T.C. Summary Opinion 2008-76



                     UNITED STATES TAX COURT



               ROSALYN MAPP FRETTY, Petitioner AND
                   RANDOLPH MAPP, Intervenor v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7335-05S.              Filed June 30, 2008.



     Rosalyn Mapp Fretty, pro se.

     Randolph Mapp, pro se.

     James H. Brunson, III, for respondent.



     ARMEN, Special Trial Judge:1   This case was heard pursuant

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



     1
        This case was submitted to Special Trial Judge Carleton
D. Powell, who died on Aug. 23, 2007, after the trial. By order
dated Mar. 11, 2008, Chief Judge Colvin reassigned this case to
Special Trial Judge Robert N. Armen, Jr. without objection of the
parties.
                               - 2 -

effect when the petition was filed.2     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.

     The issues for decision are whether petitioner is entitled

to relief from joint and several liability pursuant to section

6015(c) or section 6015(f) for the taxable years 2000 and 2002.

                            Background

     Some of the facts have been stipulated, and they are so

found.   We incorporate by reference the parties’ stipulations of

facts and the accompanying exhibits.

     At the time the petition was filed, Rosalyn Mapp Fretty

(petitioner) resided in Georgia.

     Petitioner married Randolph Mapp, intervenor (Mr. Mapp), in

1980 and divorced him in 2003 because of his issues with

“drinking and women”.3   Petitioner is employed as a registered

nurse and has taxes regularly withheld from her wages.     Mr. Mapp

is a self-employed truck driver and reports his income and




     2
        Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code of 1986 as amended,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
     3
        We find it worth noting that Mr. Mapp almost missed
appearing at trial because he was so tardy. He is behind on both
his alimony payments to petitioner and payments to the IRS.
                                - 3 -

expenses on Schedule C, Profit or Loss From Business.    He is also

a Pentecostal minister.

     During the taxable years 2000 and 2002, petitioner and Mr.

Mapp were still married, and they filed the joint Federal income

tax returns from which petitioner now seeks to be relieved of

joint and several liability.

     Although petitioner knew that Mr. Mapp generally earned

approximately $100,000 per year before expenses, she never saw

paychecks, check stubs, expense logs, or any paperwork related to

Mr. Mapp’s trucking business.   Petitioner signed both years’

returns believing Mr. Mapp would pay any amounts due.    She did

not carefully examine the returns she signed, trusting

(erroneously, in retrospect) that her husband was handling their

financial affairs properly.

Taxable Year 2000

     It is clear from the record that the deficiency for the

taxable year 2000 stemmed from Mr. Mapp’s failure to report the

income shown on a particular Form 1099-MISC, Miscellaneous Income

(Form 1099).

     In 2000, Mr. Mapp did work for two trucking companies with

similar names:   Cornerstone Transportation, Atlanta and

Cornerstone Transportation, South Carolina.   Each corporate

entity issued him a separate Form 1099.   When a representative of

H&R Block prepared the couple’s tax return, she neglected to
                               - 4 -

include the income shown on the second Cornerstone Transportation

Form 1099, believing it to be a duplicate.   Mr. Mapp, whose

exclusive dealings with the tax preparer did not include

petitioner, did not correct the error in the hope that it would

go unnoticed, and did not advise petitioner of the error.

     Although petitioner signed the 2000 joint return, she did

not examine it closely, and she was not aware of the omission.

     A notice of deficiency was issued when the IRS discovered

the error.

Taxable Year 2002

     After withholdings of $5,200 from petitioner’s wages,

petitioner and Mr. Mapp reported a balance due of $3,490 for the

taxable year 2002.   The balance due was attributable to Mr.

Mapp’s failure to make sufficient estimated tax payments in

respect of his income.   They did not submit payment with the

return.   No notice of deficiency was issued for 2002.

     Mr. Mapp promised petitioner that he would pay any tax due

for both years because the amounts due essentially resulted from

his business activities.   Further, Mr. Mapp was expressly

required to pay the outstanding tax liabilities pursuant to the

couple’s marital settlement agreement.   Later, however, Mr. Mapp

decided he no longer wished to be responsible for those debts,

stopped making payments on the installment agreement previously

negotiated with the IRS, and moved out of state.
                               - 5 -

     Petitioner filed a Form 8857, Request for Innocent Spouse

Relief, in the fall of 2003.   Respondent denied the request and

issued petitioner a notice of determination denying her relief

for both the 2000 and 2002 taxable years.

