T.C. Summary Opinion 2010-85
UNITED STATES TAX COURT
THOMAS E. DYKES AND SALLY A. DYKES JASKE, Petitioners
v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9866-09S. Filed June 29, 2010.
Mary M. Gillum, for petitioner Thomas E. Dykes.
Sally A. Dykes Jaske, pro se.
Caroline R. Krivacka, for respondent.
RUWE, Judge: This case was heard pursuant to the provisions
of section 74631 of the Internal Revenue Code in effect when the
petition was filed. Pursuant to section 7463(b), the decision to
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.
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be entered is not reviewable by any other court, and this opinion
shall not be treated as precedent for any other case.
Respondent determined a $852 deficiency in petitioners’ 2006
Federal income tax on the basis of the omission of $6,807 of
retirement income. Petitioners now agree that the $6,807 of
retirement income is subject to tax, and respondent agrees that
petitioners are entitled to a $40 telephone excise tax credit.
Therefore, the only issue remaining is whether Sally A. Dykes
Jaske (petitioner) is entitled to relief from joint liability
under section 6015.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by reference.
At the time the petition was filed, petitioners resided in
Tennessee.
Thomas E. Dykes (Mr. Dykes) received $6,807 of disability
pension income in 2006 from the National Electrical Benefit Fund.
Petitioner was aware that Mr. Dykes received the pension income
in 2006. Petitioner prepared petitioners’ joint 2006 Federal
income tax return. Petitioner reflected the pension income on
the timely filed tax return but did not include it as taxable
income.
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Petitioners were divorced in 2007, and petitioner has since
remarried. On April 24, 2009, respondent received from
petitioner a Form 8857, Request for Innocent Spouse Relief.
Petitioner asserts that when Mr. Dykes began to receive the
disability pension, she had been advised by a certified public
accountant that the payments were not taxable. Petitioner also
states that she cannot afford to pay Mr. Dykes’ bills. On the
Form 8857 petitioner lists $2,695 of monthly income and $2,629.70
of monthly expenses.
Petitioner’s adjusted gross income in 2009 was reported on
her 2009 Federal income tax return in the amount of $34,793,
which is $2,899.40 of monthly income.
Discussion
Section 6015 provides three types of relief from joint
liability. Subsection (b) provides a form of relief available to
joint filers. In order to qualify under subsection (b),
petitioner must not have known or had reason to know at the time
the return was signed that there was an understatement.
Petitioner was aware of the pension income paid to Mr. Dykes.
Knowledge of the omitted income is sufficient to disqualify her.
This Court has stated that where the spouse claiming relief under
section 6015(b) or (c) had actual knowledge of the transaction
giving rise to omitted income, relief was not available. King v.
Commissioner, 116 T.C. 198, 203 (2001); Cheshire v. Commissioner,
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115 T.C. 183, 192-193 (2000), affd. 282 F.3d 326 (5th Cir.
2002)). Therefore, petitioner had reason to know of the
understatement, and relief is not available under section
6015(b).
Subsection (c) provides for relief from liability for a
deficiency when a joint return was filed and the taxpayers are no
longer married, are legally separated, or lived apart (i.e., were
not members of the same household). Sec. 6015(c)(3)(A)(i). A
taxpayer is not eligible for relief under subsection (c) if the
Commissioner demonstrates that the taxpayer had actual knowledge
of the items giving rise to the deficiency. Sec. 6015(c)(3)(C).
It is clear that petitioner had actual knowledge of the
omitted income. Petitioner’s belief that the income was not
subject to tax does not affect her actual knowledge that the
income was received. Accordingly, petitioner is not eligible for
relief under section 6015(c).
In cases where relief is unavailable under section 6015(b)
and (c), section 6015(f) gives the Commissioner authority to
grant equitable relief on the basis of all the facts and
circumstances. Rev. Proc. 2003-61, 2003-2 C.B. 296. The factors
set forth in Rev. Proc. 2003-61, supra, include, inter alia,
whether the nonrequesting spouse abused the requesting spouse,
whether the nonrequesting spouse has a legal obligation to pay
the outstanding income tax liability under a divorce decree or
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agreement, whether there was significant benefit to the
requesting spouse, and whether the requesting spouse would suffer
economic hardship if relief were not granted. Id. sec. 4.03,
2003-2 C.B. at 298-299.
There are no allegations of spousal abuse and no provision
for the payment of any tax liabilities in the divorce decree.
Although there has been no significant benefit to petitioner,
both she and Mr. Dykes received the benefit of not paying tax on
the pension income. On the basis of the facts herein, the only
potential basis for providing equitable relief under section
6015(f) is financial hardship. At trial petitioner’s testimony
was short and petitioner simply stated that she could not pay the
tax. Considering the tax amounts involved, and the information
in the record, we find her conclusory statement unconvincing.
Petitioner has not established that she is entitled to equitable
relief under section 6015(f).
To reflect the foregoing,
Decision will be entered
under Rule 155.