 2003-61, sec.

4.03(2)(a)(iii)(A), 2003-2 C.B. at 298. As is relevant here, the

IRS will consider any deceit or evasiveness of the nonrequesting

spouse, the requesting spouse’s involvement in the household’s

finances, and any lavish or unusual expenditures compared with

past spending levels in determining whether the requesting spouse

had reason to know of the underpayment (the factors specified in

Price v. Commissioner, 887 F.2d 959, 965 (9th Cir. 1989)). Id.

sec. 4.03(2)(a)(iii)(C).

Typically, in the case of a reported but unpaid liability,

the relevant knowledge is whether the taxpayer knew or had reason

to know when the return was signed that the tax would not be

paid. See Washington v. Commissioner, 120 T.C. at 151; see also
 - 15 -

Feldman v. Commissioner, T.C. Memo. 2003-201, affd. 152 Fed.

Appx. 622 (9th Cir. 2005). The general rule for unpaid

liabilities is that the requesting spouse must establish that:

(1) When she signed the return, she had no knowledge or reason to

know that the tax reported on the return would not be paid; and

(2) it was reasonable for her to believe that the nonrequesting

spouse would pay the tax shown due. See Morello v. Commissioner,

T.C. Memo. 2004-181; Ogonoski v. Commissioner, T.C. Memo. 2004-

52; Collier v. Commissioner, T.C. Memo. 2002-144.

Petitioner testified that: (1) Mr. Skolnick prepared and

electronically filed the return; (2) she was not present when he

filed it; (3) she was able to review the return but only after he

filed it; and (4) she does not recall signing a signature page.6

The Appeals officer’s “Case Activity Record” states:

“Knowledge--The NRS e-filed the return. The RS did not review.”

His workpapers merely state that she did not review the return

6
Whether petitioner failed to sign the 2003 Form 1040
necessarily implicates issues regarding whether she filed a joint
return and whether she is entitled to relief under sec. 6015(f).
See sec. 1.6015-4(a), Income Tax Regs. (the filing of a joint
return is a prerequisite to sec. 6015 relief). The Court finds
that petitioner intended to and did file a joint return with Mr.
Skolnick because she has not otherwise renounced the 2003 Form
1040 and she provided her “W-2s” to Mr. Skolnick. See Heim v.
Commissioner, 27 T.C. 270, 273 (1956), affd. 251 F.2d 44 (8th
Cir. 1958); Gudenschwager v. Commissioner, T.C. Memo. 1989-6;
sec. 1.6013-1(a)(2), Income Tax Regs.; see also Ziegler v.
Commissioner, T.C. Memo. 2003-282 (the Court assumed that the
taxpayer conceded the filing of a joint return or ratified the
joint return that the nonrequesting spouse filed because she
continued to assert her entitlement to sec. 6015(f) relief).
 - 16 -

for accuracy, “she would also be charged with constructive

knowledge of the item”, and since the “withholding was reported

on the return, she has actual knowledge of the item.”

Petitioner and Mr. Skolnick’s Form 1040 showed an

overpayment for 2003 on account of overstated withholdings–-not

taxes due. Petitioner was not alerted to the fact that there was

a $31,165 “Proposed Balance Due” until she received the Notice

CP2000 in May 2005. Moreover, with respect to the Price factors,

petitioner’s involvement in their finances was insufficient to

put her in a position to have reason to know that the Form 1040

contained overstated withholdings when she signed it. There is

no evidence that their expenditures were unusual or extravagant

or that their overall standard of living significantly improved

during 2003 to put petitioner on notice that Mr. Skolnick

overstated their withholdings.

