T.C. M em o . 2 0 2 1 -2 0

UNITED STATES TAX COURT
VIKKI L. ROGERS, 1 Pet i ti o n er, AND BRIAN D. ROGERS, In t erv en o r v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 8 9 3 0-1 7. Fi l edFeb ru ary 2 2 , 2 0 2 1
.

M i ch ael J . Cal ab res e, fo r p et i t i o n er. An drew Y. Bel t er, fo r i n t erv en o r. Geo rg e W . Bezo l dan dM arkJ . M i l l er, fo r res p o n d en t.

M EM ORANDUM FINDINGS OF FACT AND OPINION NEGA, Jud g e: Pu rs u an t t o s ect i o n6 01 5 (e)(1 ), p et i t io n er s eek s rev i ew o f
res p o n d en t’ s d et erm i n at i o n thats h e i s n o ten ti t l edt o rel i ef fro m jo in tan d s ev eral l i ab i l i ty un d er s ect i on 6 01 5 (b ), (c), o r (f) fo r t ax y ears 2 0 1 0 an d2 0 1 1 (y ears at

1 Aft er fi li n g th e p et i t i o n , p et i t i o n er ret u rn edt o h er m ai d en n am e, Tri g g s . Served 02/22/21-2
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[* 2 ] i s su e) wi th res p ectt o the jo i n t Fed eral i n co m e t ax retu rn s th at s he fi l edwi th i n t erv en o r, h er fo rm er s p o u se. 2 FINDINGS OF FACT So m e o f t h e fact s h av e b een s ti p u lat ed an dare s o fo u n d. Th e s t ip u l at i o n o f fact s an dth e at t ach ed ex h i b i ts are i n co rp o rat ed h erei nb y th i s referen ce. Bo th p et i t i o n er an di n t erv en o r i n d iv i du al l y res id edi n W i s co ns i n wh en th e p et i t i o nwas fi led
. Pet i t i o ner an d i n t erv en o r m arri edi n1 9 93 . Th ey jo i n t l y o wn edCap i t al Ci ty Ten t Ren t al , LLC (Cap i tal Ci ty Ten t ), a W i sco n s in l i m i t edl i ab i l i ty co m p an y th at
ren t edan ds etup t en t s , t ab l es , an dch ai rs . 3 Pet i ti o n er i s a h ig h s ch o o l g radu at e. Becau s e s h e h as s o m e b an k i n g edu cat i on an dh adwo rk edata b an k fo r a few y ears , p et i t i o n er was p ri m ari l y res p on s i b l e fo r m ai n t ai ni n g Cap i t al Ci ty Ten t ’ s b o o k s an dreco rd s , h i ri n g a p ay ro l l co m pan y , track i n g b i l li n g , m ak i n g l o an p aym en t s, an dm ak i n g cred i tcardp aym en ts . Pet i t i o n er al s o h ads i g natu re

2 Un l es s o th erwi s e i nd i cat ed , al l s ect i o nreferen ces are t o th e In t ern al Rev enu e Co de i n effect atal l rel ev an tt i m es , an dal l Ru l e referen ces are t o th e Tax Co u rtRu l es o f Pract i ce an dPro cedu re. Al l m o n et ary am o u n ts are ro u n d edt o th e n eares td o l l ar.

3 In M arch 2 0 00 i n t erv en o r an dh i s fat h er, wh o s t i l l o wn eda l arg e p o rt i o n o f Cap it al Ci ty

Ten t atthe t i m e, h adi tel ectt o b e t reat edas an S co rp o rat i o n . On No v em b er 1 , 2 0 0 0 , i n t erv en o r’ s fat h er t ran s ferred h is i n teres t i n Cap i t al Ci ty Ten t t o p et i ti o n er an di n t erv en o r.-3
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[* 3 ] au th o ri ty

o n Cap i t al Ci ty

Ten t’ s b an kacco u n t , p rep aredan ds i gn ed s al es t ax retu rn s an du n em

pl o ym en tt ax co nt ri b u t i o nfo rm s o nb eh al f o f th e b us i n es s , an d
wo rk edwi th an acco u n t an t t o prep are Cap it al Ci ty Ten t ’ s t ax retu rn s . In t erv en o r
was res p on s ib l e fo r: (1 ) m an ag i n g em p l o y ees , (2 ) m ai n t ai n i ng cu s t o m er rel at i o n s , (3 ) an s weri n g p h o n es , (4 ) accep t i n g o rd ers , (5 ) p rep ari n g an ds ub m it t i n g jo b b i d s , (6 ) m ak in g n eed edrep ai rs , an d(7 ) as s i s t i n g wi th b o ok k eep i n g . Ad d it i on al l y , p et i t i o n er s o l el y o wn ed two o th er b u si n es s es : (1 ) Cap i t al Ci ty Ren tal s , In c. (Cap i t al Ci ty Ren t al s ), wh i ch ren t ed b ou n ce h o u s es an dju m p i n g
cas t l es , an d(2 ) Twi l i g h t Po n y Ri d es , wh i ch o ffered p o n y ri d es . In t erv en o r
o ccas i o n al l y

p ro v i dedth e m an u al l ab or fo r th es e b u s i n es s es . Pet it i on er al s o
en g ag edCap i t al Ci ty

Ten t ’ s acco u n tan tt o p rep are t ax retu rn s fo r Cap i tal Ci ty Ren tal s . Fo r t h e y ears ati s su e p et i t i o n er an di n t erv en o r u n ti m el y fi l edjo in tFo rm s 1 0 4 0 , U.S. In d i v i du al In co m e Tax Retu rn . Onth ei r 2 0 1 0 th ey rep o rt edth atn o t ax
was due an dreq u es t eda refu n do f $ 4 ,5 47 . Onth ei r 2 0 11 retu rn th ey rep o rt eda t ax l i ab i l i ty

o f $ 5 ,6 08 an dreq u es t eda refu n do f $ 7,3 24 . Res p on d en tau d i t edth es e t ax return s an d d et erm i n edd efi ci en ci es , fi n d i n g th atp et i t i o n er an di nt erv en o r h ad
u n d ers t at edth ei r t ax l i ab i l i t i es b ecau s e o f d i s al l o wedd edu ct i o n s as s o ci at edwi th Cap it al Ci ty

Ten t an dcl ai m edo nSch edu l es E, Sup pl em en t al In co m e an dLo s s .-4
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[* 4 ] OnJ an u ary

7 , 2 0 1 4 , p et i t i o n er an d i nt erv en o r s i g n ed Fo rm s 4 5 4 9 , In co m e Tax Ex am i n at io n Ch an g es , co n s en t i n g t o th e as s es sm en tan d co l lect i o no f th e d efi ci en cy

am o u n t s , p l u s p en al t i es an d i n t eres t , t o t al i n g $ 1 1 ,6 0 9 an d$ 2 1 , 6 7 2 fo r t ax y ears 2 0 1 0 an d2 01 1 , res p ect i v el y . Nei th er p et i t i o n er n or i nt erv en o r h as p ai d th e as s es s edt ax , p en al ti es , an di n t eres t fo r t he y ears ati s s u e. OnJ u ly 1 , 2 0 1 4, the Ci rcu i tCo u rt , Bran ch 8 , i n Dan e Co u n ty , W i s co n s i n , i s su edp et i t i o n er an di n t erv en or a d ecree o f d i v o rce. On Au g u s t2 3 , 2 0 1 4 , th e
co u rten t ereda ju d gm en to f d i v o rce i n co rp o rat in g a M ari t al Set t l em en tAg reem en t (ag reem en t ) b et ween p et i t i on er an d i n t erv en o r. 4 Pu rs u an tt o th e ag reem en t, i n t erv en o r was award ed th e “ b u s i n es s o r p ro fes s i o n al i n t eres t s ” i nCap i t al Ci ty Ten t. Th e ag reem en ts t i p u lat ed , h o wev er, t hatp et i t i o n er an di nt erv en o r rem ai n ed jo i n t ly l i ab l e fo r t h e as s es s edt ax l i ab i l i t i es , p en al t i es , an di n t eres tfo r t h e y ears at i s su e. OnJ u ly

