T.C. Summary Opinion 2010-93



                     UNITED STATES TAX COURT



              PATRICIA A. NICOLETTI, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14384-05S.              Filed July 14, 2010.



     Patricia A. Nicoletti, pro se.

     Steven W. LaBounty, for respondent.



     CARLUZZO, Special Trial Judge:   This section 6015(e)1 case

was heard pursuant to the provisions of section 7463.    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.


     1
      Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended, in effect for the
relevant period.
                                 - 2 -

     In a final notice of determination dated June 9, 2005,

respondent denied petitioner’s claim for section 6015 relief with

respect to the joint and several liability arising from the 1996

and 2001 joint Federal income tax returns she filed with Michael

Nicoletti (her former spouse).    Because the liability for each

year results from an underpayment of the tax    shown on the joint

return, she does not qualify for relief under section 6015(b) or

(c) for either year.   That being so, we consider her entitlement

to equitable relief under section 6015(f).

                            Background

     Some of the facts have been stipulated and are so found.

At the time the petition was filed, petitioner resided in

Missouri.

     Petitioner and her former spouse were married in March 1985.

They separated in January 2003 and were divorced in April 2004

pursuant to a “Judgment of Dissolution of Marriage” (the

judgment).   Unpaid Federal income tax liabilities for various

years are noted in the judgment, but responsibility for the

payment of those liabilities is not addressed.    As relevant here

and among other things, the judgment obligated petitioner and her

former spouse to sell the marital residence and divide equally

the net proceeds from the sale.
                                - 3 -

       Although both were obligated to do so, neither petitioner

nor her former spouse filed a Federal income tax return for 1988,

1989, 1990, 1991, 1992, or 1993.    According to petitioner, during

the course of her marriage she routinely provided her tax

information to her former spouse expecting that he would prepare

and file a Federal income tax return for each of those years.

She never asked him, however, whether any of the returns had, in

fact, been filed.    Ultimately and in accordance with an agreement

or agreements with respondent, income tax assessments were made

against petitioner and her former spouse for each of those years.

Among other of her liabilities, unpaid liabilities resulting from

those assessments were discharged on February 10, 2004, in a

bankruptcy proceeding she initiated on October 31, 2003.    Several

months after the discharge, on July 7, 2004, the marital

residence was sold.    Petitioner’s share of the net proceeds

totaled $46,588.24.

       The 2001 joint Federal income tax return of petitioner and

her former spouse was filed on April 15, 2002.    That return shows

an income tax liability of $5,718 and an estimated tax penalty of

$74.    Taking into account withholding credits, the return shows

$2,506 of tax due, $1,200 of which was paid with the return.

       The 1996 joint Federal income tax return of petitioner and

her former spouse was filed on April 15, 2003, several months

before petitioner initiated the above-referenced bankruptcy
                                - 4 -

proceeding.   That return shows a $3,068 income tax liability and

a $79 estimated tax penalty.    Taking into account withholding

credits, the return shows $1,727 of tax due, none of which was

paid with the return.

     Petitioner submitted to respondent a Form 8857, Request for

Innocent Spouse Relief (request for relief), on March 29, 2004,

and a Form 12510, Questionnaire for Requesting Spouse

(questionnaire), on May 14, 2004.    In those documents petitioner

describes her financial situation and strongly suggests that it

would be a hardship if she were held responsible for the

outstanding tax liabilities for 1996 and 2001.     On her

questionnaire she noted that it was her belief that her former

spouse would pay those liabilities.

     In the final notice of determination respondent denied

petitioner’s request for relief on the ground that she failed to

establish a reasonable belief that her former spouse would pay

the unpaid tax liabilities.

                              Discussion

     In general, married taxpayers may elect to file a joint

Federal income tax return.    Sec. 6013(a).   After making the

election for a year, each spouse is jointly and severally liable

for the entire Federal income tax liability assessed for that

year, whether as reported on the joint return or subsequently

determined to be due.   Sec. 6013(d)(3); see sec. 1.6013-4(b),
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Income Tax Regs.   Subject to various conditions and in a variety

of ways set forth in section 6015, an individual who has made a

joint return with his or her spouse for a year may elect to seek

relief from the joint and several liability arising from that

joint return.

