T.C. M em o . 2 0 1 7 -5 9

UNITED STATES TAX COURT

V ERETTA RICE YANCEY, Pet i t i o n er v . COM M ISSIONER OF INTERNAL REVENUE, Res po n d en t

Do ck etNo . 5 4 5 7-1 5. Fi l edAp ri l 6 , 2 0 1 7
.

Veret t a Ri ce Yan cey , p ro s e. An g el a B. Reyn o ld s, fo r res p on d en t.

M EM ORANDUM FINDINGS OF FACT AND OPINION ASHFORD, J u d g e: Pet i t i o n er fi l edth e p et it i on i n t h i s cas e i n res p o n s e t o a
s o -cal l edFi n al Ap p eal s Det erm i n at i o n (n o t i ce o f d et erm i n at i o n ) d en y i n g h er req u es tfo r rel ief fro m

jo i n t an ds ev eral l i ab i l it y u nd er s ect i on 6 0 1 5 fo r t h e 2 0 0 7- 2
-

[* 2 ] an d 2 0 0 8 t ax ab l e y ears . 1 W e m u s t d eci de wh et h er p et i t i o ner i s en t i tl edt o rel i ef u n der t h at s ect i o n fo r t h o s e y ears . W e h o ldth ats h e i s n o t
. 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 n b y referen ce. Atth e t im e p et i ti o n er fi l edth e p et i t i o n i n t h i s cas e, s h e res i dedi n Il l i n o i s . OnJ u ne 1 8 , 1 98 7 , p et i t i o n er m arri ed Bri an M an n (M r. M an n ). Pet i t i o n er
an d M r. M an n (M an ns ) were m arri edth ro u gh o ut2 0 07 an d2 0 0 8 an dh av e o n e ch i l d
. Du ri n g 2 0 0 7 p et i t i o n er was em p l o y edas a res ou rce m an ag er atHewi t t As s oci at es , LLC (Hewi tt ). Du ri n g 2 0 0 8 p et i t i o n er was em p l o y edatHewi t t , Un i ted Ai rl i nes , an dW at s o n , Wy at t& Co
. Du ri n g 2 0 0 7 an d2 0 0 8 M r. M an n was ret i red . Duri n g atl eas t2 0 07 an d 2 0 0 8 M r. M an n g am

bl edex t en s i v el y

atv ari o u s cas in o s. Du ri n g th o s e y ears an d wh en , as d i s cu s sedb el o w, s h e was p rep ari n g t h e M an n s’ Fed eral i n co m e t ax

1 Un l es s o t h erwi s e i nd i cat ed , al l s ect i o n referen 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. So m e am o u nt s are ro un d edt o t h e n eares t d o l l ar.- 3
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[* 3 ] retu rn s fo r t h e 2 0 0 7 an d2 0 0 8 t ax ab le y ears , p et i t i o n er was aware o f M r. M an n ’ s g am

b l i n g h ab i t s an dh is o u t s t an di n g g am b l i n g d eb t s. Du ri n g atl eas t 2 0 0 7 an d2 0 0 8 th e M an n s m ai n tai n eda jo i n tacco un ti n t o wh i ch p et i t i on er d ep o s i t edh er wag e i n co m e. Th ro ug h o u tth att im e, p et i t i o n er p ai dfro m th at jo i n tacco u n t atl eas ts o m e o f t h e M an n s ’ ex p en s es . Ata t i m e n o t
es t ab l i s h edb y t h e reco rdan ddu ri n g atl eas t2 0 0 7 , M r. M an n m ai nt ai n ed i n h i s
s o l e n am e atl eas to n e b an kacco u n t
. Th e M an n s jo i n t l y