3 1 , 2 0 15 , res p o nd en trecei v edfro m p et it i o n er a Fo rm

8 8 5 7, Req ues t fo r In n o cen tSp o u se Rel i ef, s eek in g rel ief fo r t ax y ears 2 0 0 6 th ro u g h 2 0 1 1 . Onth e Fo rm

8 8 5 7, p et i t i o n er rep o rt ed a t o t al m o nt hl y i n co m e o f $ 1,2 9 7
an d t o tal m o n thl y

ex p en s es o f $ 2 ,2 03 . Pet i ti o n er s t at edth ats h e was n o ti nv o l v ed

4 Pet i t i on er d i dn o ts i g n th e ag reem en t ev en th o u g h s h e was g i v en s u ffi ci en t t i m e t o d o s o . Th e ju d g e p res i di n g o v er t h e d i v o rce p ro ceed i n g s n ev ert h el es s i n co rp o rat edthe ag reem en ti nt o th e ju d g m en to f d i v o rce wi th o u t h er s i g n atu re.-5
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[* 5 ] i n h an d l in g the h o u s eh o l dfi n an ces , was n o ti n v ol v ed i n p rep ari n g h er an d i n t erv en o r’ s jo i n tt ax retu rn s fo r t h e y ears ati s s u e, an d h adn o kn o wl ed ge t h at
an yth i n g was i n co rrect o r m i s s i n g wh en th e ret u rn s were fi l ed
. Pet i t i o n er fu rt h er rep res en t edo n the Fo rm

8 8 57 th atn ei th er s h e n o r i n terv en o r i ncu rredan y l arg e
ex p en s es , s u ch as tri p s , h om e i m p ro v em en t s , o r p ri v at e s ch o o l i n g , o r m ad e an y l arg e p u rch as es , s u ch as au to m o b il es , ap p l ian ces , o r jewel ry , du ri n g t h e y ears at i s su e. Pet i t i o n er as sert ed th ats h e was a v i ct i m o f s p o u sal ab u s e; h o wev er, s h e
n o t edth atl aw en fo rcem en twas n ev er cal l ed , i n t erv en o r was n ev er arres tedo r ch arg ed , an ds h e n ev er s o u gh th el p fro m a l o cal d o m es ti c v i o l en ce p ro g ram . Pet i t io n er al s o av erred th at s he was n o ti np o o r m en t al o r p h y s ical h eal th wh en s h e
an d i n terv en o r jo i n t l y

fi ledth ei r Fed eral i n co m e t ax retu rn s fo r t ax y ears 2 00 6 th ro u g h 2 0 1 1 o r atth e t i m e t hats h e fi l edth e Fo rm 8 8 5 7. OnAu gu s t1 8 , 2 0 1 6, res p o n d en ti s s u eda n o t i ce o f p rel im i n ary d et erm i n at i o n d en y in g p et i t i o ner’ s req u es t fo r i n no cen ts p o u s e rel i ef fo r t h e y ears ati ss u e un d er s ect i o n 6 0 1 5 (b ), (c), an d(f). 5 OnSep t em b er 1 9, 2 0 16 , p et i t i o n er t i m el y sub m i t t edFo rm

1 2 5 09 , St at em en to f Di s ag reem en t , requ es ti n g
reco n s i d erat i on . InFeb ru ary 2 0 1 7 p et i t i o n er cam e i n t o co m p l i an ce wi th h er t h en 5 Res p o n d en tm ad e a p rel i m i n ary d et erm in at i o no n ly

fo r t ax y ears 2 0 1 0 an d 2 0 1 1 b ecau s e p et i t i o n er h adn o t ax l i ab il i ti es fo r t ax y ears 2 0 0 6 th ro u g h 2 0 0 9
.-6
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[* 6 ] cu rren tt ax return fi l i ng o bl i g at i o nb y fi l i n g h er Fed eral i n co m e t ax retu rn fo r t ax y ear 2 0 1 6 , an d s h e al s o fi l edh er t ax retu rn s fo r t ax y ears 2 0 1 2 th ro u gh 2 0 1 5
. OnFeb ru ary 1 5 , 2 0 1 7, i nt erv en o r s ub m i t t eda p ro t es t o f p et i t io n er’ s ap p eal , o b ject i ng t o th e req u es t edrel ief. Th e In t ern al Rev en u e Serv i ce (IRS) Offi ce o f Ap p eal s (Ap p eal s Offi ce) i s s u edt o p et i t i o n er a fi nal d et erm i n at i o n o nM arch 2 3 , 2 0 1 7 , d en y i n g h er req u es tfo r rel i ef fro m jo i n t an d s ev eral l i ab il i ty u n d er s ect i o n 6 0 1 5 (b ), (c), an d(f) fo r t h e y ears ati s s u e. OnAp ri l 2 4 , 2 0 1 7 , p et i t i o n er t i m el y fi led a p et i ti o n t o th i s Co u rtap p eal i n g th e d et erm i n at i on , an do nM ay 3 0 , 2 0 1 7 , i n t erv en o r fi l eda n o ti ce o f i n t erv en t i o n . Tri al was h el d o nM arch 2 6 , 2 0 1 9 , i n M i l w au k ee, W i s co n s in
. Th e Co u rtfi n d s , i n ter al i a, t h atth e t ri al reco rdd o es n o ts up po rtp et i t i o n er’ s cl ai m s thats h e was n o ti n v o lv edi n h an d l in g th e h ou s eh o ld ex p en s es o r i n p rep ari n g h er an di n t erv en o r’ s jo i n tt ax retu rn s fo r th e y ears ati s s u e. W e al s o fi nd a l acko f s up p o rti n th e reco rdfo r p et i t i o n er’ s cl ai m o f s po u s al ab u se. Th e Co u rt d o es , h o wev er, accep tas tru e t h atp et it i on er d i d n otrecei v e a l ev el o f s i g n i fi can t b en efi tth atwo u l du n d erm i n e h er cl ai m fo r rel i ef u n der s ect io n6 0 1 5 (f).-7
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[* 7 ] OPINION Gen eral ly , m arri ed t ax p ay ers m ay el ectt o fi l e jo i n tFed eral i n co m e t ax retu rn s . Sec. 6 0 1 3
. Sect i o n 6 0 1 3 (d )(3 ) p ro v i d es th at , i f a jo in tretu rn i s fi l ed , each
s p o u se i s jo i n t l y

an ds ev eral l y

l i ab l e fo r t h e en t ire t ax due fo r t h aty ear. A req u es t i ng s p o u s e m ay

b e rel i ev edfro m

jo i n t an d s ev eral l iab i l i ty u n d er s ect i o n 6 0 1 5 i f cert ai n co nd i t i o ns are m et . Sect i on 6 0 1 5 p ro v i d es a req u es t i n g s p o u s e wi th th ree al t ern at i v es fo r rel i ef fro m jo in t an ds ev eral l i ab i l i ty : (1 ) fu l l o r p art i al rel i ef u n der s ub s ect i o n (b ), (2 ) p ro p o rt i o n at e rel i ef u n d er s ubs ect i on (c), o r (3 ) i f rel i ef i s n o t av ai l ab l e u n d er s ubs ect i o n(b ) o r (c), equ i t ab l e rel i ef u n der s ub s ect i o n (f). Ex cep tas o th erwi s e p ro v i dedi ns ect i o n6 01 5 , p et it i on er, as th e t ax p ay er req u es t i ng rel i ef, b ears th e b u rd en o f p ro o f. 6 See Ru l e 1 4 2 (a); Al t v . Co m m i s s i o n er, 1 1 9 T.C. 3 0 6 , 3 1 1 (2 0 0 2), aff’ d, 1 0 1 F. Ap p ’ x 3 4 (6 th Ci r. 2 0 0 4 ).