     Petitioner filed her petition with this Court, seeking

relief under section 6015(c) or section 6015(f).     Mr. Mapp

exercised his right to intervene pursuant to Rule 325(b).

                             Discussion

Section 6015 Relief

     Generally, married taxpayers may elect to file a Federal

income tax return jointly.   Sec. 6013(a).    Each spouse filing a

joint return is jointly and severally liable for the accuracy of

the return and the entire tax due.     Sec. 6013(d)(3).   Under

certain circumstances, however, section 6015 provides relief from

joint liability.   Section 6015 applies to any liability for tax

arising after July 22, 1998, and to any liability for tax arising

on or before July 22, 1998, remaining unpaid as of such date.

Internal Revenue Service Restructuring and Reform Act of 1998,

Pub. L. 105-206, sec. 3201(g), 112 Stat. 740.

     In general terms, there are three avenues of relief under

section 6015:   (1) Section 6015(b) provides relief with respect

to certain erroneous items on the return; (2) section 6015(c)

provides for a separation of liability for divorced or separated

taxpayers; and (3) section 6015(f) more broadly confers on the
                               - 6 -

Secretary discretion to grant equitable relief for taxpayers who

otherwise do not qualify for relief under either subsection (b)

or (c).   A prerequisite for relief under section 6015(b) or (c)

is the existence of an “understatement of tax” or a tax

deficiency.   Sec. 6015(b)(1)(B), (c)(1); Block v. Commissioner,

, 65-66 (2003).   Except as otherwise provided in

section 6015, the requesting spouse bears the burden of proof.

See, e.g., sec. 6015(b)(2); see also Rule 142(a).

     Section 6015(b)

     Under section 6015(b), the Court may grant a taxpayer full

or apportioned relief from joint and several liability for an

understatement of tax on a joint return if, among other

requirements, the taxpayer establishes that she “did not know,

and had no reason to know” that the other spouse understated that

spouse’s tax liability on the return.   Sec. 6015(b)(1)(C), (2).

As petitioner requests consideration only under 6015(c) and

6015(f), we will limit our analysis to those subsections.

     Section 6015(c)

     Relief is not available to petitioner for the 2002 taxable

year under section 6015(c) as there was no understatement of tax

for that year.   However, there was a tax deficiency for the 2000

taxable year, and we hold that relief is appropriate for that

year.
                               - 7 -

     An election under section 6015(c) treats the former spouses

as if they had filed separate returns, and each spouse’s

liability is limited to that portion of the deficiency properly

allocable to the electing spouse.   See sec. 6015(c)(1), (d)(3);

see also Rowe v. Commissioner, T.C. Memo. 2001-325.   Petitioner,

with the help of Mr. Mapp’s testimony, convinced us that the

entire deficiency for 2000 was allocable to Mr. Mapp, and not to

petitioner.   See sec. 6015(c); sec. 1.6015-3(d)(3), Income Tax

Regs. (stating that the electing spouse has the burden to

establish the proper allocation and that none of the applicable

limitations apply).

     Under section 6015(c), a requesting spouse may elect to

allocate a deficiency if the following four conditions are met:

(1) A joint return was filed; (2) at the time of the election,

the requesting spouse is no longer married to the nonrequesting

spouse;4 (3) the requesting spouse elects the application of

section 6015(c) no later than 2 years after the date on which

collection activities have begun; and (4) the deficiency remains

unpaid.   Petitioner meets all of these conditions.

     Relief under section 6015(c) is not permitted if the

Secretary is able to demonstrate that the requesting spouse had

     4
        This condition is also satisfied if the couple is legally
separated or the requesting spouse and the nonrequesting spouse
have not been members of the same household at any time during
the 12-month period ending on the date the election was filed.
See sec. 6015(c)(3)(A)(i).
                               - 8 -

actual knowledge of “any item giving rise to a deficiency” which

is not allocable to the requesting spouse.    Sec. 6015(c)(3)(C).

In other words, it is respondent’s burden in this case to

establish that petitioner had actual knowledge of the error on

the 2000 tax return.   Both petitioner and Mr. Mapp credibly

testified that petitioner had no knowledge of the error.