fi l eda Fo rm

1 0 4 0, U.S. In di v i du al In co m e Tax Retu rn (ret u rn ), fo r t h e 2 0 0 7 t ax ab le y ear (2 0 0 7 jo i n t retu rn ) an dfo r th e 2 00 8 t ax ab l e y ear (2 0 0 8 jo in tretu rn ). (W e refer co l l ect i v el y t o th e 2 0 0 7 jo i n tretu rn an dth e 2 0 0 8 jo i n t retu rn as the jo i n tretu rn s .) As rel ev an th ere, t h e M an n s i n cl u dedwi t h th e jo i n t retu rn s Sch edu l es A, It em i zedDedu ct i o n s, an d t h ey al s o i n cl u d edwi t h th e 2 0 0 8 jo i n tretu rn a Sch edu l e C, Pro fi to r Lo s s Fro m Bu s i n es s . Pet i t i o ner, n o tM r. M an n , p rep aredth e jo i ntretu rn s. Pet i t i o n er recei v ed i n t h e m ai l atth e M an n s ’ h o m e th e t ax -rel at edi n fo rm at i o n t hats h e n eed edt o p rep are t h e jo in tretu rn s . Atth e t im e p et i t i o n er s ig n edthe jo i n tretu rn s , s h e h adn o m en t al
o r p h y s i cal h eal t h p ro b l em s wh i ch p rev en t edh er fro m b ei ng ab l e t o u nd ers t an dth e
co n ten t s o f t h e ret u rn s . Atal l rel ev an tt i m es p et i t i o n er was n o tth e v i ct i m o f
s p o u sal ab u s e o r d o m es t i c v i ol en ce.- 4
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[* 4 ] Onth e 2 0 0 7 jo i nt retu rn th e M an ns rep o rt edt o t al i n co m e o f $ 1 5 5 ,9 0 6 , co n si s t i n g o f “ [w] ag es , s al ari es , t i p s , et c.” o f $ 7 8 ,9 32 , t ax ab l e So ci al Secu ri t y b en efi t s o f $ 1 3 ,6 5 3 , an d M r. M an n ’ s g am b l i n g i n co m e (refl ect edas “ [o ] t h er i n co m e”) o f $ 6 3 ,3 2 1. Onth e Sch edul e A i n cl u d edwi t h th e 2 0 0 7 jo i n t retu rn th e M an n s cl ai m edo n l i n e 2 3 , i n th e s ect io n fo r jo b ex p en s es an d cert ai n
m i s cel l an eo u s d edu ct i o n s , a “ GAM BLING LOSS” o f $ 38 ,6 3 3 an d o n l i n e 2 8 , i n t h e s ect i o n fo r o t h er m i s cel lan eo u s d edu ct i o n s , “ GAM BLING LOSSES” o f $ 6 3 ,3 2 1 , res ul t i n g i n a n etd educt i o n cl ai m edfo r g am b l i n g l o s ses , aft er t ak i n g i n t o
acco u n t th e l im i t at i o n o n d edu ct i b l e m i scel l an eo u s ex p en s es , o f $ 9 9 ,3 5 1 . Fi n al ly , o n th e 2 00 7 jo in tretu rn th e M an n s rep o rt ed t ot al t ax o f $ 7 2 8 , t o t al p aym en t s o f $ 8 ,7 4 6 , an da res u l t i ng o v erp aym en t o f $ 8 ,0 1 8 , wh i ch was refu nd edt o them o n M ay 5 , 2 0 0 8
. Onth e 2 0 0 8 jo i nt retu rn th e M an ns rep o rt edt o t al i n co m e o f $ 1 7 0 ,1 9 0 , co n si s t i n g o f “ [w] ag es , s al ari es , t i p s , et c.” o f $ 1 4 1 ,2 6 4 , a b us i n es s l o s s o f $ 3 ,7 2 9 , a cap i t al l o s s o f $ 6 , t ax ab l e So ci al Secu ri t y b en efi t s o f $ 1 3 ,9 6 8 , an dM r. M an n ’ s g am b l in g i n co m e (refl ect edas “ [o ] t h er i n co m e”) o f $ 1 8 , 6 93 . On t h e Sch edu l e A i n cl u d edwi t h th e 2 0 08 jo i n t retu rn th e M an ns cl ai m edo n l in e 2 3 , i n th e s ect i o n fo r jo b ex p en s es an d cert ai n m i s cel l an eo u s d edu ct io n s , a “ GAM BLING LOSS” o f $ 1 8 ,6 9 3 an do n l i n e 2 8 , i n th e s ect i o n fo r o t her m i s cel l an eo u s d edu ct i o n s ,- 5
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[* 5 ] “ GAM BLING LOSSES” o f $ 1 8,6 9 3 , res ul t i n g i n a n etd edu ct i on cl ai m edfo r g am b l in g l o s s es , aft er t ak i n g i n t o acco u ntth e l i m i t at io n o n d educt i b l e
m i s cel l an eo u s ex p en s es , o f $ 3 4 ,4 2 3 . Onthe Sch edul e C t h e M an n s rep o rt edzero i n co m e an d cl ai m ed“ [o ] t h er ex p en s es ” o f $ 3 ,7 2 9 fo r a “ fi g u re s k at in g dres s ” b u s i n es s o p erat eds o l el y

