121 T.C. No. 3




                UNITED STATES TAX COURT



           YVONNE E. THURNER, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent

            SCOTT P. THURNER, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket Nos. 9971-01, 3586-02.        Filed July 11, 2003.



     On Jan. 30, 1991, the Court entered a decision in
docket No. 8407-87 redetermining Ps’ joint tax
liabilities for 1980 and 1981. In June 1991, R
assessed the taxes, additions to tax, and increased
interest as set forth in the above-referenced decision.
Ps’ joint tax liability for 1980 was fully paid as of
May 4, 1992. A portion of Ps’ joint tax liability for
1981 remained unpaid as of the dates the petitions were
filed in these cases.

     On Dec. 2, 1991, Ps filed a joint Federal income
tax return for 1990 reporting tax due. No remittance
was made with this return. Ps submitted a delinquent
joint return for 1992, and R made adjustments to this
return. R subsequently assessed taxes and penalties
due from Ps for 1990 and 1992.
                         - 2 -

     On Jan. 7, 2000, the United States brought an
action against Ps in Federal District Court to reduce
to judgment their unpaid assessments for 1981, 1990,
and 1992. Ps raised only frivolous arguments in this
proceeding. Both Ps executed the pertinent documents
filed in the District Court action. Neither P asserted
in the District Court action an entitlement to relief
from joint and several liability pursuant to sec. 6015,
I.R.C. On Aug. 11, 2000, the District Court granted
the Government’s motion for summary judgment and
entered a judgment against Ps in the amounts of the
unpaid assessments for 1981, 1990, and 1992. The
District Court’s judgment was affirmed on appeal and
became final.

     In 2001, Ps filed separate elections with R
claiming relief from joint and several liability under
sec. 6015, I.R.C. R did not respond to Ps’ elections.
Ps then filed with the Court separate petitions for
determination of relief from joint and several
liability for 1980, 1981, 1990, and 1992. R filed a
motion for summary judgment in each case.

      Held: R’s motions for summary judgment are
granted in that Ps cannot claim relief under sec. 6015,
I.R.C., for 1980 inasmuch as their joint tax liability
for that year was fully paid prior to the effective
date of sec. 6015, I.R.C. Held, further, R’s motion
for summary judgment as to P-H is granted as to the
taxable years 1981, 1990, and 1992 in that P-H
“participated meaningfully” in the District Court
collection action, and, therefore, P-H’s claims are
barred under the doctrine of res judicata as delineated
in sec. 6015(g)(2), I.R.C. Held, further, R’s motion
for summary judgment as to P-W is denied as to the
taxable years 1981, 1990, and 1992 in that the question
whether P-W “participated meaningfully” in the District
Court collection action presents a material issue of
fact.
                                 - 3 -

     Yvonne E. Thurner, pro se in docket No. 9971-01.

     Scott P. Thurner, pro se in docket No. 3586-02.

     James M. Klein, Mark J. Miller, and Charles Hall,   for

respondent.



                                OPINION


     COHEN, Judge:   This case was assigned to Chief Special Trial

Judge Peter J. Panuthos, pursuant to the provisions of section

7443A(b)(5) and Rules 180, 181, and 183.1   The Court agrees with

and adopts the opinion of the Chief Special Trial Judge, which is

set forth below.

               OPINION OF THE SPECIAL TRIAL JUDGE

     PANUTHOS, Chief Special Trial Judge:   These consolidated

cases are before the Court on respondent’s Motions for Summary

Judgment, as supplemented, filed pursuant to Rule 121.   As

explained in detail below, we shall grant respondent’s Motion for

Summary Judgment, as supplemented, as to petitioner Scott P.

Thurner, and grant respondent partial summary judgment as to

petitioner Yvonne E. Thurner.




     1
        Section references are to sections of the Internal
Revenue Code, as amended, and Rule references are to the Tax
Court Rules of Practice and Procedure.
                                - 4 -

Background

     The record establishes and/or the parties do not dispute the

following facts.    Petitioner Yvonne E. Thurner and petitioner

Scott P. Thurner (petitioners) are husband and wife.    At the time

the petitions were filed, petitioners resided in Elm Grove,

Wisconsin.

     A.    Taxable Years 1980 and 1981

     Petitioners filed joint Federal income tax returns for 1980

and 1981.    Respondent subsequently determined deficiencies of

$351,855 and $512,052 in petitioners’ Federal income taxes for

1980 and 1981, respectively.    Respondent also determined that

petitioners were liable for additions to tax for negligence under

section 6653(a) and increased interest under section 6621(c) for

1980 and 1981.    Petitioners challenged respondent’s

determinations in a petition filed with the Court at docket No.