6 Th e p et it i o n i n t hi s cas e was fi l ed , an d the t ri al was h el d , b efo re t h e en act m en to f s ec. 6 0 1 5 (e)(7 ). See Su th erl an d v . Co m m i s s io n er, 1 5 5 T.C. _

_ , _

_ (s l i p o p. at1 7 ) (Sep t . 8 , 2 0 2 0) (co ncl u d i n g th ats ub s ec. (e)(7 ) b ecam e effect i v e o n J u l y 1 , 2 0 1 9 , th e d ay o f t he Tax p ay er Fi rs tAct ’ s en act m en t ). See g en eral l y Tax pay er Fi rs tAct , Pub . L. No . 1 1 6 -2 5 , 1 3 3 St at . 9 8 1 (2 0 1 9 ). Sec. 6 0 1 5(e)(7 ) ch an gedo u r s co p e o f rev i ew fro m d e n o v o t o th e ad m i ni s trat i v e reco rd , wi th l i m i ted ex cep t i o n s. Ho wev er, i td o es n o tap p ly t o p et i t io n s fi l edb efo re i t s en act m en t . See Su th erl an d v . Co m m i s si o n er, 1 5 5 T.C. at_

_ (s l i p o p . at1 8 ). Acco rd in g ly , o u r s t an d ardo f rev i ew i nth i s cas e rem ai n s d e n o v o . Ro b in s o nv . Co m m i s s i o n er, T.C. M em o . 2 0 2 0 -1 3 4 , at* 1 8 n .8 (ci t i n g Pu ll i n s v . Co m m i s s i o n er, 1 3 6 T.C. 4 3 2 , 4 3 8 -4 39 (2 0 1 1)).-8
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[* 8 ] I. Sect io n 6 0 1 5 (b ) Sect io n 6 0 1 5 (b )(1 ) p ro v i d es th ata req u es t i n g s p o us e s h al l b e rel iev edo f jo i n t an ds ev eral l i ab il i ty fo r a p art i cu l ar y ear i f each o f t h e fo l l o wi ng req u i rem en t s i s m et : (1 ) a jo i n tretu rn was fi l edfo r t h e y ear i ni s s u e; (2 ) t h e ret u rn
co n tai n s an u n d ers t at em en tat tri b u t ab l e t o an erro n eo u s i t em o f t h e n o n req u es t i n g
s p o u se; (3 ) t h e req u es t i n g s p o u s e es t ab l is h es th at , i ns i g n i n g t h e ret u rn , h e o r s h e d i dn o t kn o w an dh adn o reas o n t o kn o wo f t he u n d ers tat em en t ; (4 ) i ti s i n equ i t ab l e t o h o l d th e req u es t in g s p o u se l iab l e fo r t h e d efi ci en cy at tri b u t ab l e t o th e u n ders t at em en t ; an d(5 ) t h e requ es t in g s p o u s e’ s cl ai m fo r rel i ef i s t im el y . Fai l u re t o m eeto n e o f t h es e req u i rem en t s p recl u d es rel ief u n d er s ect io n 6 01 5 (b ). Al tv . Co m

m i s si o ner, 1 1 9 T.C. at3 1 3
. Pet i t i o ner d o es n o ts at i s fy the t h i rdco n d i t i o nu n d er s ect io n6 01 5 (b ). To qu al i fy fo r s ect i o n 6 0 1 5 (b ) rel i ef, a req ues t i n g s p o u s e can n o th av e h adactual kn o wl ed g e an d a reas o n t o kn o w o f t h e u n d ers t at em en t atth e t i m e s h e s i g n edth e jo i n t retu rn . Sec. 6 0 1 5 (b )(1 )(C). W i th res pect t o th e kn owl ed ge req u i rem en t
u n d er s ect i o n 6 0 1 5 (b )(1 )(C), h o wev er, t h e U.S. Co urto f Ap p eal s fo r t he Sev en th Ci rcu i t , t o wh i ch th i s cas e i s ap p eal ab l e, h as ad o p t ed a m o re l en i en t ap p ro ach --t h e

“ reas o n t o kn o w” s t an dard --i n cas es wh ere, as h ere, t h e u n d ers t at em en tres u l t s fro m i m p ro p er d edu ct io ns (v ers u s cas es i n v o l v i n g u n rep o rt edi n co m e). Res s er v .-9
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[* 9 ] Co m m i s s i o n er, 7 4 F.3 d1 5 2 8 , 1 5 3 6 (7 th Ci r. 1 9 9 6 ) (qu o t i n g Pri ce v . Co m m i s s i o n er, 8 8 7 F.2 d9 5 9 , 9 6 3 (9 th Ci r. 1 9 8 9 )), rev ’ g an d rem an di n g T.C. M em o. 1 9 9 4 -2 4 1 ; Ph em i s t er v . Co m m is s i o n er, T.C. M em o . 2 0 0 9-2 0 1 , s l i p o p . at3 4 . Acco rd in g t o t h e Co u rto f Ap p eal s , th e req u es t in g s p o u s e m u s tes t ab l i s h th ats h e d i d n o t kn o w o r h av e reas o nt o kn o wth atthe erro n eo u s d edu ct io nwo u l d g i v e ri se t o an u nd ers t at em en t . Res s er v . Co m m i ss i o n er, 7 4 F.3 dat1 5 3 6
. Th e Co u rtap p li es a reas o n ab l y p ru d en t p ers o ns t an d ardt o ev al u at e t h e req u es t i ng s p o u s e’ s kn o wl ed g e i ncas es i n vo l v i n g b o th erro n eo u s d edu ct i o n s an d
u n rep o rt edi n co m e. See Ho p k i n s v . Co m m i s s io n er, 1 2 1 T.C. 7 3, 7 7 -7 8 (2 0 0 3 ) (i nv o l v i n g i m

p ro p er d edu ct i o n s ); Bu t l er v . Co m m i s s i on er, 1 1 4 T.C. 2 7 6 , 2 8 3 -2 8 4 (2 0 0 0) (i n v o l v i n g u n rep o rt edi n co m e), ab ro g at edb y Po rt er v . Co m m is s i o n er, 1 3 2 T.C. 2 0 3 (2 0 0 9 ). A s p o u s e knew o r h adreas o n t o kn o w o f an u nd ers t at em en ti f a
reas on ab l y

p ru d en tp ers o n in h er p o s i t i o n wo u ldh av e kn o wn t h atth e ret urn
co n tai n edan u n d ers t at em en t wh en s h e s i g nedi t . Res s er v . Co m m i s s io n er, 7 4 F.3 d at1 5 3 5-1 5 3 6 ; Ho p ki n s v . Co m m i ss i o n er, 1 21 T.C. at7 7 . Th e reas o n ab l y p ru d en t p ers o n s t an d ardal s o i m

p o s es a dut y

o f i nqu i ry

o nth e req u es t i n g s p o u s e. Res s er v . Co m m i s s i o n er, 7 4 F.3 dat1 5 4 1; Ho p ki n s v . Co m m i s s i o ner, 1 2 1 T.C. at7 7 -8 0 ; Bu t ler v . Co m

m i s s i o n er, 1 1 4 T.C. at2 8 3 -2 8 4
.-1 0
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[* 1 0 ] Fo r u n d ers t at em en t s res ul t i n g fro m i m p ro p er d edu ct io n s , th e req u es t i n g
s p o u se h adreas o n t o kno w i f s h e h ads u ffi ci en tkn o wl ed g e o f t h e fact s u n d erl y i n g th e d edu ct i o n s s u ch th ata reas o n ab l y p ru d en tp ers o ni nh er p o s it i on wo ul dh av e
s eri ou s l y qu es ti o n ed wh et h er t he d edu ct i o ns were erro n eo u s . Res s er v . Co m m i s s i o n er, 7 4 F.3 dat1 5 3 6 (qu o t in g St ev en s v . Co m m is si o n er, 8 7 2 F.2 d1 4 9 9, 1 5 0 5 (1 1 th Ci r. 1 9 8 9 ), aff’ g T.C. M em o . 1 9 8 8 -6 3 ). In ap p l y i n g th e reas o n ab l y p ru d en tp ers o n s t an d ard , we co n s i d er fo ur fact o rs : (1 ) t he s p o u s e’ s l ev el o f edu cat i o n , (2 ) h er i nv o l v em en ti n th e fi nan ci al an db u s i n es s act i v i t i es o f t he fam i l y , (3 ) t h e p res en ce o f u n u s u al o r l av i s h ex p en s es b ey o n dth e fam i l y ’ s n o rm , an d (4 ) th e n o n reques t i n g s p o u s e’ s ev as i v en es s o r d ecei t fu l n es s ab o u t th e fam i l y ’ s fi nan ces . Res s er v . Co m