b y p et i t i o n er. Fi n al l y , o n t h e 2 0 0 8 jo i ntretu rn th e M an n s rep o rt edt o t al t ax o f $ 1 2 ,9 9 4 , t o t al p aym en t s o f $ 2 3 ,3 7 8 , an da res u l ti n g
o v erp aym en t o f $ 1 0,3 8 4, wh i ch was refu n d edt o t h em o n M ay 4 , 2 0 0 9
. OnAu gu s t1 4 , 2 0 0 9, p et i t i o n er co m m en ced a p ro ceed i n g i n th e Ci rcu i t Co u rtfo r the Ei g h t een t h J u d ici al Ci rcu i ti n Du Pag e Co u n t y , Il l i n o i s (Du Pag e Co u n t y co u rt ), i n wh i ch s he s o u g h t a d ecree d i s s ol v i n g h er m arri ag e t o M r. M an n . OnNo v em

b er 9 , 2 0 0 9 , th e Du Pag e Co u n t y co urti s su eda d ecree o f d i s s o l ut i o n o f
m arri ag e (d i v o rce d ecree). Th e d i v o rce d ecree o rd eredan dad ju d g edi n p ert i n en t p artthat“ [M r. M an n ] s h al l b e res p o n s i b l e fo r an y t ax l i ab i li t y as s es sedag ai n s t * * * [h i m ] an d* * * [p et i ti o n er] as a res u l to f an y jo i n tt ax retu rn s fi l ed fo r t h e y ears du ri n g th e m arri ag e.” Fo l l owi n g an ex am i n at i o n o f t h e jo i n t retu rn s, res p on d en td et erm i n edi n p ert i nen tp artth at(1 ) the M an n s ’ rep ort edwag es o f $ 7 8,9 3 2 o n t h e 2 0 0 7 jo i n t retu rn s h o u l db e d ecreas ed b y $ 1 1 ,6 8 6 t o ag ree wi th the am o u nts h o wno n th e Fo rm W -2 , W ag e an dTax St at em en t , fro m Hewi t t ; (2 ) t h e M an n s ’ t ax ab l e i n co m e- 6
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[* 6 ] s h o u l db e i n creas edb y $ 1 1 ,6 85 an d$ 7 ,4 1 4 fo r t h e 2 0 0 7 an d 2 0 0 8 t ax ab l e y ears , res p ect i v el y , o n acco u n t o f recei p t o f t ax ab l e d i s t ri b u ti o n s fro m an i n d i v i du al ret i rem en tarran gem en t(IRA) wi t h Il l i n o i s M u ni ci p al Ret i rem en tFu n d ; (3 ) t h e Sch edu l e A g am

b l i n g l o s s d edu ct i o ns o f $ 3 8 ,6 3 3 an d$ 1 8 ,6 9 3 fo r t h e 2 00 7
an d 2 0 0 8 t ax ab l e y ears , res p ect i v el y , s h ou l db e d i s al l o wed ; an d (4 ) t h e Sch edu l e C