     A taxpayer who does not qualify for relief under section

6015(b) or (c), as is the situation here, may be relieved from

joint and several liability pursuant to section 6015(f) if,

taking into account all the facts and circumstances, it would be

inequitable to hold the taxpayer liable for any unpaid tax or

deficiency.

     We review de novo petitioner’s entitlement to relief under

section 6015(f).   See Porter v. Commissioner, 

(2009).

     The Commissioner has issued revenue procedures listing

factors normally considered in determining whether relief should

be granted under section 6015(f).   Rev. Proc. 2003-61, 2003-2

C.B. 296, modifying and superseding Rev. Proc. 2000-15, 2000-1

C.B. 447.2

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

forth threshold conditions that individuals seeking relief under




     2
      The guidelines set forth in Rev. Proc. 2003-61, 2003-2 C.B.
296, are effective for requests for relief filed, as in this
case, on or after Nov. 1, 2003. Id. sec. 7, 2003-2 C.B. at 299.
                                - 6 -

section 6015(f) must satisfy.   Respondent concedes that

petitioner satisfies the threshold conditions.

     If the requesting spouse satisfies the threshold

requirements of Rev. Proc. 2003-61, sec. 4.01, then Rev. Proc.

2003-61, sec. 4.02, 2003-2 C.B. at 298, sets forth circumstances

in which relief will ordinarily be granted under section 6015(f)

with respect to an underpayment of a properly reported liability.

     To qualify for relief under Rev. Proc. 2003-61, sec.

4.02(1), 2003-2 C.B. at 298, the spouse seeking relief must:     (1)

No longer be married to, be legally separated from, or not have

been a member of the same household of the other spouse at any

time during the 12-month period ending on the date of the request

for relief; (2) have had no knowledge or reason to know when the

spouse seeking relief signed the return that the other spouse

would not pay the tax liability; and (3) suffer economic hardship

if relief is not granted.   The parties dispute whether:   (1)

Petitioner had knowledge or reason to know that her former spouse

would not pay the tax liabilities; and (2) whether she would

suffer economic hardship if her request for relief were not

granted.

     To satisfy the second requirement, the requesting spouse

must establish that:   (1) When the return was signed, the

requesting spouse had no knowledge or reason to know that the tax

reported on the return would not be paid; and (2) it was
                                 - 7 -

reasonable for the requesting spouse to believe that the

nonrequesting spouse would pay the tax shown due.     Morello v.

Commissioner, T.C. Memo. 2004-181; Ogonoski v. Commissioner, T.C.

Memo. 2004-52; Collier v. Commissioner, T.C. Memo. 2002-144.

     According to petitioner, she did not know, or have reason to

know that the unpaid tax shown to be due on each return would not

be paid by her former spouse.    She argues that respondent erred

by concluding otherwise.   With respect to 1996, petitioner’s

cursory trial testimony that she “just thought he was paying it”

without providing the basis for her “thinking” tells us little

about the reasonableness of her expectation.    For 2001 petitioner

points out that one-half of the amount of tax shown due on the

return was paid by her former spouse at the time the return was

filed.   She reasoned that “if [her former spouse] wasn’t going to

pay * * * [the entire amount shown to be due on the return], he

wouldn’t have paid any of it.”    Although no doubt apparent to

her, logic on the point has been lost on us.

     According to respondent, at the time petitioner signed each

return, she knew, or should have known that the tax shown due on

each return would not be paid by her former spouse.    Respondent

supports this position by pointing out that at the time she

signed the returns:   (1) Petitioner and her former spouse jointly

owed Federal income taxes for 1988, 1989, 1990, 1991, 1992, 1993,

and 1994; and (2) petitioner was aware that her former spouse
                               - 8 -

routinely did not satisfy his Federal income tax obligations with

respect to income earned from his business.