m i s si o n er, 7 4 F.3 dat1 5 3 6
. No s i n g l e fact o r i s
co n tro l l in g . Ro g ers v . Co m m i s s i o n er, T.C. M em o . 2 01 8 -5 3 , at* 1 03
. Pet i t i o ner arg u es th ats h e d i dn otkn ow o r h av e reas o n t o kn ow o f t h e
u n d ers t at edt ax wh en s h e s i g n edan dfi l ed th e jo i n tretu rn . Sh e cl ai m s t o b e an
u n s o ph i s ti cat ed t ax p ay er wh o “ can n o tb e s ai dt o h av e u n ders t o o dth e ex t en tt o wh i ch recei p ts , ex p en s es , d ep reci at i o n , cap i t al i t em s , earn i n g s an dp ro fi t s , d eem ed
o r act ual d iv i d en dd i st ri b u ti o ns , an dth e p ro p er treat m en t o f Cap i t al Ci ty Ten t
* * * res ul t edi n t ax d efi ci en ci es fo r t h e y ears ” ati ss u e. Sh e as s ert s fu rt h er t h at
s h e d idn o t m ean i n g fu l l y

p art i ci p at e i nCap i tal Ci ty Ten t “ ot h er t han t o p ro v i d e-1 1
-

[* 1 1 ] s o m e b o o kk eep i n g an do ffi ce wo rk .” W e fi ndh er cl ai m s n o t cred i b l e. See To k ars ki v . Co m

m i s s i o n er, 8 7 T.C. 7 4 , 7 7 (1 9 86 ) (fi n d i n g th e Co u rt i s n o t req u i redt o accep t u n co rro b o rat edo r s el f-s erv i n g t es t i m on y as rel i ab l e an dtru e);
s ee al so Ho p k in s v . Co m

m i s s i o n er, 1 21 T.C. at7 8 n .1 1 (“ Ani n d i v i dual can n o t rel y s o l el y o n i g no ran ce o f t h e at t en d an t t ax o r l eg al co ns equen ces o f ani t em g i v i n g ri s e t o a d efi ci en cy t o s at i s fy h i s o r h er b u rd en u nd er s ec. 6 0 1 5 (b )(1 )(C).”). Pet i t i o ner, a h i g h s ch o o l g radu at e, t es t i fi edthats h e h ad“ a l i t tl e b i t o f b an ki n g edu cat i o n ”, i n d icat i n g t h at s he h ads o m e fam i l i ari ty wi th b o o kk eep i n g . In t erv en o r ad d eddu ri n g tri al th atp et i ti o n er h ad wo rk edata b an kfo r a few y ears . W i th res p ectt o h er ro l e i n Cap i t al Ci ty Ten tfo r t h e y ears ati s s ue, p et i t i o n er
m ai n t ai n edth e b u s i n es s ’ b o o k s an dreco rd s , p rep aredan d s i g n eds al es t ax retu rn s
an d u n em p l o ym en tt ax co n tri b u t i o nfo rm s o ni t s b eh al f, an d wo rk edwi th an
acco u n t an tt o p rep are i t s t ax retu rn s . M o reo v er, n o th i n g i nth e reco rdi n d i cat es th ati n terv en o r t ri edt o d ecei v e o r h i d e an yth in g fro m p et i t i o n er. 7 Onthe b as i s o f th es e fact o rs , we fi n dth atp et i t i o n er kn ew o r h adreas on t o kn o w o f t h e
u n d ers t at em en t s o f t ax fo r t h e y ears ati ss u e an d , th erefo re, i s n o ten t it l edt o rel i ef fro m jo i ntan ds ev eral l i ab i li ty u n d er s ect i o n6 0 1 5(b ).

7 Res p o n d en td o es n o t co n t en d , n o r d o es th e Co u rtfi n dev i d en ce i nth e reco rd , th atp et i t i on er an d i n t erv en o r al t eredthei r s t an d ardo f l i v i n g as a res u l to f th e u n ders t at em en t s o n th ei r jo i n tt ax retu rn s fo r t he y ears ati s s u e.-1 2
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[* 1 2 ] II. Sect io n 6 0 1 5 (c) Sect io n 6 0 1 5 (c) p erm i t s an i n d i v i du al wh o fi l ed a jo in tretu rn t o el ectt o l i m i t h i s o r h er l i ab i l i ty

t o th e p o rt i o no f t he d efi ci en cy th ati s al l o cab l e t o h i m

o r h er u n der s ect io n 6 0 15 (d ). Sec. 6 0 1 5 (c)(1 ). Un d er s ect i on 6 0 1 5(d ), a p o rt i o no f th e d efi ci en cy

i s al l o cab l e t o th e el ect in g s p o u s e i f th e erro n eo us l y rep ort edi t em s g i v i n g ri s e t o th at p o rt i o n o f t h e d efi ci en cy are al l o cab le t o th e el ect i n g s p o u s e. Sec. 6 0 15 (d )(1 ). Ani t em i s al l o cat edt o th e i n di v idu al s fi l i ng th e jo i n t retu rn “ i n th e s am e m an n er as i two u l dh av e b een al lo cat edi f th e i n d i v idual s h adfi l ed
s ep arat e ret u rn s fo r t he t ax ab l e y ear.” Sec. 6 0 1 5 (d )(3 )(A); s ee s ec. 1 .6 01 5 -3 (d )(2 )(i v ), In co m e Tax Reg s . (ex p l ai n i n g that , i n t h e ev en tth at b o th
s p o u ses o wn edan i n t eres ti n a b u s i n es s , “ an erro neo us d educt i o ni t em i s g en eral l y al l o cat edb et ween th e s p o u s es i n p ro p o rt i o n t o each s p o u s e’ s o wn ers h ip i nt eres ti n th e b u si n es s ”). Th e el ect i o n t o l i m itl i ab i l i ty u n d er s ect i o n6 0 1 5 (c) i s effect i ve o n l y i f t h e req u es t i ng s p o u s e m ad e a jo i n tretu rn fo r t h e t ax ab l e y ear ati s su e. Sec. 6 0 1 5 (c)(1 ). To b e el i g i b l e t o m ak e an el ect i o nu n d er s ect i on 6 0 1 5(c), t h e req u es t i ng s p o u s e m

us th av e ei th er: (1 ) b een l eg al l y s ep arat edo r d i vo rcedfro m th e n o nreq u es ti n g s p o us e atth e t i m e o f th e el ect i o n , s ec. 6 0 1 5 (c)(3 )(A)(i )(I), o r (2 ) n o tb een a m em