“ o t her ex p en s e” d edu ct i on o f $ 3 ,7 2 9 fo r th e 2 00 8 t ax ab l e y ear s h o u ldb e d i s al lo wed . Res p o n d en tal s o d et erm i n ed t h ats ect i o n 6 6 6 2 (a) accu racy -rel at ed p en al t i es s h o u ldb e i m

p o s edfo r t h e 2 00 7 an d2 0 08 t ax ab l e y ears . A n o t i ce o f d efi ci en cy

i s s u edt o th e M an n s o n J u l y 2 2, 2 0 1 0 , refl ect edth o s e d et erm in at i o n s
an d d et erm i n edd efi ci en ci es i n th ei r Fed eral i n co m e t ax o f $ 5 ,2 3 6 an d $ 6,7 2 0 an d
accu racy -rel at edp en al ti es p u rs u an tt o s ect i o n 6 6 6 2 (a) o f $ 1 ,0 4 7 an d $ 1 ,3 4 4 , fo r t h e 2 0 07 an d 2 0 0 8 t ax ab l e y ears , res p ect i v el y . Nei t her p et i t i o ner n o r M r. M an n fi l ed a p et i ti o n wi t h t h e Co u rtwi t h res p ect t o the n o t i ce o f d efi ci en cy . Acco rd i n g l y , o n Feb ru ary 7 , 2 0 1 1 , res p o n d en t
as s es s edth e d efi ci en ci es an dth e s ect i o n 6 6 6 2 (a) accu racy -rel at edp en al ti es d et erm i n edi n th e n o t i ce o f d efi ci en cy , t o g et h er wi t h i n t eres tth ereo n as p ro v i d ed b y l aw. Du ri n g 2 0 1 2 p et i t i o n er was em p l o y edatHo s p i ra, In c. Du ri ng 2 0 1 3 s h e was
u n em p l o y ed
.- 7
-

[* 7 ] Ata t i m e n o tes t ab l i s h edb y th e reco rddu ri n g 2 0 1 3 , p et i t i o n er rem arri ed
. Pet i t i o ner fi l eda retu rn fo r t h e 2 0 12 t ax ab l e y ear (2 0 1 2 return ) an dfo r t h e 2 0 1 3 t ax ab l e y ear (2 0 1 3 retu rn ). Onth e 2 0 1 2 retu rn s h e cl ai m eda fi l i n g s t atu s o f

“ Head of Ho u s eh o l d ” an drep o rt edt o tal i n co m e o f $ 1 0 3,5 2 5 , co n s i st in g m o s t l y o f

“ W ag es , Sal ari es , Ti p s , Et c.” o f $ 1 0 1,0 0 9 . Sh e al s o rep o rt eda Sch edu l e C b u s i n es s l o s s o f $ 6,5 5 4, t ax ab l e IRA d i s t ri bu t i on s o f $ 5,9 6 0 , u n em pl oym en t
co m p en s at i o n o f $ 2 ,0 1 5 , an do t h er n o m in al i tem s o f i n co m e. Fi n al ly , o n th e 2 0 1 2 retu rn p et i t i o n er rep o rt edt o t al t ax o f $ 8 ,4 0 8 , t o t al p aym en t s o f $ 2 1 , 1 4 6 , an da
res u l ti n g o v erp aym en to f $ 1 2 ,7 3 8 . Onth e 2 0 1 3 retu rn s h e cl ai m eda fi l i n g s t atu s
o f “ M arri edFi l in g Sep arat e” an drep o rt edt o tal i n co m e o f $ 2 1 ,9 6 6, co n s i s t i n g o f
u n em p l o ym en tco m

