WELLS, Judge: The instant case was heard pursuant to the provisions of section 7463 ¹ 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. In a stand-alone ² petition filed pursuant to section 6015(e), petitioner seeks review of respondent's notice of determination denying her relief from joint and several liability for taxable years 1998, 1999, and 2000.

The issues we must decide 2008 Tax Ct. Summary LEXIS 101">*102 are whether: (1) For the portion of the deficiency relating to certain rental property adjustments for petitioner's 1998 taxable year, ³ petitioner is entitled to relief pursuant to section 6015(b) or (c); (2) for petitioner's 1999 and 2000 taxable years, petitioner is entitled to relief pursuant to section 6015(b) or (c); and (3) for taxable years 1998, 1999, and 2000, respondent abused his discretion in denying relief to petitioner under section 6015(f).

Some of the facts and certain exhibits have been stipulated. The parties' stipulations of fact are incorporated in this Summary Opinion by reference and are found as facts in the instant 2008 Tax Ct. Summary LEXIS 101">*103 case.

At the time of filing the petition, petitioner resided in Mississippi.

Petitioner and her ex-husband (Mr. Courtney) were married for 14 years. They have three children. Their divorce was finalized on August 21, 2001. Petitioner and Mr. Courtney filed joint Forms 1040, U.S. Individual Income Tax Return, for taxable years 1998, 1999, and 2000. Petitioner signed a waiver permitting the assessment of the deficiency for 1998 and signed each joint return for 1998, 1999, and 2000. The unpaid balances with respect to their 1998, 1999 and 2000 income taxes were $ 7,501.51, $ 19,381.61 and $ 9,088.69, respectively.

During the years in issue petitioner occasionally worked part time at her children's school. Petitioner attends school full time at William Carey College. Petitioner managed the household accounts, and Mr. Courtney handled the family's taxes.

Mr. Courtney worked for Mitchell Sign Co. In part, Mitchell Sign Co. compensated Mr. Courtney with company stock. On May 8, 2001, Mr. Courtney's stock in Mitchell Sign Co. was liquidated for $ 40,955.79. Subsequently, Mr. Courtney wrote a check for $ 39,489.41 to pay off a loan.

After being arrested for forging prescriptions for painkillers 2008 Tax Ct. Summary LEXIS 101">*104 during September 2000, Mr. Courtney admitted to petitioner that he was addicted to prescription painkillers. Petitioner and Mr. Courtney divorced in August 2001. At the time of their divorce petitioner was aware that Mr. Courtney was recovering from his addiction and had not begun rehabilitation and thought him to be in an impaired state of mind.

In the divorce decree Mr. Courtney was obligated by their child custody and property settlement agreement to indemnify petitioner for joint and several liabilities at issue. During December 2003 petitioner received a notice from her bank that respondent had frozen her checking account because of the joint and several liabilities of which she seeks to be relieved in the instant proceeding.

Petitioner informed the Internal Revenue Service (IRS) Appeals officer that she did not think that Mr. Courtney would pay the joint and several liabilities in issue. Mr. Courtney neither coerced petitioner to sign the returns in issue nor forged petitioner's signatures to the returns; petitioner voluntarily signed the returns.

During 1998 petitioner and Mr. Courtney jointly rented the residence that had previously served as their home (rental property). Petitioner 2008 Tax Ct. Summary LEXIS 101">*105 and Mr. Courtney made repairs to the rental property. During an examination of petitioner and Mr. Courtney's 1998 joint return, adjustments were made with respect to the tax treatment of their rental property. Petitioner collected the rent checks from the tenants of the rental property and deposited them into petitioner and Mr. Courtney's joint bank account. No records were maintained for the rental property during 1998.

During 1998 petitioner and Mr. Courtney leased a residence which had been the couple's home and which they jointly owned. Currently, petitioner owns a home that is unencumbered by a mortgage and was appraised at approximately $ 185,000.

At the present time petitioner is not employed and uses funds from a student loan, child support payments, and a home equity loan to pay her bills.

