T.C. Summary Opinion 2007-201



                        UNITED STATES TAX COURT



                   PATRICIA H. DEVLIN, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 8128-05S.             Filed November 28, 2007.



        Patricia H. Devlin, pro se.

        Jack T. Anagnostis, for respondent.



     COHEN, Judge:     This case was heard pursuant to the

provisions of section 7463 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.     The trial was conducted by Special Trial Judge Carleton D.

Powell, who died after the case was submitted.      The parties have
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declined the opportunity for a new trial or for supplementation

of the record and have expressly consented to reassignment of the

case for opinion and decision.    Unless otherwise indicated, all

section references are to the Internal Revenue Code as amended.

The sole issue to be decided is whether petitioner is entitled to

relief under section 6015(f) for 1999.

                             Background

     Some of the facts have been stipulated, and the stipulated

facts are incorporated into our findings by this reference.

Petitioner resided in New Jersey at the time that her petition

was filed.   In the midst of personal and financial difficulties,

petitioner and her former spouse, Robert N. Collins (Collins),

separated in mid-1999.    The couple formally divorced in May 2000.

On October 26, 2000, petitioner signed a joint Federal income tax

return for 1999, which was not prepared by petitioner and was

later filed by Collins.   The return signed by petitioner reported

total tax of $20,850 and a withholding credit of $1,326.

     Throughout 1999 and until March 2000, petitioner was

employed as a bookkeeper for Collins’s construction business.

She was aware of all financial information for 1999 regarding the

business.    In March 2000, petitioner left her job with Collins’s

business because he wanted to hire his girlfriend.   Petitioner

obtained a full-time job shortly thereafter and also received

some spousal and child support incident to the divorce from
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Collins.    At the time that she signed the 1999 return, petitioner

was aware of the financial difficulties with Collins’s business

and did not know how Collins would be able to pay the tax

liability stated on the return.    Petitioner’s father died in

November 2000.

     At some point after his divorce from petitioner, Collins

filed for bankruptcy.    In late 2003, petitioner completed,

signed, and filed with the Internal Revenue Service Form 8857,

Request for Innocent Spouse Relief, and Form 12510, Questionnaire

for Requesting Spouse.    On Form 12510, petitioner reported net

income exceeding specified expenses by more than $1,000 per

month.    Petitioner’s request for relief was denied in full on

March 31, 2005.

                             Discussion

     Generally, married taxpayers may elect to file a joint

Federal income tax return.    Sec. 6013(a).   When a husband and

wife elect to file a joint Federal income tax return, they are

jointly and severally liable for the entire tax due on that

return.    Sec. 6013(d)(3); Butler v. Commissioner, 

,

282 (2000).    However, section 6015 provides for relief for a

requesting spouse from joint and several liability in certain

circumstances.    Because this case involves only an underpayment

of tax shown on a return, only section 6015(f) applies.     Petrane
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v. Commissioner, 

, 4 n.4 (2007); Washington v.

Commissioner, 

, 147 (2003).

     Section 6015(f) provides for equitable relief if, taking

into account all of the facts and circumstances, it is

inequitable to hold the requesting spouse liable for any unpaid

tax or deficiency.   As directed by section 6015(f), the

Commissioner has prescribed guidelines under which a taxpayer may

qualify for equitable relief from liability on a joint return for

tax owed on income attributable to the nonrequesting spouse.    See

Rev. Proc. 2003-61, 2003-2 C.B. 296.   Rev. Proc. 2003-61, sec.

4.02, 2003-2 C.B. at 298, provides in relevant part that relief

ordinarily will be granted to a requesting spouse with regard to

underpayments of tax attributable to the nonrequesting spouse if

three criteria are met.   The first criterion, that the requesting

spouse is no longer married to or is legally separated from the

nonrequesting spouse or is not a member of the same household at

any time during the 12 months prior to the request for relief, is

satisfied in this case.

     The second criterion, that, at the time the joint return was

signed, the requesting spouse had no knowledge or reason to know

that the tax would not be paid and that it was reasonable to

believe that the nonrequesting spouse would pay the liability, is

not satisfied in this case.   Petitioner and Collins were having

both personal and business financial difficulties throughout
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1999.   At the time petitioner signed the 1999 return, she knew

that Collins’s business was in financial difficulty and had been

unable to cover expenses.   She also was aware that Collins

personally spent more money than he made in 1999.   Petitioner

testified that, at the time she signed the 1999 return, she did

not know how Collins could afford to pay the outstanding tax

liability reported on the return.   Petitioner has not shown that

it was reasonable to rely on Collins to pay the tax due for 1999.

     The third criterion under section 4.02 of Rev. Proc. 2003-61

is that the requesting spouse will suffer economic hardship if

relief is not granted.   Economic hardship for these purposes is

defined as the inability to pay reasonable basic living expenses

if the requesting spouse is held liable for the tax owed.     See

sec. 301.6343-1(b)(4), Proced. & Admin. Regs.   On the Form 12510,

she reported monthly income in excess of monthly expenses.