p en s at i o n o f $ 2 1,8 61 an do rd i n ary d i v i d en di n co m e o f $ 1 0 5 ;
s h e rep o rt ed zero “ W ag es , Sal ari es , Ti p s , Et c.” Fi nal l y , o n t h e 2 0 1 3 retu rns h e rep o rt edt o t al t ax o f zero , t o t al p aym en t s o f $ 2 , 1 9 1, an d a res u l t i n g o v erp aym en t
o f $ 2 , 1 9 1
. OnJ u ne 6 , 2 0 13 , p et i t i o n er s ub m i t tedFo rm 8 8 5 7 , Req u es tfo r In n o cen t Sp o u s e Rel i ef, i n wh ich s h e req u es t edrel i ef fro m jo i n tan d s ev eral l i ab i l i t y u n d er
s ect i on 6 0 1 5 wi t h res p ectt o th e 2 0 0 7 an d2 0 0 8 t ax ab l e y ears . Onth at fo rm p et i t i o n er d i dn o tch eckthe b o x th atwo u l dh av e i n d i cat edth at s he h ads i g nedth e jo i n t retu rn s u n d er dures s .- 8
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[* 8 ] OnJ u ly

2 6 , 2 0 13 , M r. M an n s ub m i tt edt o res p o nd en t Fo rm 1 2 5 0 8 , Qu es t i o nn ai re fo r No n -Req u es t i n g Sp o u s e. In t hatfo rm M r. M an n s t at edi n p ert i nen tp art : As far as t ax d o cu m en t s , W -2 s , et c. I d i dn o th av e t o g i v e an y d o cu m en t s t o th e res p on d en t(Veret t a R. M an n ). Sh e g at h eredth i s i n fo rm at i o n v i a t h e m ai l d el i v eredt o o u r ad dres s * * * I d o n ot recal l ev er v i ewi n g o r s ig n i n g an y o f th es e t ax fi l i n g s i n qu es t i o n , I n ev er as k edan y

qu es t i o n s . I l eth er h an dl e t h e t ax es . * * * * * * * Th i s i nd i v i du al [Veret t a R. M an n ] was aware o f a g am b l in g p ro bl em I h adan d s o m e o f t he d eb t s I h adi n cu rredan d was n o tp ay i n g . * * * * * * * Th e ch an g ed i t em s were m i ne, b u tth es e ch an g es were m ad e du e t o an i n t en ti o n al o r u n i nt en t i o nal erro r m ad e b y th e requ es t i n g s p o u s e reg ard i n g d i s al l o wed d edu ct i o n s fo r g am b l in g l o ss es . * * * * * * * Yes , th e req u es t in g s p o u s e d i db en efi tfro m th e m o n ey

recei v edfo r t h e t ax y ears i n qu es t i o n . Th e req u es t i n g s p o u s e d i d n o t i n fo rm m e o f h o w m u ch m o n ey

s h e recei v eddu ri n g b o t h t ax y ears i n qu es t i o n . Th e i n di v i du al fi l i n g th i s i n n ocen t s p o u s e cl ai m was t o tal l y res p on s i b l e fo r the i n co rrect am ou n t s en t eredreg ard in g m o ney wo n o r l o s t as a res u l to f m

y g am b l i n g . Sh e t o oki tupo n h ers el f t o fi l e wi t h ou tm e s eei n g o r s i g n i n g th e t ax return s . Ag ai n , I d o n ’ t recal l s i gn i n g ei t h er, b u t i n th e p as t , wh en I d i ds i g n , I d i d s o wi t ho u t qu es t i o n i n g th e i n fo rm at i o n en t ered . I al way s as s u m ed s he was d o i n g ev eryt h i n g th atwas req u i red t o fi l e o u r t ax es .- 9
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[* 9 ] Pl eas e n o t e, t h atI d i d no ts ee a d im e o f th e o verp aym en t s s he recei v edfro m