8407-87.

     In Thurner v. Commissioner, T.C. Memo. 1990-529, we

sustained (with minor adjustments) respondent’s determinations

for 1980 and 1981.    The Court entered its decision in docket No.

8407-87 on January 30, 1991, and no appeal was filed.

     In June 1991, respondent assessed the deficiencies,

additions to tax, and increased interest as redetermined by the

Court in Thurner v. Commissioner, supra.    Shortly thereafter,

respondent began collection activities.    Petitioners’ tax
                                  - 5 -

liability for 1980 was fully paid as of May 4, 1992.   Although

respondent collected a portion of petitioners’ taxes for 1981,

their tax liability for that year was not fully paid as of the

dates the petitions were filed in the instant cases.

     B.   Taxable Years 1990 and 1992

     On December 2, 1991, petitioners filed a joint Federal

income tax return for 1990 reporting tax due in the amount of

$217,475.   Petitioners failed to remit with their return the

amount reported to be due.   On December 2, 1991, respondent

assessed the tax that petitioners reported due for 1990 and

statutory interest.   Sec. 6201(a)(1).

     Petitioners submitted to respondent a delinquent joint tax

return for 1992.   Respondent reviewed the return and determined,

pursuant to the so-called math error provisions of section

6213(b), that petitioners were liable for tax in the amount of

$75,532, as well as for penalties and interest.   On April 28,

1997, respondent assessed such tax, penalties, and interest for

1992.

     C.   Collection Litigation

     On January 7, 2000, the United States filed suit against

petitioners in the United States District Court for the Eastern

District of Wisconsin (docket No. 00-C-0082) to reduce to

judgment the unpaid assessments entered against petitioners for

the taxable years 1981, 1990, and 1992.   (For convenience, we
                                 - 6 -

will refer to the United States District Court for the Eastern

District of Wisconsin as the District Court and the

aforementioned proceeding as the District Court collection

action.)   The records in the instant cases include copies of

various documents that petitioners filed in the District Court

collection action.   These documents reflect that petitioners,

prosecuting the case pro sese, raised only frivolous and

groundless arguments.   Both petitioners signed the documents

filed with the District Court.    Neither petitioner asserted in

the District Court collection action an entitlement to relief

from joint and several liability under section 6015.

     On August 11, 2000, the District Court granted the

Government’s motion for summary judgment and entered a judgment

in favor of the United States for unpaid assessed balances for

the taxable years 1981, 1990, and 1992 in the amounts of

$1,924,000.19, $537,514.10, and $193,618.56, respectively.

Petitioners filed an appeal with the Court of Appeals for the

Seventh Circuit.   The Court of Appeals affirmed the District

Court’s judgment and granted the Government’s motion for

sanctions against petitioners for prosecuting a frivolous appeal.

United States v. Thurner, 21 Fed. Appx. 477 (7th Cir. 2001).       The

Supreme Court later denied petitioners’ petition for writ of

certiorari.
                               - 7 -

     D.   Forms 8857

     On December 21, 2000, petitioner Yvonne E. Thurner filed

with respondent Form 8857, Request for Innocent Spouse Relief,

requesting relief from joint and several liability under section

6015 with regard to the taxable years 1980, 1981, 1990, and 1992.

On August 2, 2001, petitioner Scott P. Thurner filed with

respondent Form 8857 requesting relief from joint and several

liability under section 6015 with regard to the taxable years

1980, 1981, 1990, and 1992.   Respondent did not respond to

petitioners’ claims for relief from joint and several liability.

     E.   Petitions

     On August 10, 2001, petitioner Yvonne E. Thurner filed with

the Court a petition for determination of relief from joint and

several liability on a joint return with regard to her tax

liabilities for 1980, 1981, 1990, and 1992.   On February 15,

2002, petitioner Scott P. Thurner filed with the Court a petition

for determination of relief from joint and several liability on a

joint return with regard to his tax liabilities for 1980, 1981,

1990, and 1992.   Although the petitions are not entirely clear,

it appears that petitioners claim that they are entitled to

relief under section 6015(b) and (f).2


     2
        The record indicates that, at the time the petitions were
filed in these cases, petitioners were not divorced or legally
separated and that petitioners continued to live together.
Therefore, petitioners would not qualify for relief from joint
and several liability under sec. 6015(c).
                                 - 8 -

     F.   Respondent’s Motions for Summary Judgment

     As indicated, respondent maintains that he is entitled to

judgment in these cases as a matter of law.      Respondent avers

that petitioners are not eligible for relief from joint and

several liability under section 6015 for 1980 because their taxes

for that year were paid in full as of May 4, 1992--a date prior

to the effective date of section 6015.       Respondent also contends

that petitioners are barred from claiming relief from joint and

several liability for the taxable years 1981, 1990, and 1992

under the doctrine of res judicata.      In particular, respondent

asserts that petitioners’ claims are barred because they failed

to raise such claims in the earlier District Court collection

action.