ber o f t h e s am e h o u s eh ol das th e n on req u es t i n g s p o us e atan y-1 3
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[* 1 3 ] t i m e du ri n g th e 1 2 -m on th p eri o d en di n g o n th e d at e o f t h e el ect i o n , s ec. 6 0 1 5 (c)(3 )(A)(i )(II). Th e req u es tfo r rel i ef u n d er s ect i on 6 0 1 5(c) m u s tb e m ad e n o l at er t h an tw o y ears aft er t h e IRS b eg an co l l ect i o nact i on s ag ai ns tth e req u es t i n g
s p o u se. Sec. 6 0 15 (c)(3 )(B). If t h e IRS d em o n st rat es b y a p rep o n d eran ce o f t h e ev i d en ce t hatth e req u es t i ng s p o u s e h adactu al kn o wl ed g e, wh en s i g n i n g th e retu rn , o f erro n eo u s i t em s th atare al l o cab l e t o th e n o n req u es t i n g s p o u s e an d g i v e ri s e t o t h e d efi ci en cy (o r p o rt i o n th ereo f), t h enth e requ es t i n g s p o us e i s g en eral l y n o ten ti t l edt o rel i ef
u n d er s ect i o n 6 0 1 5 (c) wi th res p ectt o th atd efi ci en cy (o r p o rt io n th ereo f). 8 Sec. 6 0 1 5 (c)(3 )(C). In cas es i n v o l v i n g erro n eo u s d edu ct io n s , a s p ou s e i s d eem edt o h av e actu al kn o wl ed g e o f an i t em g i v i ng ri s e t o a d efi ci en cy i f s he h as actu al kn o wl ed g e o f t h e fact u al ci rcu m s t an ces th at m ad e th e d edu ct i o n s u n al l o wab l e. Ph em i st er v . Co m

m i s s i o n er, s l ip o p . at4 0 (ci t i ng Ki n g v . Co m m i s s i o ner, 1 1 6 T.C. 1 9 8 , 2 0 4 (2 0 0 1)); s ee s ec. 1 .6 01 5 -3 (c)(2 )(i v ), In co m e Tax Reg s . (“ J o i n t o wn ers h i p

8 Th e kn owl ed g e s t an d ardfo r p u rp o s es o f s ec. 6 0 1 5 (c)(3 )(C) i s “ an actu al an d cl ear awaren es s (as o p p o s edt o reas o nt o kn o w) o f t h e ex i s t en ce o f ani t em wh i ch g i v es ri s e t o t h e d efi ci en cy (o r p ort i on th ereo f).” Arm o u r v . Co m m i s s i o n er, T.C. M em o . 2 01 6 -1 2 9 , at* 1 0 -* 1 1 (quo t i n g Ch es h i re v . Co m m i s s io n er, 1 1 5 T.C. 1 8 3 , 1 9 5 (2 0 0 0), aff’ d , 2 8 2 F.3 d3 26 (5 th Ci r. 2 0 0 2)). Pu td i fferen t l y , th e “ actu al kn o wl ed g e” s t an d ards ub su m es the “ reas o nt o kn o w” s t an d ard
. W i k s el l v . Co m m i s s i o n er, T.C. M em o . 1 9 9 9 -3 2 , s l i p o p . at1 0 , s up p lem en t i ng T.C. M em o . 1 9 9 8 -3 , aff’ d , 2 1 5 F.3 d1 3 3 5 (9 th Ci r. 2 0 0 0).-1 4
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[* 1 4 ] [o f p ro p ert y ] i s a fact o r s up p o rt i ng a fi n d i n g t h atthe req u es ti n g s p o u s e h ad actu al kn o wl ed ge o f an erro n eo u s i t em .”). Actu al kno wl ed g e o f t h e t ax l aws o r l eg al co n s equ en ces o f t h e o p erat i v e fact s i s n o treq u i red . Ho p k i n s v . Co m m i s s i o n er, 1 2 1 T.C. at8 6 (ci t i n g Ki n g v . Co m m i s si o n er, 1 1 6 T.C. at 2 0 4 ). Gi v en p et i t io n er’ s jo i n to wn ers h i p o f Cap i t al Ci ty Ten t , h er i nv o l v em en ti n
m ai n t ai n i n g Cap i t al Ci ty

Ten t ’ s b o o k s an dreco rd s, h er ro l e i n p rep ari n g an d
s i gn i n g t ax -rel at edd o cu m en t s o nb eh al f o f t h e b u s i n es s , an dh er co o p erat i o nwi th
an acco u nt an tt o p rep are Cap i t al Ci ty Ten t ’ s t ax return s , we fi ndth at p et i t io n er h ad actu al kn o wl ed g e o f t h e fact u al ci rcu m st an ces thatm ad e t h e d edu ct i o n s
u n al l o wab le. See Ph em i s t er v . Co m m i s s io n er, s l ip o p . at4 0-4 1 (co n cl ud i n g th at t ax p ay er wi fe “ p o s s es sed actu al kn o wl ed ge o f t he fact u al ci rcu m s t an ces th atm ad e th e d edu ct i o n s an dres u l t i n g l o s s es cl ai m edwi th res pect t o the h o rs e act i v i ty
u n al l o wab le”, s i n ce s h e “ ran th e d ay -t o -d ay o p erat i on s an dwas res p o ns i b l e fo r
m ai n t ai n i n g reco rd s wi th res p ectt o th e act i v it y ”). Th u s , we co n cl u d e t h at
res p o n d en t h as s at i sfi edh i s b u rd en o f p ro v i n g b y a p rep o n deran ce o f t h e ev i d en ce th atp et i t i o n er h adactu al kn o wl ed g e o f t h e i t em s al l o cab l e t o i nt erv en o r th atg av e ri se t o th e u n d ers tat em en ts wh ens h e s i g n edth e ret urn s . Acco rd i n g l y , p et it i o n er i s
n o ten ti t l edt o rel i ef u n d er s ect i o n 6 0 1 5 (c) fo r t h e y ears ati ss u e.-1 5
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[* 1 5 ] III. Sect io n 6 0 1 5 (f) Sect io n 6 0 1 5 (f) p ro v i d es an al t ern at i v e m ean s fo r i n n o cen ts p o u se rel i ef fo r a req u es t i n g s p o us e wh o d o es n o to th erwi se qu al i fy fo r rel i ef u n d er s ect io n 6 0 1 5 (b ) o r (c). Sec. 6 01 5 (f)(1 )(B). Sect i o n6 0 1 5 (f) p ro vi d es rel ief fro m jo i n tan d
s ev eral l iab i l i ty

i f i ti s i n equi t ab l e t o h o ldth e req u es t i n g s p o u s e l i ab l e fo r an y
u np ai dt ax o r an y

d efi ci en cy

(o r an y p o rt i o n thereo f) aft er t ak i n g i n t o acco u n tal l th e fact s an dci rcu m s t an ces o f t h e cas e. Sec. 6 01 5 (f)(1 )(A). Ex cep tas o th erwi s e p ro v id edi n s ect i o n 6 0 1 5, the t ax pay er b ears th e b u rd en o f p ro v i n g thats h e i s
en t i t l edt o s ect i o n 6 0 1 5(f) rel i ef. Ru l e 1 4 2 (a). Rev . Pro c. 2 0 1 3 -3 4 , 2 0 1 3-4 3 I.R.B. 3 9 7 , m o d ify in g an ds up ers ed i n g Rev . Pro c. 2 0 03 -6 1 , 2 0 0 3 -2 C.B. 2 96 , s et s fo rt h a t hree-s tep p ro cedu re fo r ev al uat i n g req ues t s fo r i nn o cen ts p ou s e rel i ef: (1 ) a l i s to f s ev en th res h ol dreq u i rem en t s th ata req u es t i n g s p ou s e m u s t s at i s fy

t o b e el i g i b l e fo r rel i ef, 9 (2 ) a th ree-p artt es tfo r a s tream li nedd et erm i n at i o nt o g ran t rel i ef, an d(3 ) i f t h e t ax p ay er i s n o ten t i t l edt o a s tream l i nedd et erm i n at i o n , a