Petitioner has not shown that she will suffer economic hardship

if relief is not granted; thus, the third criterion is not met.

     Rev. Proc. 2003-61, section 4.03, 2003-2 C.B. at 298,

provides an alternative test for equitable relief if a taxpayer

does not meet the requirements of Rev. Proc. 2003-61, section

4.02.   Rev. Proc. 2003-61, section 4.03, lists several relevant

factors that the Commissioner considers and weighs in making a

determination about whether section 6015(f) relief should be

granted.   Those factors include:
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     (i) Whether the requesting spouse is separated or divorced

from the nonrequesting spouse;

     (ii) whether the requesting spouse will suffer economic

hardship if relief from the liability is not granted;

     (iii) whether the requesting spouse had knowledge or reason

to know either of the item giving rise to a tax deficiency or

that the nonrequesting spouse would not pay the tax liability;

     (iv) whether the nonrequesting spouse has a legal obligation

pursuant to a divorce decree or agreement to pay the outstanding

liability;

     (v) whether the requesting spouse has significantly

benefited (beyond normal support) from the unpaid liability or

item giving rise to a deficiency; and

     (vi) whether the requesting spouse has made a good faith

effort to comply with Federal income tax laws in the tax years

subsequent to the years to which the request for relief relates.

Rev. Proc. 2003-61, sec. 4.03(2)(a).

     Although petitioner is divorced from Collins and has not

failed to comply with Federal income tax laws individually in tax

years subsequent to 1999, several of the other Rev. Proc. 2003-

61, section 4.03, factors weigh against granting her relief from

joint and several liability.   We have already concluded that

petitioner has not shown that she will suffer economic hardship

if relief is not granted.   We have also concluded that petitioner
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knew or had reason to know that Collins would not pay the tax

liability shown on the joint return for 1999 that she signed.

Both of these factors weigh against granting petitioner relief.

     Petitioner argues that, as part of their divorce settlement,

she and Collins agreed that Collins would be responsible for all

personal and business bills.   Petitioner acknowledges that the

agreement did not specifically include the tax liability, which

was not then known.   There is no reliable evidence that Collins

has a legal obligation pursuant to the divorce decree to pay the

entire joint tax liability for 1999; thus, this factor does not

favor granting petitioner relief from liability.

     Petitioner did not, however, benefit beyond normal support

from the underpayment in tax for 1999.   In mid-1999, petitioner

separated from Collins and moved into a modest apartment with her

daughter.   She continued to work as the bookkeeper for Collins’s

business until March 2000, at which time she left her job because

Collins wanted to hire his girlfriend to work for the business.

Petitioner received spousal and child support from Collins after

leaving the business, and she found other employment shortly

thereafter.   For the most part, petitioner has supported herself

since she left Collins.   She has not benefited substantially

beyond basic reasonable support from the underpayment in taxes.

Finally, respondent acknowledges that petitioner has complied
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with Federal income tax laws since 1999.   These factors favor

granting petitioner relief.

     Rev. Proc. 2003-61, sec. 4.03(2)(b), 2003-2 C.B. at 299,

lists two additional factors that may weigh in favor of equitable

relief under section 6015(f) but that will not weigh against

relief if not present:

          (i) * * * Whether the nonrequesting spouse abused
     the requesting spouse. The presence of abuse is a
     factor favoring relief. A history of abuse by the
     nonrequesting spouse may mitigate a requesting spouse’s
     knowledge or reason to know.

          (ii) * * * Whether the requesting spouse was in
     poor mental or physical health on the date the
     requesting spouse signed the return or at the time the
     requesting spouse requested relief. * * *

     Petitioner reported on her Form 12510 that she had never

been abused by Collins, and she did not report that she was

suffering from a mental or physical ailment at the time she

signed the joint return.   Petitioner did report that her father

was ill and dying at the time that she signed the return in

October 2000.   Although the Court recognizes the difficulties

inherent in divorce and death, petitioner has not asserted and we

do not find that she was suffering from poor mental or physical

health at the time she signed the joint return or at the time she

requested relief.   Thus, these additional factors do not weigh in

favor of relief for petitioner.

     Taking into account all of the facts and circumstances,

particularly petitioner’s extensive knowledge regarding Collins’s
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financial situation and the lack of economic hardship in this

case, we are not persuaded that it is inequitable to hold

petitioner liable for the underpayment for the year in issue or

that it was an abuse of discretion for respondent to deny

petitioner relief under section 6015(f).    In reaching our

holding, we have considered all arguments made, and, to the

extent not mentioned, we conclude that they are irrelevant, moot,

or without merit.

     To reflect the foregoing,


                                          Decision will be entered

                                     for respondent.