     Petitioners filed Objections to respondent’s Motions for

Summary Judgment.   Both petitioners submitted affidavits along

with their Objections.   Petitioner Scott P. Thurner’s affidavit

states in pertinent part:

     2. All matters in any way relating to the disputes
     between my family and the Internal Revenue Service,
     prior to my wife’s decision to pursue Innocent
     Spouse Relief, was handled exclusively by myself.

                     *   *   *    *      *   *   *

     7. The only thing my wife did during the * * *
     [District Court collection action] was to sign the
     necessary documents in the places that I directed her
     to sign.
                                - 9 -

Consistent with these statements, petitioner Yvonne E. Thurner’s

affidavit states that, prior to the time she claimed relief from

joint and several liability under section 6015, all of the

family’s tax matters were handled exclusively by her husband.

     Pursuant to notice, these cases were called for hearing at

the Court’s motions session in Washington, D.C.    Following the

hearing, respondent filed supplements to his motions describing

the bases for the assessments entered against petitioners for

1990 and 1992 and providing transcripts of account for the years

in issue.

Discussion

     Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials.   See Fla. Peach Corp. v.

Commissioner, 

, 681 (1988).    Summary judgment may be

granted with respect to all or any part of the legal issues in

controversy “if the pleadings, answers to interrogatories,

depositions, admissions, and any other acceptable materials,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that a decision may be

rendered as a matter of law.”   Rule 121(b); Sundstrand Corp. v.

Commissioner, 

, 520 (1992), affd. 

 (7th

Cir. 1994); Zaentz v. Commissioner, 

, 754 (1988);

Naftel v. Commissioner, 

, 529 (1985).    The moving

party bears the burden of proving that there is no genuine issue
                               - 10 -

of material fact, and factual inferences will be read in a manner

most favorable to the party opposing summary judgment.   See

Dahlstrom v. Commissioner, 

, 821 (1985); Jacklin v.

Commissioner, 

, 344 (1982).

     A.   Section 6015

     Spouses filing joint Federal income tax returns generally

are jointly and severally liable for all taxes due.   Sec.

6013(d)(3).   However, under certain circumstances, section 6015

provides that a spouse may be relieved from joint and several

liability on a joint return.

     Section 6015 was enacted as part of the Internal Revenue

Service Restructuring and Reform Act of 1998 (RRA 1998), Pub. L.

105-206, sec. 3201(a), 112 Stat. 685, 734.   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, but

remaining unpaid as of such date.   RRA 1998 sec. 3201(g), 112

Stat. 740.    Section 6015 is not applicable if the tax was paid in

full on or before July 22, 1998.    Washington v. Commissioner, 

, 155 (2003).

     Broadly stated, section 6015(b) provides procedures for

relief from liability applicable to all joint filers; section

6015(c) provides procedures to limit liability for taxpayers who

filed a joint return but are no longer married, are legally

separated, or are not living together; and section 6015(f)
                              - 11 -

provides for equitable relief in cases where relief is not

available to a taxpayer under section 6015(b) or (c).

     Petitioners invoked the Court’s jurisdiction in these cases

under section 6015(e)(1)(A)(i)(II).    The latter provision permits

a taxpayer to file a petition with the Court if 6 months have

elapsed since the taxpayer filed his or her election for relief

with the Commissioner and the Commissioner has not issued a final

determination granting or denying relief.

     B.   Taxable Year 1980

     RRA 1998 sec. 3201(g), 112 Stat. 740, states in unambiguous

terms that relief under section 6015 is available only with

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

any liability for tax arising on or before July 22, 1998, but

remaining unpaid as of such date.   There is no dispute that

petitioners’ tax liability for 1980 arose before July 22, 1998,

and that such liability was fully paid before that date.

Consequently, we hold that respondent is entitled to judgment as

a matter of law that petitioners are not eligible for relief

under section 6015 with regard to their tax liability for 1980.

See Washington v. Commissioner, supra.

     C.   Taxable Years 1981, 1990, and 1992

     The judicial doctrine of res judicata provides that, when a

court of competent jurisdiction enters a final judgment on the

merits of a cause of action, the parties to the action are bound
                                 - 12 -

by every matter that was or could have been offered and received

to sustain or defeat the claim.        Commissioner v. Sunnen, 

, 597 (1948); see Gustafson v. Commissioner, 

, 91

(1991); Wooten v. Commissioner, T.C. Memo. 2003-113.       The

doctrine of res judicata “serves to promote judicial economy and

the repose of disputes” by avoiding repetitious lawsuits.