9 Th e s ev en th res h o l dreq u i rem en t s are: (1 ) t h e p art i es fi l eda jo i n t retu rn , (2 ) rel i ef i s n o t o th erwi se av ai l ab l e u nd er s ec. 6 0 1 5 , (3 ) t h e cl ai m fo r rel i ef i s t i m el y , (4 ) n o as s et s were t ran s ferred b et ween th e s po u s es as p arto f a frau du l en t s ch em e, (5 ) t h e n o nreq u es t in g s p o u se d idn o t tran s fer d i s qual i fi edas s et s t o th e req u es t i ng s p o u s e, (6 ) t h e req u es t i n g s p ou s e d idn o t kn o wi n g ly p art i ci p at e i nth e fi li n g o f a frau du l en tretu rn , an d(7 ) ab s en tcert ai nex cep t i on s , th e i n co m e t ax l i ab i l i ty is at tri b u t ab l e (i n fu ll o r i np art ) t o an i t em o f th e n on req u es t i ng s p o u s e o r an u n d erp aym en t res u lt i ng fro m the n o n req u es t i n g s p o u s e’ s i n co m e. Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 1 , 2 0 1 3 -4 3 I.R.B. 3 9 7 , 3 9 9
.-1 6
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[* 1 6 ] n o n ex cl us i v e l i s to f fact o rs thatth e IRS wi l l co n s id er i nd et erm i n i n g wh et h er i two u l db e i n equ i t ab l e t o h o l dth e s p o u s e jo i n t ly an ds ev eral ly

l i ab l e. 1 0 Res p o n d en tco n ced es th atp et i t i o ner h as m et th e t hres h o ldreq u i rem en t s ; th u s , we tu rn t o wh eth er s h e qu al i fi es fo r a s tream l i n edd et erm i nat i o n . A. St ream l i n edDet erm i n at i on Wh en th e t hres h o ldco n di t i o n s h av e b een m et , Rev . Pro c. 2 0 13 -3 4 , s ec. 4 .0 2, 2 0 1 3 -4 3 I.R.B. at4 0 0 , al l o ws a req u es t i n g s p ou s e t o qu al i fy fo r a
s tream l i n edd et erm i n at i o n o f rel i ef u n d er s ect i o n6 0 15 (f) i f al l o f t h e fo l l o wi n g
co n di t i o n s are m et : (1 ) t h e req u es ti n g s po u s e i s n o l o ng er m arri edt o th e
n o n req u es ti n g s p ou s e, (2 ) t h e requ es t i n g s p o u s e wi ll s u ffer eco n o m i c h ard sh i p i f rel i ef i s n o t g ran t ed , an d(3 ) t h e requ es t i n g s p ou s e d idn o tkn o w o r h av e reas o n t o kn o w th atth ere was an u n d ers t at em en to r d efi ci en cy o nth e jo i n ti n co m e t ax retu rn . As th e Co u rtfo u n dab o v e, p et i t i o ner k new o r h adreas o n t o kn ow o f t h e i t em s g i v i n g ri s e t o th e u nd ers t at em en twh en s he jo i n tl y fi l edth e t ax retu rn s fo r th e y ears ati s s u e. See i d . s ec. 4 .0 2 (3 )(a), 2 01 3 -4 3 I.R.B. at4 0 0 ; s ee al s o i d. s ec. 4 .0 3(2 )(c)(i )(A), 2 0 1 3 -4 3 I.R.B. at4 0 1
.

1 0 Rev
. Pro c. 2 0 1 3 -3 4 , s up ra, ap p l i es t o al l req u es t s fi l edo n o r aft er Sep tem b er 1 6 , 2 0 1 3, an dreq u es t s p en d i n g i n an y Fed eral co u rto no r aft er Sep tem b er 1 6 , 2 0 1 3. Id
. s ec. 7 , 2 01 3 -4 3 I.R.B. at 4 0 3
.-1 7
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[* 1 7 ] No twi th s t an d i n g th e Co u rt ’ s fi n d i ng ab o v e, actual o r co n s tru ct i v e kn o wl ed g e m ay

b e n eg at ed i f t h e n o n req u es t i n g s p o u s e ab us ed th e req u es t i n g
s p o u se o r m ai n t ai nedco n tro l o v er t h e h o u s eh o l dfi n an ces b y res tri ct i ng th e req u es t i ng s p o u s e’ s acces s t o fi n an ci al i n fo rm at i o ns u ch thatth e n o n req u es t i n g
s p o u se’ s act io n s p rev en t edth e req u es t i n g s p ou s e fro m qu es ti o n in g o r ch al l en g i n g th e t reat m en t o f an y

i t em s o n th e jo i n tretu rn . Id . s ec. 4 .0 2 (3 )(a). “ Ab u s e co m es i n m an y fo rm s an d can i n cl ud e p h y s i cal , p s y ch o lo g i cal , s ex u al , o r em o t i o n al ab u se, i n cl ud i n g effo rt s t o co n tro l , i s o l at e, h u m i li at e, an di n t i m i d at e t he req u es t i n g
s p o u se, o r t o u n d erm i n e t h e req u es t i n g s p ou s e’ s ab i l i ty t o reas o ni n d ep en d en t l y
an d b e ab l e t o d o wh ati s req u i redu n d er t h e t ax l aws .” Id . s ec. 4 .0 3 (2 )(c)(i v ), 2 0 1 3 -4 3 I.R.B. at4 0 2 ; s ee, e.g ., St ep hen s o n v . Co m m i s s i o n er, T.C. M em o . 2 0 1 1
- 1 6 . Th i s Co u rtt ak es al l fact s an dci rcu m s t an ces i n t o acco un t i nd et erm i n i ng th e p res en ce o f ab us e, s ee Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 1 , 2 0 1 3 I.R.B. at3 99 , an d req u i res s ub s t an t i at i o n o r, at a m i n i m u m , s p eci fi ci ty

wi th reg ardt o al l eg at i o n s o f ab u se, s ee Ni h i s er v . Co m m i s s i o n er, T.C. M em o. 2 0 08 -1 3 5 . A g en eral i zedcl ai m
o f ab u se i s i ns u ffi ci en t . See Th o m as sen v . Co m m i s s i o n er, T.C. M em o. 2 0 11 -8 8 , aff’ d , 5 6 4 F. Ap p ’ x 8 8 5 (9 th Ci r. 2 0 14 ); Kn orr v . Co m m i s s i o n er, T.C. M em o . 2 0 0 4 -2 1 2
.-1 8
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[* 1 8 ] Pet i t i o ner i n d i cat edo n Fo rm 8 8 5 6 t h ats h e s u ffered fro m s p o us al ab u s e an d t es t i fi edattri al th ati n t erv en or ab u s edh er v erb al l y b y cal l i n g h er crazy , s t at i n g th ath e wo u l d ru i n h er fi n an ci al l y , an db l am i ng h er fo r t hei r t ax p ro b l em s . Wh i l e
an y Co u rtt ak es s eri o u sl y an y al l eg at i o n s o f s p o u s al ab u s e, t h e h i s t o ry o f acri m o n y b et ween p et i t i o n er an di nt erv en o r cal l s i nt o ques t i o nth e wei gh tt o b e g i v en t o p et i t i o n er’ s cl ai m s o f s p o u s al ab u s e. Th e reco rdd o es n o ti n cl u d e s p eci fi c
ev i d en ce t o s up po rth er b al dal l eg at i o ns o f ab u s e, an dth e Co u rtfi n ds h er cl ai m s t o b e s el f-s erv i ng an dn otcred i bl e. See To k ars k i v . Co m m i s s i on er, 8 7 T.C. at7 7
. Fu rt h erm o re, n o th i n g i n th e reco rdco rro bo rat es p et i t i o n er’ s t es t im o n y th at i n t erv en o r ab u sed h er “ i n an y s en s e t o wh i ch th e t ax l aw o r co m m o n ex p eri en ce wi l l acco rdan y

reco g n i t i o n .” Og o n o s ki v . Co m m i s s i on er, T.C. M em o . 2 00 4 -5 2 , s l ip o p . at1 7 -1 8 (an al y zi n g the fact ors s etfo rt h i na p red eces s or rev en ue p ro cedure t o Rev
. Pro c. 2 0 1 3 -3 4 , s up ra). Acco rd in g l y , p et i t i o n er h as fai l edt o
s h o w th ats h e i s el i g i b le fo r a s tream li n edd et erm i n at i o n . B. Equ i t ab l e Fact o rs Wh ere, as h ere, t h e req u es t i n g s p o u s e s at i s fi es th e t h res h o l dco n d i t i o n s b u t d o es no ts at i s fy