On July 7, 2003, petitioner filed a timely Form 8857, Request for Innocent Spouse Relief, for the years in issue (request). Respondent denied her request.

On April 20, 2004, petitioner sent respondent Form 12509, Statement of Disagreement, in which she included the following as reasons for her appeal: Petitioner was unaware of Mr. Courtney's prescription painkiller addiction until the time of 2008 Tax Ct. Summary LEXIS 101">*106 his arrest; during this time, Mr. Courtney informed petitioner that his company's accounting firm would handle their taxes, but, instead, Mr. Courtney prepared them himself; and petitioner's impression was that Mr. Courtney was not in a proper state of mind to prepare their tax returns. Mr. Courtney prepared the 1998 joint return, and an accounting firm prepared the 1999 and 2000 joint returns.

On November 18, 2004, respondent sent petitioner a notice of determination denying her request. On February 17, 2005, petitioner filed a petition seeking review of respondent's determination.

Generally, spouses filing a joint return are jointly and severally liable for the accuracy of the return and for the full tax liability. Sec. 6013(d)(3). Section 6015(b), (c), and (f) provides exceptions to the general rule under certain circumstances. Section 6015 applies to liabilities arising after July 22, 1998, and to liabilities arising on or before July 22, 1998, that remain unpaid as of that date. See Internal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206, sec. 3201, 112 Stat. 734.

Except as otherwise provided in section 6015, the requesting spouse bears the burden 2008 Tax Ct. Summary LEXIS 101">*107 of proof. Rule 142(a); Alt v. Commissioner, 119 T.C. 306">119 T.C. 306, 119 T.C. 306">311 (2002), affd. 101 Fed. Appx. 34">101 Fed. Appx. 34 (6th Cir. 2004).

Respondent contends that petitioner is not entitled to relief under section 6015(b) or (c) for the portion of the 1998 deficiency remaining ⁴ because she had knowledge of the items giving rise to the understatement of tax.

As to section 6015(b), subsection (b)(1) requires the Commissioner to grant relief from joint liability if, inter alia, the requesting spouse establishes that, in signing the joint return, he or she did not know and had no reason to know that there was an understatement. Sec. 6015(b)(1)(C).

As to section 6015(c), subsection (c)(1) allows proportionate relief from joint and several liability by relieving the requesting spouse from liability for items giving rise to the deficiency that would have been allocable to the nonrequesting spouse had the spouses filed separate returns. Relief is not available 2008 Tax Ct. Summary LEXIS 101">*108 if the Commissioner demonstrates that the requesting spouse had actual knowledge, at the time the return was signed, of any item giving rise to a deficiency (or portion thereof). Sec. 6015(c)(3)(C).

In the instant case, the record shows that petitioner participated in the management of the rental property and collected rent checks and deposited them into her and Mr. Courtney's bank account. On the basis of the record in the instant case, we conclude that petitioner had actual knowledge of the item giving rise to the understatement of tax related to the rental property adjustments when she signed the 1998 return. Consequently, we hold that petitioner fails to satisfy the requirements of section 6015(b)(1)(C) for the portion of the deficiency relating to the rental property adjustments for taxable year 1998. Likewise, as to section 6015(c), we hold that petitioner is not entitled to relief on the portion of the deficiency relating to the rental property adjustments for taxable year 1998. See sec. 6015(c)(3)(C).

Subsections (b) and (c) of section 6015 do not apply to taxable year 1999 or 2000 because there was neither an understatement 2008 Tax Ct. Summary LEXIS 101">*109 nor a deficiency in either taxable year as defined by section 6015(b) and (c). The liabilities for taxable years 1999 and 2000 arose from unpaid taxes shown on the joint returns ⁵ for those years and assessed by respondent.

If relief is not available under section 6015(b) or (c), the requesting spouse may seek equitable relief under section 6015(f). Sec. 6015(f)(2); Butler v. Commissioner, 114 T.C. 276">114 T.C. 276, 114 T.C. 276">287-292 (2000).