     The record demonstrates that at the time petitioner signed

the 1996 and 2001 returns she was aware of the outstanding

Federal income tax liabilities for the above-referenced set of

years.   She was likewise aware that her former spouse was

routinely and repeatedly derelict in satisfying his Federal

income tax obligations.   Furthermore, as she noted in the

questionnaire, at the time she signed the returns financial

problems made it difficult to pay monthly expenses.   As we view

the matter, if she was not aware that the unpaid liabilities

shown on the 1996 and 2001 returns would not be paid by her

former spouse, she surely should have been.   It follows that

petitioner is not entitled to relief under Rev. Proc. 2003-61,

sec. 4.02.

     If, as here, a spouse fails to qualify under Rev. Proc.

2003-61, sec. 4.02, then relief may be granted under Rev. Proc.

2003-61, sec. 4.03, 2003-2 C.B. at 298.    A nonexhaustive list of

factors routinely considered when determining whether to grant

equitable relief under section 6015(f) is contained in Rev. Proc.

2003-61, sec. 4.03.   Those factors are:   (1) Marital status; (2)

economic hardship; (3) whether the spouse seeking relief knew or

had reason to know that the other spouse would not pay the income

tax liability; (4) the other spouse’s legal obligation to pay the
                                    - 9 -

tax liability; (5) whether the spouse seeking relief obtained a

significant benefit from the nonpayment of the tax liability; and

(6) whether the spouse seeking relief complied with Federal

income tax laws.        Other factors that may be considered, but will

not weigh against relief if not present, are:       (1) Whether the

nonrequesting spouse abused the requesting spouse; and (2)

whether the requesting spouse was in poor mental or physical

health at the time he or she signed the tax return or at the time

he or she requested relief.        Id. sec. 4.03(2)(b), 2003-2 C.B. at

299.

       No single factor is determinative; all factors are to be

considered and weighed appropriately, Haigh v. Commissioner, T.C.

Memo. 2009-140, and we do so in the following paragraphs.

1.     Marital Status

        Under Rev. Proc. 2003-61, sec. 4.03(2)(a)(i), 2003-2 C.B. at

298, consideration is given to whether the spouse seeking relief

is separated or divorced from his or her spouse.       Petitioner and

her former spouse separated in January 2003 and divorced in April

2004.     Petitioner filed her claim for relief on March 29, 2004.

The marital status factor favors relief.

2.     Economic Hardship

        Under Rev. Proc. 2003-61, sec. 4.03(2)(a)(ii), 2003-2 C.B.

at 298, consideration is given to whether the spouse seeking

relief would be unable to pay reasonable basic living expenses if
                               - 10 -

relief is not granted.    Butner v. Commissioner, T.C. Memo. 2007-

136.

       As set forth in section 301.6343-1(b)(4), Proced. & Admin.

Regs., the following nonexclusive factors may be considered in

determining whether the spouse seeking relief can pay reasonable

basic living expenses:    (1) The age, employment status and

history, ability to earn, and number of dependents of the spouse

seeking relief; (2) an amount reasonably necessary for food,

clothing, housing, medical expenses, transportation, current tax

payments, and expenses necessary to the production of income for

the spouse seeking relief; (3) the cost of living in the

geographic area of the spouse seeking relief; (4) the amount of

property available to satisfy the expenses of the spouse seeking

relief; (5) any extraordinary circumstances (e.g., special

education expenses, a medical catastrophe, or a natural

disaster); and (6) any other factor bearing on economic hardship.

       The most recent financial information available as of the

date of trial shows that petitioner’s monthly income exceeds her

monthly expenses.    Furthermore, the sale of the marital residence

netted her $46,588.24, a portion of which could be used to

satisfy her 1996 and 2001 income tax liabilities, and the

discharges granted in the above-referenced bankruptcy proceeding

eliminated many of her other financial obligations.    Denying

petitioner’s request for relief from her 1996 and 2001 income tax
                                - 11 -

liabilities will not intrude upon her ability to satisfy her

reasonable basic living expenses.     This factor weighs against

relief.

3.   Knowledge or Reason To Know

      Under Rev. Proc. 2003-61, sec. 4.03(2)(a)(iii), 2003-2 C.B.

at 298, consideration is given to whether the spouse seeking

relief knew or had reason to know that the other spouse would not

pay the liability.     As previously discussed, petitioner has

failed to establish that at the times the 1996 and 2001 returns

were signed, she had a reasonable belief that the taxes would be

paid.     This factor weighs against relief.