al l o f t h e requ i rem en t s fo r a s tream li n edd et erm i n at i o n, Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 3 (2 ), 2 01 3 -4 3 I.R.B. at4 00 -4 0 3 , s et s fo rt h s ev en n o n ex cl u s i v e fact ors t o b e co n s id eredi n d et erm i n i n g wh et h er a req ues t i n g s p o u s e i s en t i t l ed t o-1 9
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[* 1 9 ] equi t ab l e rel i ef u n der s ect i o n6 0 1 5 (f): (1 ) wh et h er th e requ es ti n g s po u s e i s
n o l o n ger m arri ed t o th e n o n req u es t i n g , (2 ) wh et h er t h e req u es t i n g s p o u s e wi l l
s u ffer an y eco n o m i c h ard s h i p if rel i ef i s n o tg ran t ed , (3 ) wh eth er t h e req u es t i n g
s p o u se kn ew o r h adreas o n t o kn o w o f t h e i t em g i v i n g ri s e t o t h e u n d ers tat em en t , (4 ) wh et h er ei th er s p o us e h as a l eg al o b li g at i on t o p ay th e o u t s tan d i n g Fed eral i n co m e t ax l i ab i l i ty , (5 ) wh et h er t h e req u es t i n g s p ou s e s i g n i fi can t l y b en efi t edfro m th e u n derp aym en t, (6 ) wh et h er th e req u es t i n g s p o us e h as m ad e a g o o d fai th effo rt t o co m p l y wi th th e i n co m e t ax l aws i nth e y ears fo l l o wi n g t h e y ears fo r wh i ch rel i ef i s s o ug ht , an d(7 ) wh et her t h e req ues t i n g s p o u s e was i np oo r m en t al o r p h y s i cal h eal th wh en the ret u rn s ati s su e were fi led , wh en th e req u es t fo r rel i ef
was m ad e, o r atth e t i m e o f t ri al . See Pu l l i n s v . Co m m i s si o n er, 1 3 6 T.C. 4 3 2 , 4 4 9 -4 5 4 (2 0 1 1 ). In m ak i n g a d et erm i nat i o nu n d er s ect i o n 6 0 1 5 (f), th e Co u rt
co n si d ers th e en um erat edfact o rs as wel l as an y o th er rel ev an t fact o rs . No s i n g l e fact or i s d i sp os i ti v e, an d“ [t ] h e d eg ree o f i m p ort an ce o f each fact o r v ari es d ep en d i ng o n th e req ues t i n g s p o u s e’ s fact s an dci rcu m s t an ces .” Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 3 (2 ), 2 01 3 -4 3 I.R.B. at4 00 ; s ee Pu l l i n s v . Co m m is si o n er, 1 3 6 T.C. at4 4 8 ; Hal l v . Co m

m is s i o n er, T.C. M em o . 2 0 1 4 -1 7 1, at* 3 8
.-2 0
-

[* 2 0 ] 1
. M ari tal St atu s If t h e req u es t i n g s p o us e i s n o l o n g er m arri edt o th e n on req u es t i n g s p o u s e, th i s fact o r wi l l wei gh i n fav o r o f g ran t i n g rel ief. Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 3(2 )(a), 2 0 1 3 -4 3 I.R.B. at4 0 0 . Si n ce p et i t i o n er an di n t erv en o r are d i v o rced , th i s fact o r wei g h s i n fav o r o f rel i ef.

2
. Eco n o m i c Hard s h ip Eco n o m i c h ard s hi p ex i s ts i f s at is fact i o no f t h e t ax l i ab i l i ty , i nwh o l e o r i n p art , wo u l dres u l t i n th e req u es t i n g s p o u s e’ s b ei n g u nab l e t o m eeth i s o r h er
reas on ab l e b as i c l i v i n g ex p en s es . Id
. s ec. 4 .0 3 (2 )(b ), 2 0 1 3 -4 3 I.R.B. at4 01 . If d en y i n g rel i ef fro m

jo i n tan ds ev eral l i ab i li ty wi l l n o tcau s e t he req u es ti n g s p o u s e t o s u ffer eco n o m i c h ard s h i p , th i s fact o r wi l l b e n eu tral
. Res p o n d en tco n ced es th atp et i t i o ner wi l l s u ffer eco n o m ic h ard s h i p i f s h e i s d en iedrel i ef fo r t he y ears ati s s u e. Th i s fact o r wei g h s i nfav o r o f rel i ef.

3
. Kn o w l ed g e o r Reas o nTo Kn o w In an u n d ers t at em en tcas e, i f th e req u es t i n g s p o u s e kn ew o r h adreas o nt o kn o w o f t h e i t em

g i v i n g ri s e t o th e u n ders t at em en tas o f t h e d at e t he jo i n t retu rn
was fi l ed , th is fact o r wi l l wei g h ag ai n s trel ief. Id . s ec. 4 .0 3 (2 )(c)(i )(A). Th e Co u rt
co n si d ers th e fact s an dci rcu m st an ces wh en d et erm i ni n g wh et h er t h e req u es t i n g-2 1
-

[* 2 1 ] s p o u s e h adreas o n t o kn o w o f an u n d ers t at em en t . Id . s ec. 4 .0 3 (2 )(c)(i i i ), 2 0 1 3 -4 3 I.R.B. at4 0 2
. As th e Co u rtfo un dab ov e, p et i t i o n er kn ew o r h adreas o nt o kn o w o f t h e i t em s g i v i n g ri s e t o th e u nd ers t at em en t . Th i s fact o rs th us wei g h s ag ai n s trel i ef.

4
. Leg al Ob li g at i o n Th i s fact o r fav o rs rel i ef wh ere t h e n o n reques t i n g s p o u s e h as th e s ol e
o b l i g at i o n t o p ay

an o u t s t an d i n g Fed eral t ax l i ab i l i ty u n der a b i n d i n g d i v orce d ecree o r o th er l eg al l y

b in d i n g ag reem en t . Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 3 (2 )(d ), 2 0 1 3 -4 3 I.R.B. at4 0 2 . Th i s fact o r i s n eu tral wh ere b o th s po u ses h av e s uch an
o b l i g at i o n, o r t h e d iv o rce d ecree o r ag reem en ti s s i l en t as t o an y s uch o bl i g at i o n . Id
. Fo l l owi n g th e au d i t, p et i t i o n er an di nt erv en o r s i gn ed Fo rm s 4 5 49 i nwh i ch th ey co n s en t edt o the as s es s m en tan dco l l ect i o n o f t h e d efi ci en cy am o u nt s , p l u s p en al t i es an d i n teres t . Fu rt h erm o re, t h e ag reem en ts t i p u l at edth atp et i t i o n er an d i n t erv en o r rem ai n edjo i n t l y an ds ev eral l y l i ab l e fo r t he u np ai d 2 01 0 an d2 01 1 Fed eral t ax l i ab i l i t i es . Th i s fact o r i s n eu tral
.