Arguably, weighing against petitioner is the officer’s

conclusion that “the 2003 refund was way out of line with prior

years. This should have triggered something.” Although the 2002

and 2003 returns are not in evidence, respondent represented that

$10,743.61 of the claimed $26,681 overpayment for 2003 was

applied to their joint liability for 2002.7

7
At trial respondent asserted that he did not include a copy
of the 2003 return because it was not part of the administrative
record, although he could have obtained one.
 - 17 -

Without the 2002 and 2003 returns, the Court is hesitant to

agree with the officer’s conclusion that the claimed $26,681

refund for 2003 “should have triggered something.” There is

nothing in the record establishing what that $10,743.61 liability

for 2002 consists of (i.e., a deficiency, interest, or

penalties). In addition, 2002 was the first year that the

Skolnicks had filed a joint return; thus, there was no real

filing history by which petitioner could have tested the 2003

refund for accuracy. The January 2006 property settlement

indicates they were going to claim a $2,047.03 overpayment for

2002 by January 31, 2006, which corroborates petitioner’s

testimony that she did not learn about the issues with the 2002

return until after the issues with the 2003 return had come to

light. On the basis of the evidence in the record, it does not

appear that “the 2003 refund was way out of line with prior

years” such that petitioner should have had reason to know that

Mr. Skolnick had overstated their withholdings for 2003.

On the basis of the foregoing, the Court finds that this

factor is neutral. See, e.g., Alpha Med., Inc. v. Commissioner,

172 F.3d 942 (6th Cir. 1999) (a factor favoring neither party is

neutral), revg. T.C. Memo. 1997-464.

D. Nonrequesting Spouse’s Legal Obligation

The IRS will also consider whether the nonrequesting spouse

has a legal obligation to pay the outstanding income tax
 - 18 -

liability pursuant to a divorce decree or agreement. See Rev.

Proc. 2003-61, sec. 4.03(2)(a)(iv), 2003-2 C.B. at 298. But if

the requesting spouse knew or had reason to know when the

agreement was entered into that the nonrequesting spouse would

not pay the liability, then this factor will not weigh in favor

of relief. Id.

The property settlement provides that Mr. Skolnick agreed to

pay any additional liabilities for 2003. There is nothing in the

record indicating that petitioner knew or should have known when

she entered into the agreement that Mr. Skolnick would not pay

the liability-–he paid his half of the $31,656 liability when

they entered into the agreement in January 2006, and respondent

did not determine the addition to tax until February 2006. This

factor weighs in favor of relief. See id.; see also Magee v.

Commissioner, T.C. Memo. 2005-263 (applying Rev. Proc. 2003-61);

cf. Billings v. Commissioner, T.C. Memo. 2007-234 (applying Rev.

Proc. 2000-15).

E. Significant Benefit

The IRS will consider whether the requesting spouse received

significant benefit beyond normal support as a result of the

unpaid tax liability. Rev. Proc. 2003-61, sec. 4.03(2)(a)(v),

2003-2 C.B. at 299.

On petitioner’s Form 12510, she claimed that she believed

that the refund was used to pay the Skolnicks’ household
 - 19 -

expenses. There is no evidence indicating that she received

significant benefit as a result of the unpaid tax liability.

Therefore, the Court concludes that this factor weighs in favor

of relief. See Magee v. Commissioner, T.C. Memo. 2007-136 (lack

of significant benefit weighs in favor of relief under Rev. Proc.

2003-61); cf. Butner v. Commissioner, supra (lack of significant

benefit weighed in favor of relief under former section 6013(e)

notwithstanding that Rev. Proc. 2000-15 stated that it was

neutral).

F. Compliance With Federal Tax Laws

The IRS will take into consideration whether the requesting

spouse has made a good faith effort to comply with the Federal

tax laws in the succeeding years. See Rev. Proc. 2003-61, sec.

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

This factor is neutral because no evidence or argument was

presented as to the issue. See Knorr v. Commissioner, T.C. Memo.

2004-212.

G. Abuse

The IRS will also consider whether the nonrequesting spouse

abused the requesting spouse. See Rev. Proc. 2003-61, sec.