     Respondent emphasized at trial that petitioner should have

known that something was amiss when an amount less than Mr.

Mapp’s normal income was reported and that because she should

have known, she actually did know.     Whether she should have known

about the omitted income is a question irrelevant to our

analysis, and we remain unconvinced that petitioner actually knew

of the error.

     We hold that petitioner is entitled to relief for the 2000

taxable year under section 6015(c).

     Section 6015(f)

     A taxpayer is entitled to relief from joint and several

liability under section 6015(f) only if “relief is not available

to such individual under subsection (b) or (c)”.    Sec. 6015(f).

Because relief under section 6015(b) or (c) is not authorized for

an underpayment of tax, petitioner is not eligible for relief

under either 6015(b) or 6015(c) for 2002.    The Court reviews the

Commissioner’s denial of section 6015(f) relief under an abuse of
                                   - 9 -

discretion standard.       Butler v. Commissioner, 

,

287-292 (2000).

       Section 6015(f)(1) provides that a taxpayer may be relieved

from joint and several liability if it is determined, after

considering all the facts and circumstances, that it is

inequitable to hold the taxpayer liable for the unpaid tax or

deficiency.

       Rev. Proc. 2003-61,5 sec. 4.01, 2003-2 C.B. 296, 297, sets

forth seven threshold conditions that the requesting spouse must

satisfy before the Commissioner will consider a request for

relief under section 6015(f).       Petitioner has satisfied those

threshold conditions, and respondent does not seriously contend

otherwise.

       Where the requesting spouse satisfies the threshold

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

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

which the Secretary will ordinarily grant relief under section

6015(f) with respect to the underpayment of a properly reported

liability.       See Rev. Proc. 2003-61, sec. 4.02(1), 2003-2 C.B. at

298.       Because the record does not clearly demonstrate that

petitioner would suffer financial hardship if equitable relief

were not granted, see Rev. Proc. 2003-61, sec. 4.02(1)(c), we

       5
        Rev. Proc. 2003-61, 2003-2 C.B. 296, supersedes Rev.
Proc. 2000-15, 2000-1 C.B. 447, and is effective as to requests
for relief filed on or after Nov. 1, 2003.
                              - 10 -

continue our analysis under the framework set out in Rev. Proc.

2003-61, sec. 4.03, 2003-2 C.B. at 298-299.

     Rev. Proc. 2003-61, sec. 4.03, lists several factors to be

evaluated for requests for relief under section 6015 for spouses

who filed a joint return (and have met the threshold conditions

for relief under section 6015(f)) but do not qualify for relief

under Rev. Proc. 2003-61, sec. 4.02.     The nonexclusive list of

factors to be considered includes:     (1) Marital status; (2)

economic hardship; (3) no knowledge or reason to know of the item

giving rise to the deficiency; (4) whether the nonrequesting

spouse had a legal obligation to pay the liability; (5) whether

the requesting spouse benefited significantly from the item

giving rise to the deficiency; and (6) whether the requesting

spouse has made a good faith attempt to comply with the tax laws

in subsequent years.

single factor will

be determinative of whether equitable relief will be granted in

any particular case.

all relevant

factors should be considered, even if not listed in the Revenue

Procedure.   See

analyze in depth all of the factors enumerated but

rather touch on some of the more important ones that inform our

decision.

     Petitioner is divorced from Mr. Mapp, and she has made a

good faith attempt to comply with the tax laws.     See

-

4.03(2)(a)(i), (vi).    Mr. Mapp had a legal obligation to pay the

outstanding tax liability pursuant to their marital settlement

agreement.    See

we are

convinced that petitioner did not know, and had no reason to

know, at the time she signed the return for 2002 that Mr. Mapp

would not pay the tax liability as he had promised.      See

reviewing all of the facts and circumstances in this

case, we decide that respondent abused his discretion in denying

petitioner’s request for equitable relief for 2002.

Conclusion

     On the basis of petitioner’s credible testimony, supported

by Mr. Mapp, as well as the entire record, we hold that

petitioner is entitled to relief from joint and several liability

for 2000 under section 6015(c) and for 2002 under section

6015(f).     Accordingly,


                                             Decision will be entered

                                     for petitioner.