5
. Si g n i fi can tBen efi t Un d er th i s fact o r, th e Co u rtco n s i d ers wh et h er t he req ues t i n g s p o u s e recei v eda s i g n i fi can tb en efi t , b ey o n dn orm al s up p o rt , fro m th e und ers t at em en t .-2 2
-

[* 2 2 ] Id . s ec. 4 .0 3 (2 )(e), 2 0 1 3 -4 3 I.R.B. at4 0 2 . “ No rm al s up po rti s m eas uredb y th e ci rcu m s t an ces o f t h e p art i cu l ar p art ies .” Po rt er v . Co m m i ss i on er, 1 3 2 T.C. at2 1 2
. Ben efi t s i n ex ces s o f n o rm al s up p ortcarryl es s wei g ht , h o wev er, wh ere t h e
n o n req u es ti n g s p ou s e co n tro l l edth e h o u seh o l d o r b u s i n es s fi n an ces , m ak i ng th i s fact or n eu tral . Rev . Pro c. 2 0 1 3-3 4 , s ec. 4
. 0 3 (2 )(e). Th i s fact o r wi ll wei g h i nfav o r
o f g ran t i n g rel i ef i f: (1 ) t h e n o n req ues t i n g s p ou s e s i g n i fi can t l y b en efi t edfro m th e
u np ai dt ax an dth e requ es t i n g s p o u s e h adl i tt l e o r n o b en efi t , o r (2 ) t h e
n o n req u es ti n g s p ou s e en

jo y edth e b en efi tt o the req u es t i n g s p o u s e’ s d et ri m en t . Id
. Ad d i t i o n al l y , th is Co u rth as co n s i d eredth e l acko f s i g n i fi can tb en efi tt o th e req u es t i ng s p o u s e as a fact o r fav o ri n g rel i ef u n der s ect io n6 01 5 (f). W an g v . Co m m i s s i o n er, T.C. M em o . 2 0 1 4 -2 0 6 , at* 4 0
. Pet i t i o ner d i dn o trecei v e a s i g n ifi can tb en efi tb ey o ndn o rm al s up po rtfro m h er an di n t erv en o r’ s u nd ers t at em en to f t hei r t ax l i ab il i ti es fo r t h e y ears ati s s u e. Th i s fact or wei g h s i n fav o r o f rel i ef.

6
. Co m

pl i an ce Un d er th i s fact o r, we co n s i der wh et h er t h e req ues t i n g s po u s e m ad e a g o o d -fai th effo rtt o co m

p l y wi th the t ax l aws fo r t h e t ax ab l e y ears fo l l o w i n g th e y ear fo r wh i ch rel i ef i s req u es t ed . Rev . Pro c. 2 0 1 3-3 4 , s ec. 4 .0 3 (2 )(f), 2 0 1 3 -4 3 I.R.B. at4 02 . Th is fact o r wi l l wei g h i nfav o r o f rel i ef i f th e requ es t i n g s p o u s e i s-2 3
-

[* 2 3 ] i n fu ll co m

p l i an ce fo r t h e t ax y ears aft er b ei n g d i v o rcedfro m th e
n o n req u es ti n g s p ou s e. Id
. s ec. 4 .0 3 (2 )(f)(i ), 2 0 1 3 -4 3 I.R.B. at4 0 2. Th is fact o r wi l l wei g h ag ai n s trel ief i f th e req ues t i n g s p o u s e i s n o t i n fu l l co m pl i an ce wi th t ax l aws fo r t h e t ax y ears aft er b ei ng d i v o rcedfro m th e n o n req u es t i n g s p o u s e. Id
. Th i s fact or wi l l b e n eu tral i f t h e req u es ti n g s p o u se m ad e a g oo d -fai th effo rtt o
co m p l y wi th th e t ax l aws fo r t h e t ax y ears aft er b ei n g d i v o rcedfro m th e
n o n req u es ti n g s p ou s e b u t was u n ab le t o fu l l y co m p l y . Id . Th e Co u rtco n s i d ers th e req u es t i ng s p o u s e’ s co m

p l i an ce s t atu s atth e t i m e o f t ri al . Sm i th v . Co m m i s s i o n er, T.C. M em o . 2 00 9 -2 3 7 , s l i p o p . at1 5 n .5 As o f t h e M arch 2 0 1 9 t ri al , p et i t i o n er was i nco m p l i an ce wi th h er Fed eral i n co m e t ax retu rn fi l i n g o b li g at i o n s . Th e Co u rtn o t es , h owev er, t hatp et it i on er
u n t i m el y fi l edh er t ax return s fo r t ax y ears 2 0 12 th ro u g h 2 0 1 5 i n Feb ru ary 2 0 1 7
an d , s h o rt l y

th ereaft er o n Ap ri l 2 4 , 2 0 1 7, fi l eda p et i t i o nt o t h i s Co u rtap p eal i n g th e Ap p eal s Offi ce’ s fi n al d et erm in at i o nd en y i n g h er rel i ef u n d er s ect io n6 0 1 5
. Gi v enth es e fact s , we can n o t s ay thatp et i ti o n er m ad e a g o o d -fai th effo rtt o co m p l y wi th Fed eral i nco m e t ax l aws i n th e y ears fo l l o wi n g th e y ears ati s s ue. See Pu l l i n s
v . Co m m i s s i o n er, 1 3 6 T.C. at4 5 3 (co n cl u d in g th at th e t ax p ay er’ s fi l i n g o f h er 2 0 0 4 an d2 0 0 5 t ax retu rn s th e week en db efo re h er Sep t em b er 2 0 0 9 t ri al fai l edt o-2 4
-

[* 2 4 ] p ro v e t h at s he h adm ad e a g o o d -fai th effo rtt o co m p l y wi th Fed eral i n co m e t ax l aws ). Th i s fact o r wei g hs ag ai n s t g ran ti ng rel i ef.

7
. Heal th Th i s fact o r m ay wei g h i n fav or o f rel i ef i f t h e req u es ti n g s p o u se was i np o o r
m en t al o r p h y s i cal heal th wh en th e t ax retu rn s were fi l ed , wh en th e req u es t fo r rel i ef was m ad e, o r atth e t i m e o f t ri al . Rev
. Pro c. 2 0 1 3 -3 4, s ec. 4 .0 3 (2 )(g ), 2 0 1 3 -4 3 I.R.B. at4 0 3 ; s ee al s o Pu l l i n s v . Co m m i s s i o n er, 1 3 6 T.C. at4 5 4 . If th e req u es t i ng s p o u s e was i n n ei th er p o o r p h y s i cal n o r p o o r m en t al h eal th, thi s fact o r i s n eu tral . Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 3 (2 )(g ). Th e p art i es ag ree t h atp et i t i o n er was n o t i np o o r p h y s i cal o r p o o r m en t al h eal th atan y

o f t h e ab ov e t im es . Th i s fact o r i s n eu tral
. C. Co n cl u si o n In s u m m ary , th ree o f t h e fact o rs wei g h i nfav or o f g ran ti n g rel i ef, wh i l e t wo wei g h ag ai n strel i ef. Th e rem ai n i n g two fact o rs are n eu tral . Our d eci s i o n wh et h er rel i ef i s ap pro p ri at e, h o wev er, i s n o t b as edo na s i m p le t al l y o f fact o rs . See, e.g
. , Hu d g i n s v . Co m

m i s s i o n er, T.C. M em o . 2 01 2 -2 6 0 , at* 40 . Rat h er, o u r d eci s i o n i s h eav il y i nfl u en cedb y

th e t o t al it y

o f t h e ci rcu m st an ces . Aft er wei g h i ng al l th e fact s an dci rcu m s t an ces , we are n otp ers u ad edthatp et i t i o n er i s en t i t l edt o rel i ef
u n d er s ect i o n 6 0 1 5 (f). Co n s i d eri n g th atp et it i o n er was i n t i m at el y i n v o lv edwi th-2 5
-

[* 2 5 ] Cap i t al Ci ty

Ten t, knew o r h adreas o n t o kn o w o f t h e i t em s g i v i ng ri s e t o th e
u n d ers t at em en t , an dfai l edt o m ak e a g o o d -fai th effo rtt o co m p l y wi th h er Fed eral i n co m e t ax retu rn fi l i n g o b li g at i o n s , we co n cl u d e t h ati two u l d n o t b e i n equ i t ab l e t o d en y p et i t i o n er rel i ef fro m

jo i n t an d s ev eral l i ab i li ty u n d er s ect i on 6 0 1 5(f) fo r th e y ears ati s s u e. W e h av e co n s id eredal l o th er arg u m en t s o f t h e p art i es an d , t o th e ex t en tn o t d i s cu s s edab o v e, fi n dth o s e arg u m en t s t o b e i rrel ev an t , m o o t , o r wi tho u tm eri t . To refl ectthe fo reg o i n g , Deci s i o n wi ll b e en t eredfo r
res p o nd en t .