T.C. Summary Opinion 2010-31
UNITED STATES TAX COURT
JOE STEWART, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 21262-07S. Filed March 16, 2010.
Joe Stewart, pro se.
G. Chad Barton, for respondent.
THORNTON, Judge: This case was heard pursuant to the
provisions of section 7463 of the Internal Revenue Code in effect
at the time 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, all section references are to
the Internal Revenue Code.
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The issue for decision is whether for 2004 petitioner is
entitled to relief from joint and several liability under section
6015.
Background
The parties have stipulated some facts, which we incorporate
by this reference. When he petitioned the Court, petitioner
resided in Arkansas.
During 2004 petitioner resided with his then wife, Edith
Stewart (Ms. Stewart). That summer, after discussing the matter
with petitioner, Ms. Stewart went to work full time for a medical
clinic in a town about 2 hours from their home. Her weekly
routine was to leave home on Sunday evening or Monday morning,
stay in the town where she worked during the week, and return
home on Friday afternoon. In December 2004 she stopped working
for the clinic.
The clinic paid Ms. Stewart $20 per hour plus expenses.
During 2004 her compensation totaled $19,500.
On their 2004 joint Federal income tax return petitioner and
Ms. Stewart failed to report this $19,500 of compensation. By
notice of deficiency respondent determined that this omission
gave rise to a $5,762 deficiency and a $1,152 accuracy-related
penalty under section 6662. No Tax Court petition was filed in
response to the notice of deficiency.
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After respondent had assessed these liabilities, petitioner
submitted to respondent Form 8857, Request for Innocent Spouse
Relief. In a cover letter, petitioner’s representative asserted
that petitioner was unaware of the tax understatement when he
signed the 2004 joint return and that he received no direct
benefit from the unreported income.
Respondent’s agents requested information from petitioner
with respect to his request for relief, but petitioner failed to
respond. Respondent’s agents also requested information from Ms.
Stewart, who responded in a questionnaire, under penalties of
perjury, that petitioner was aware of the income she had earned
at the medical clinic in 2004 and that he had used the unreported
income to pay their joint living expenses and to purchase tools
for personal use. She indicated on the questionnaire that
neither she nor petitioner had reviewed their 2004 joint return
before signing it.
In his final determination respondent denied petitioner’s
request for innocent spouse relief on the ground that “You did
not respond to our request for additional information.”
Discussion
Generally, married taxpayers may elect to file a joint
Federal income tax return. Sec. 6013(a). After making the
election, each spouse is jointly and severally liable for the
entire tax due on their aggregate income. Sec. 6013(d)(3). An
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individual may seek relief from joint and several liability under
section 6015, which offers three avenues of possible relief under
subsections (b), (c), and (f). In general, section 6015(b)
provides full or apportioned relief from joint and several
liability; section 6015(c) provides proportionate tax relief to
divorced or separated taxpayers; and in certain circumstances
section 6015(f) provides equitable relief if relief is not
available under section 6015(b) or (c). If the Commissioner
denies a taxpayer’s request for relief under section 6015, the
taxpayer may petition this Court to review the determination.
Sec. 6015(e)(1)(A).
In support of his requested relief petitioner asserts that
Ms. Stewart took care of all family finances, that he had no
control over her actions, and that he was unaware of any “wrong
doing”. Petitioner has stipulated, however, that he knew that
Ms. Stewart worked full time at the clinic, earning $20 an hour.
We conclude that when he signed the 2004 joint return, petitioner
had actual knowledge of the income that gave rise to the
deficiency. Consequently, he is not entitled to relief under
section 6015(b) or (c). See sec. 6015(b)(1)(C), (c)(3)(C).
A taxpayer who does not qualify for relief under section
6015(b) or (c) can be relieved from joint and several liability
pursuant to section 6015(f) if, taking into account all the facts
and circumstances, it would be inequitable to hold the taxpayer
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liable for any unpaid tax or deficiency. In determining the
appropriate relief available under section 6015(f), we apply a de
novo scope and standard of review. See Porter v. Commissioner,
132 T.C. (2009).
Rev. Proc. 2003-61, 2003-2 C.B. 296, prescribes guidelines
for determining whether an individual qualifies for relief under
section 6015(f). Under these guidelines, petitioner’s knowledge
of the income giving rise to the deficiency weighs strongly
against granting relief. See Rev. Proc. 2003-61, sec.
4.03(2)(a)(iii)(B), 2003-2 C.B. at 298. The record fails to
establish counterbalancing factors that are “particularly
compelling.” Id. In fact, petitioner has offered little more
information in this proceeding to support his request for relief
than he offered in the administrative proceeding, in which he
failed to respond to requests for additional information. It is
unclear from the record whether petitioner might have received
significant benefit from the unreported income beyond normal
support. The record does not suggest, however, that petitioner
was subject to abuse, that he will suffer economic hardship if
relief is denied, or that Ms. Stewart has a legal obligation to
pay the outstanding income tax liability pursuant to a divorce
decree or agreement. See Rev. Proc. 2003-61, sec.
4.03(2)(a)(ii), (iv), (v), (b)(i), 2003-2 C.B. at 298-299. In
the final analysis, petitioner’s plea for relief appears to rest
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largely on an assertion that he relied upon his ex-wife to make
sure that her income was properly reported on their joint return.
Such an assertion, even if true, is inadequate to establish his
entitlement to relief from joint and several liability,
particularly in the light of his knowledge of the income giving
rise to the deficiency.
We sustain respondent’s determination that petitioner is not
entitled to relief pursuant to section 6015.
To reflect the foregoing,
Decision will be entered
for respondent.