Pursuant to the discretionary authority granted in section 6015(f), the Commissioner has prescribed procedures, set forth in Rev. Proc. 2003-61, 2003-2 C.B. 296, for determining whether a spouse qualifies for equitable relief for joint 2008 Tax Ct. Summary LEXIS 101">*110 and several liability. In order to qualify for relief under section 6015(f), the requesting spouse must satisfy certain threshold conditions listed in Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297. Petitioner satisfies those threshold conditions. ⁶

Rev. Proc. 2003-61, sec. 4.02, 2003-2 C.B. at 298, additionally provides that equitable relief will ordinarily be granted as to unpaid liabilities if each of three elements is satisfied. Those elements relate to: (1) Marital status, (2) knowledge or reason to know, and (3) economic hardship.

Because petitioner and Mr. Courtney were divorced at the time petitioner filed her request for relief, she meets the marital status criterion of Rev. Proc. 2003-61, sec. 4.02. Respondent contends that petitioner does not qualify for relief pursuant to the knowledge or reason to know and economic hardship criteria of Rev. Proc. 2003-61, 2008 Tax Ct. Summary LEXIS 101">*111 sec. 4.02, for the following reasons: (1) At the time she signed the returns, petitioner knew or had reason to know that the taxes would not be paid, and (2) petitioner will not suffer economic hardship if relief is not granted.

We agree with respondent that petitioner knew or had reason to know when she signed the returns that the taxes would not be paid. Petitioner's signatures on the returns constitute constructive knowledge of the amounts shown on the returns as due. See Park v. Commissioner, 25 F.3d 1289">25 F.3d 1289, 25 F.3d 1289">1299 (5th Cir. 1994), affg. T.C. Memo. 1993-252; see also Hayman v. Commissioner, 992 F.2d 1256">992 F.2d 1256, 992 F.2d 1256">1262 (2d Cir. 1993), affg. T.C. Memo. 1992-228. Moreover, petitioner was aware of the reported tax liabilities when she signed the returns. As noted above, at trial petitioner admitted that at the time she signed the returns, she had reason to know that the tax liabilities would not be paid. Accordingly we hold that petitioner knew or should have known that the tax returns for 1998, 1999, and 2000 reported unpaid liabilities and that Mr. Courtney would not pay those liabilities.

We also agree with respondent that petitioner will not suffer economic hardship if relief is not granted. 2008 Tax Ct. Summary LEXIS 101">*112 The Commissioner is directed to base his determination of whether a requesting spouse will suffer economic hardship on rules similar to those provided in section 301.6343-1(b)(4), Proced. & Admin. Regs. That regulation provides the following:

(4) Economic hardship. -- (i) General rule. -- * * * This condition applies if satisfaction * * * will cause an individual taxpayer to be unable to pay his or her reasonable basic living expenses. The determination of a reasonable amount for basic living expenses will be made by the director and will vary according to the unique circumstances of the individual taxpayer. Unique circumstances, however, do not include the maintenance of an affluent or luxurious standard of living.

(ii) Information from taxpayer. -- In determining a reasonable amount for basic living expenses the director will consider any information provided by the taxpayer including --

(A) The taxpayer's age, employment status and history, ability to earn, number of dependents, and status as a dependent of someone else;

(B) the amount reasonably necessary for food, clothing, housing (including utilities, home-owner insurance, home-owner dues, and the like), medical expenses (including 2008 Tax Ct. Summary LEXIS 101">*113 health insurance), transportation, current tax payments (including federal, state, and local), alimony, child support, or other court-ordered payments, and expenses necessary to the taxpayer's production of income (such as dues for a trade union or professional organization, or child care payments which allow the taxpayer to be gainfully employed);

(C) The cost of living in the geographic area in which the taxpayer resides;

(D) The amount of property exempt from levy which is available to pay the taxpayer's expense;

(E) Any extraordinary circumstances such as special education expenses, a medical catastrophe, or natural disaster; and

(F) Any other factor that the taxpayer claims bears on the economic hardship and brings to the attention of the director.