Gustafson v. Commissioner, supra at 91.       Because Federal income

taxes are determined on an annual basis, each year is a separate

cause of action, and res judicata is applied to bar subsequent

proceedings involving the same tax year.       Commissioner v. Sunnen,

supra at 597-598; Calcutt v. Commissioner, 

, 21 (1988).

     Section 6015(g)(2) modifies the common law doctrine of res

judicata with regard to claims for relief from joint and several

liability.   Section 6015(g)(2)3 provides in pertinent part:

     SEC. 6015(g).    Credits and Refunds.--

                  *     *    *     *      *    *    *

          (2) Res judicata.--In the case of any election
     under subsection (b) or (c), if a decision of a court
     in any prior proceeding for the same taxable year has
     become final, such decision shall be conclusive except
     with respect to the qualification of the individual for
     relief which was not an issue in such proceeding. The
     exception contained in the preceding sentence shall not


     3
        Sec. 313(a)(2)(A) of the Consolidated Appropriations Act
of 2001, Pub. L. 106-554, 114 Stat. 2763A-640 (2000),
redesignated former subsec. (g) as subsec. (h) and inserted after
subsec. (f) a new subsec. (g) (as quoted above). For a more
detailed discussion of the legislative history of sec.
6015(g)(2), see Vetrano v. Commissioner, 

, 280
(2001).
                              - 13 -

     apply if the court determines that the individual
     participated meaningfully in such prior proceeding.

     As we pointed out in Vetrano v. Commissioner, 

,

280 (2001), under common law principles of res judicata, a

taxpayer who was a party to a prior proceeding for the same

taxable year would be barred from seeking relief from joint and

several liability whether or not the claim had been raised as an

issue in the prior proceeding.   Section 6015(g)(2) alters that

result by providing:

     an individual cannot make an election under section
     6015(b) or (c) for any taxable year that is the subject
     of a final court decision, unless the individual’s
     qualification for relief under section 6015(b) or (c)
     was not an issue in the prior court proceeding and the
     individual did not participate meaningfully in the
     prior proceeding. * * * [Vetrano v. Commissioner,
     supra at 278.]

     Petitioners assert that respondent’s reliance on the

doctrine of res judicata in these cases is misplaced.   First,

petitioners maintain that section 6015(g)(2) expressly limits the

application of res judicata to claims for relief under section

6015(b) and (c), and, therefore, they are not barred from

asserting that they are entitled to equitable relief under

subsection (f).   Second, petitioners argue that respondent has

failed to prove that petitioners (particularly petitioner

Yvonne E. Thurner) participated meaningfully in the District

Court collection action within the meaning of section 6015(g)(2).
                              - 14 -

     Contrary to petitioners’ initial argument, we conclude that

a claim for equitable relief under section 6015(f) is subject to

the application of the doctrine of res judicata as delineated in

section 6015(g)(2).   In Fernandez v. Commissioner, 

,

330-331 (2000), in the context of a discussion regarding our

jurisdiction to review claims for equitable relief under section

6015(f), we observed:

          Section 6015(f) provides an additional opportunity
     for relief to those taxpayers who do not otherwise meet
     the requirements of subsection (b) or (c).
     Specifically, section 6015(f) provides that if, taking
     into account all the facts and circumstances, it is
     inequitable to hold the individual liable for any
     unpaid tax or any deficiency (or any portion of
     either), and relief is not available to such individual
     under subsection (b) or (c), the Secretary may relieve
     such individual of such liability. Section 6015(f)
     does not require an affirmative election for relief as
     do subsections (b) and (c). We interpret this to mean
     that section 6015(f) provides an additional opportunity
     for relief to those individuals who elect relief under
     subsection (b) or (c) but do not meet one or more of
     the respective requirements of those subsections. In
     fact, a prerequisite for relief under section 6015(f)
     is that relief is not available under section 6015(b)
     or (c). See sec. 6015(f)(2). * * *

     Consistent with the foregoing, a claim for equitable relief

under section 6015(f) is subordinate and ancillary to a claim for

relief under section 6015(b) or (c).   Given the secondary nature

of such claims, an express reference in subsection (g)(2) to a

claim for equitable relief under section 6015(f) is not necessary

to bring those claims within the purview of subsection (g)(2).