4.   Legal Obligation of Other Spouse

      Under Rev. Proc. 2003-61, sec. 4.03(2)(a)(iv), 2003-2 C.B.

at 298, consideration is given to whether the other spouse has a

legal obligation to pay the outstanding income tax liability

pursuant to a divorce decree or an agreement.     The judgment is

silent with regard to whether petitioner or her former spouse is

responsible for the 1996 and 2001 income tax liabilities.

Accordingly, this factor is neutral.     See Washington v.

Commissioner, 

, 148-149 (2003).

5.   Significant Benefit

     Under Rev. Proc. 2003-61, sec. 4.03(2)(a)(v), 2003-2 C.B. at

299, consideration is given to whether the spouse seeking relief

significantly benefited (beyond normal support) from the unpaid
                                - 12 -

income tax liability.     If so, the significant benefit factor

weighs against granting equitable relief.        Petitioner received no

significant benefit from the unpaid tax, other than normal

support.     Therefore, this factor weighs in favor of relief.    See

Magee v. Commissioner, T.C. Memo. 2005-263 (lack of significant

benefit weighs in favor of relief under Rev. Proc. 2003-61,

supra); cf. Butner v. Commissioner, supra (lack of significant

benefit weighed in favor of relief under former section 6013(e)

notwithstanding that Rev. Proc. 2000-15, supra, states that it is

neutral).

6.   Petitioner’s Compliance With Federal Income Tax Laws

      In the tax years following the years to which the request

for relief relates petitioner was in compliance with her Federal

income tax obligations.     See Rev. Proc. 2003-61, sec.

4.03(2)(a)(vi), 2003-2 C.B. at 299.      This factor favors relief.

7.   Abuse

      Under Rev. Proc. 2003-61, sec. 4.03(2)(b)(i), consideration

is given to whether the nonrequesting spouse abused the

requesting spouse.     The presence of abuse is a factor favoring

relief, and a history of abuse may mitigate the requesting

spouse’s knowledge or reason to know.      Id.    Abuse is not limited

to physical abuse and may include verbal and mental abuse.

Nihiser v. Commissioner, T.C. Memo. 2008-135.
                                 - 13 -

      Petitioner’s evidence on this point consists of her

statement made on the questionnaire that she had been a victim of

“verbal abuse”.   Without more information we are not persuaded

that the “verbal abuse” was the type of abuse referenced in Rev.

Proc. 2003-61, sec. 4.03(2)(b)(i).        See Collier v. Commissioner,

T.C. Memo. 2002-144.   This factor is neutral.

8.   Mental or Physical Health

      Petitioner has not alleged, nor does the record show, that

her mental or physical health was poor at the relevant times.

Therefore, this factor is neutral.        See Rev. Proc. 2003-61, sec.

4.03(2)(b)(ii).

      As noted, no factor is determinative, and here, as in other

section 6015(f) cases, some factors favor relief, some factors do

not, and others are neutral.     Application of the knowledge and

hardship factors strongly suggests that petitioner’s request for

section 6015(f) relief should be denied; all relevant factors

considered together do not suggest otherwise.       Petitioner has

failed to establish that it would be inequitable to hold her

liable for the unpaid portions of her 1996 and 2001 Federal

income tax liabilities.   Respondent’s denial of her request for

such relief is sustained.

      At trial petitioner requested that the Court, in lieu of

granting section 6015(f) relief, at least abate the interest that

has accrued and is accruing on the liabilities here under
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consideration.    In closing we think it appropriate to briefly

comment on her request.

       Ignoring any procedural defects with respect to the timing

of her request and the manner in which it was made, we note that

in cases such as this we are without jurisdiction to consider

it.3   To the extent she is entitled to any such relief, see, e.g.,

sec. 6404, that relief is beyond our reach.

       To reflect the foregoing,


                                        Decision will be entered

                                   for respondent.




       3
      As we have noted in opinions too numerous to cite, the Tax
Court is a court of limited jurisdiction, and we acquire subject
matter jurisdiction only to the extent authorized by Congress.