4.03(2)(b)(i), 2003-2 C.B. at 299. The presence of abuse is a

factor favoring relief, and a history of abuse may mitigate the

requesting spouse’s knowledge or reason to know. Id.
 - 20 -

Petitioner testified that Mr. Skolnick was “not necessarily

physically abusive.” Therefore, this factor is neutral. Id.

(the presence of abuse weighs in favor of relief while lack of

abuse does not weigh against relief); see also Magee v.

Commissioner, supra (lack of abuse is a neutral factor under Rev.

Proc. 2003-61); cf. Butner v. Commissioner, supra (same under

Rev. Proc. 2000-15).

H. Mental or Physical Health

The IRS will take into consideration whether the requesting

spouse was in poor mental or physical health on the date she

signed the return or at the time relief was requested. See Rev.

Proc. 2003-61, sec. 4.03(2)(b)(ii), 2003-2 C.B. at 299.

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

or physical health was poor; therefore, this factor is neutral.

See id.; see also Magee v. Commissioner, supra.

I. Conclusion: Weight of the Factors

Petitioner has presented a strong case for relief from joint

and several liability. Three factors weigh in favor of relief,

one, economic hardship, weighs against relief, and four factors

are neutral. While the economic hardship factor weighs against

her, it does not outweigh the other factors. Accordingly,

petitioner is entitled to relief under section 6015(f).

VI. Petitioner’s Refund Claim

Petitioner has requested a refund of amounts paid towards

the 2003 tax liability.
 - 21 -

In pertinent part, section 6015(g)(1) provides that a refund

shall be allowed to the extent it is attributable to the

operation of section 6015 except to the extent that it may be

affected by other specified sections.

Rev. Proc. 2003-61, sec. 4.04(2), 2003-2 C.B. at 299,

provides that in a case involving an underpayment of income tax,

a requesting spouse is eligible for a refund of separate payments

made after July 22, 1998, if she establishes that she provided

the funds used to make the payment for which she seeks a refund.

But a requesting spouse is not eligible for refunds of payments

made with the joint return, joint payments, or payments that the

nonrequesting spouse made. Id.

Respondent has represented that petitioner and Mr.

Skolnick’s 2003 return was timely filed; the filing date is

deemed to be April 15, 2004. See sec. 6513(a). On April 15,

2004, petitioner paid $3,795 in the form of withholdings. See

sec. 6513(b)(1) (certain withheld amounts are paid on the 15th

day of the 4th month following the close of the taxable year).

Her withholdings constitute a payment made with the joint return;

consequently, she is not eligible for a refund with respect to

that payment. See Rev. Proc. 2003-61, sec. 4.04(2); cf.

Rosenthal v. Commissioner, T.C. Memo. 2004-89. In January 2006

Mr. Skolnick submitted a $31,656 payment, of which petitioner

paid half.8 The January 2006 payment encompasses a $31,656 joint

8
Petitioner’s Form 8857, received by the IRS on June 20,
(continued...)
 - 22 -

payment and in part a payment made by a nonrequesting spouse.

Consequently, petitioner is not eligible for a refund with

respect to the January 2006 payment. See Rev. Proc. 2003-61,

sec. 4.04(2); cf. Rosenthal v. Commissioner, supra.

In conclusion, the Court holds that petitioner is entitled

to relief from joint and several liability under section 6015(f)

with respect to the unpaid addition to tax under section

6651(a)(2) and interest for 2003. But petitioner is not entitled

to any refund for 2003.

To reflect the foregoing,

An appropriate decision will

be entered.

8
(...continued)
2005, is a claim for a refund. See Washington v. Commissioner,
120 T.C. 137, 161-162 (2003). Her petition, filed on July 3,
2006, also includes a refund claim. Petitioner’s refund claims
are timely with respect to both payments. See sec. 6511(a) (a
claim for credit or refund of an overpayment of any tax shall be
filed by the taxpayer within: (1) 3 years from the time the
return was filed, or (2) 2 years from the time the tax was paid,
whichever period expires later).