Simply put, as a subordinate and ancillary claim, a claim for
                                - 15 -

equitable relief under section 6015(f) is subject to the same

standards for the application of the doctrine of res judicata

that Congress imposed under section 6015(g)(2) with respect to

claims for relief under section 6015(b) and (c).4

     There is no dispute that the traditional prerequisites for

the application of the doctrine of res judicata are present in

these cases.   As previously mentioned, petitioners were parties

to the District Court collection action brought by the Government

to reduce to judgment petitioners’ unpaid assessments for the

taxable years 1981, 1990, and 1992.      The District Court is a

court of competent jurisdiction with regard to such collection

actions.   Sec. 7402.   The District Court collection action was

initiated on January 7, 2000, well after the July 22, 1998,

effective date of section 6015.    Thus, petitioners could have

(but did not) raise their claims for relief from joint and

several liability under section 6015 as a defense in the District

Court collection action.    Cf. United States v. Shanbaum, 

, 313-314 (5th Cir. 1994).    The District Court’s decision

granting the Government’s Motion for Summary Judgment, a decision



     4
        For the sake of completeness, we note that the Secretary
published regulations, applicable to all elections or requests
for relief filed on or after July 18, 2002, in which the
Secretary appears to take the position that claims for equitable
relief under sec. 6015(f) are subject to the application of the
doctrine of res judicata under sec. 6015(g)(2). See secs.
1.6015-1(e), (h)(1) and 1.6015-4, Income Tax Regs., 67 Fed. Reg.
47285, 47286 (July 18, 2002).
                              - 16 -

on the merits, was affirmed on appeal and is now final.    See

Kunkes v. United States, 

, 1550 n.2 (Fed. Cir. 1996);

Hubicki v. ACF Indus., Inc., 

, 524 (3d Cir. 1973).

     Petitioners nevertheless contend that respondent cannot rely

on the doctrine of res judicata because the question whether

petitioners “participated meaningfully” in the District Court

collection action, within the meaning of section 6015(g)(2),

presents a material issue of fact.     We note a subtle divergence

in petitioners’ positions on this point.    Specifically, while

petitioner Scott P. Thurner contends in very general terms that

respondent failed to satisfy his burden of proving that there is

no dispute as to a material fact, petitioner Yvonne E. Thurner

goes a step further and alleges that she did not participate

meaningfully in the District Court collection action inasmuch as

she simply complied with her husband’s instructions to sign the

pleadings and various other documents that were filed with the

District Court.

     The record clearly establishes that petitioner Scott P.

Thurner participated meaningfully in the District Court

collection action.   The documents that petitioners filed in the

District Court collection action were signed by both petitioners

and amply demonstrate that petitioner Scott P. Thurner was fully

engaged in that proceeding.   In addition, petitioner Scott P.

Thurner acknowledged in the affidavit attached to his Objection
                              - 17 -

that he maintained exclusive control over all tax matters

including the handling of the District Court collection action.

Accordingly, we hold that respondent is entitled to summary

judgment that petitioner Scott P. Thurner is barred under section

6015(g)(2) from claiming relief under section 6015 for the years

1981, 1990, and 1992.

     In contrast, we are unable to conclude on this record that

petitioner Yvonne E. Thurner participated meaningfully in the

District Court collection action.   Petitioner Yvonne E. Thurner’s

assertion that she merely complied with her husband’s

instructions to sign the pleadings and various other documents

that were filed in the District Court collection action raises an

issue of material fact as to her level of participation in that

proceeding.   Under the circumstances, drawing factual inferences

in a manner most favorable to the party opposing summary

judgment, see Dahlstrom v. Commissioner, 85 T.C. at 821, we

conclude that respondent is not entitled to summary judgment that

petitioner Yvonne E. Thurner is barred from claiming relief under

section 6015 for the years 1981, 1990, and 1992.   The question of

the applicability of the bar of res judicata under section

6015(g)(2) as to petitioner Yvonne E. Thurner can be resolved

only after further development of the record through discovery or

trial of the case.
                             - 18 -

Conclusion

     Petitioners are not entitled to relief under section 6015

with regard to the taxable year 1980 because their taxes for that

year were fully paid prior to the effective date of section 6015.

In addition, petitioner Scott P. Thurner is not entitled to

relief under section 6015 with regard to the taxable years 1981,

1990, and 1992 due to the application of the doctrine of res

judicata as set forth in section 6015(g)(2).

     To reflect the foregoing,


                                      An Order and Decision will be

                                 entered in docket No. 3586-02

                                 granting respondent’s Motion for

                                 Summary Judgment, as supplemented,

                                 and an appropriate Order will be

                                 issued in docket No. 9971-01.