T.C. Summary Opinion 2007-204

UNITED STATES TAX COURT

THOMAS A. SCHROEDER, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 4207-06S. Filed December 6, 2007.

Thomas A. Schroeder, pro se.

Angela J. Kennedy, 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. Unless otherwise indicated, all section references are to

the Internal Revenue Code in effect for the year in issue.
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Respondent determined a deficiency of $1,043 in petitioner’s

Federal income tax for 2003. Petitioner does not dispute the

deficiency but claims that his former spouse should be held

liable for one-half of it.

Background

Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference. 

Petitioner resided in Indiana at the time that his petition was

filed.

During 2003, petitioner was married to Kathi Schroeder. 

Petitioner and Kathi Schroeder divorced in 2004.

For more than 10 years prior to 2003 and during 2003,

petitioner was a limited partner in Franklin Ridgewood Associates

Limited Partnership. Petitioner made the investment and signed

the necessary papers because Kathi Schroeder did not participate

in matters involving investments. On the partnership return,

petitioner alone was shown as the partner receiving distributions

of income; Kathi Schroeder was not shown as a partner. During

2003, petitioner received distributed income and interest income

from Franklin Ridgewood Associates Limited Partnership in the

total amount of $2,894.

On April 15, 2004, petitioner and Kathi Schroeder filed a

joint Form 1040, U.S. Individual Income Tax Return, for 2003. 

The income of $2,894 received from Franklin Ridgewood Associates
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Limited Partnership was not reported on that return. In the

notice of deficiency, respondent determined a deficiency of

$1,043 attributable to the failure to report the partnership

income on petitioner’s 2003 return.

Discussion

Petitioner’s contention in this case is that his former wife

should be required to pay one-half of the deficiency and interest

attributable to the failure to report partnership income during

2003. The petition alleges that petitioner and his former wife

both shared the benefits of the partnership throughout their

marriage, she shared in the distribution of all assets including

the value of the limited partnership, and she had the ability to

pay “her fair share of the tax”.

Section 6013(d)(3) provides that, if a joint return is

filed, the tax is computed on the individuals’ aggregate income,

and liability for the resulting tax is joint and several. See

also sec. 1.6013-4(b), Income Tax Regs. A fundamental

characteristic of joint and several liability is that the

Internal Revenue Service (IRS), at its option, may proceed

against the taxpayers separately and may obtain a separate

judgment against each. See Dolan v. Commissioner, 44 T.C. 420

(1965). The decision to assess or not assess tax against one of

the spouses who filed a joint return does not prevent the IRS

from proceeding against the other. See id.; see also Kroh v.
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Commissioner, 98 T.C. 383 (1992). Petitioner was a partner in

the partnership that was the source of the unreported income in

issue.

Therefore, the Court has no basis for limiting petitioner’s

liability to 50 percent as he requests. Petitioner does not

qualify for section 6015 relief, because he admits to receiving

and failing to report the items of income. Petitioner does not

qualify for relief under section 6015(b), because he cannot

establish that he did not know or had no reason to know that

there was an understatement of tax when he signed the return. 

See sec. 6015(b)(1) and (2). Petitioner testified that he was

unaware of the understatement on the return because he did not

receive the form for 2003 reporting distributions from the

partnership and he relied on his accountant to prepare the

return. In view of his long-held interest in the partnership,

however, he should have known that his income from the

partnership was not included on the return and that an

understatement would result. Because the items giving rise to

the deficiency were directly allocable to petitioner, section

6015(c) does not provide any avenue for relief. See also sec.

1.6015-3(d)(2)(iii), Income Tax Regs. (stating that erroneous

items of income are allocated to the spouse who was the source of

the income). Finally, it is not inequitable to hold petitioner

liable for the deficiency since he fails one of the threshold
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conditions for relief, i.e., “The income tax liability from which

the requesting spouse seeks relief is attributable to an item of

the * * * [other spouse]”. Rev. Proc. 2003-61, sec. 4.01(7),

2003-2 C.B. 296, 297.

To reflect the foregoing,

Decision will be entered

for respondent.