the t ax retu rn s . Sh e h adt o kn o w th ats h e was n o t en t i t l edt o s u ch a l arg e ret u rn . I was v ery s u rp ri sedwh en I s aw h o w m u ch m on ey

s h e g otb ack
. OnSep t em

b er 9 , 2 01 3 , M r. M an n fi l eda p et i t i o n fo r b an krup t cy u nd er ch ap ter 7 o f t i t l e 1 1 o f t h e U.S. Co d e (ch ap t er 7 ) wi t h th e U.S. Ban krup t cy Co u rt fo r t h e No rt h ern Di s t ri cto f Il l i n o i s (b an krupt cy co u rt ). OnDecem

b er 2 4 , 2 0 1 3 , t h e b an krup tcy

co u rtad ju di cat ed M r. M an n b an krup tu n d er ch ap ter 7
. Des p i t e h av i n g a fi l i ng o b l i g at i o n fo r t h e 2 0 1 4 t ax ab l e y ear, p et i t io n er d i d
n o tfi l e a ret urn fo r t h att ax ab l e y ear, n o r d i ds h e req u es to r recei v e anex t en s i o n o f t i m e wi t h i n wh i ch t o fi l e a ret u rn fo r t h att ax ab l e y ear. Ats o m e p o i n t b efo re Sep t em b er 1 1 , 2 0 1 4, res p o n d en t d et erm i n edthat p et i t i o n er was n oten ti t l edt o the req u es t edrel ief. Pet it io n er s ub m it t edt o
res p o n d en t Fo rm

1 2 5 0 9 , St at em en to f Di s ag reem en t , d at ed Sep t em b er 1 1 , 2 0 1 4 , ap p eal i n g th e d et erm i n at i on ag ai n s th er. In th atfo rm s h e s t at edth e fo l l o wi n g : I, Veret ta Ri ce Yan cey , d i s ag ree wi t h th e In t ern al Rev en u e Serv i ce d et erm i nat i o n b ecau s e du ri n g th e t ax y ears o f 2 0 0 7 & 2 0 0 8 I was m arri edt o Bri an B. M an n an dh e i s t o t al l y res p on s ib l e fo r al l t ax rel at edex p en s es p ri o r t o 2 0 0 9
. As y o ukn o wfro m

th e reco rd , Bri an M an n recei v ed l arg e s u m s o f m o n ey g am b l i n g i n Il l i n o i s , In d i an a, W i s co ns i n an d M i ch i g an . I earn edm o n ey

wo rk i n g atUn i t edAi rl i n es an dW at s o n Wy at t
. M y earn in g s were rep o rt edan dt ax es were p ai d
.- 1 0 -

[* 1 0 ] I was n o taware o f th e i t em s cau s i ng th is d eb t . Wh en Bri an M an n p ro v i d edt ax d at a t o m e, I d i dn o th av e reas o n t o b el i ev e t h ath e was d i s h o n es t i n h i s n u m

b ers . It w as l at er wh en I b ecam e aware o f h i s ad d i ct i o n g am bl i n g ad d i ct i o n [s i c] an db y

th at t i m e, I h adal read y

i n cu rreda t rem en do u s am o u nto f d eb t t hatI am

s t i l l p ay in g i n 2 0 1 4. I i m m ed i at el y s ep arat edm

y s el f fro m h i m an dt o p ro t ectm

y s el f fro m

h i s l i ab i l i t i es , I t o okth es e n eces s ary s t ep s :

• A s eco n dm o rt g ag e o n th e h o u s e s o l el y i n m y n am e ($ 5 0 ,0 0 0 ) t o p ay o ff h i s cred i tcardp aym en t s
• Op en edan i n d i v i du al ch eck i n g * * * [acco u n t ]
• Fi l edfo r d i v o rce an dd i v o rce fi n al i zedi n 2 0 0 9 As y o uh av e i n y o u r reco rd s , h i s arran g em en tt o p ay fo r th e t ax d eb t was m i n i m

um b as ed o n th e fact th atI h av e a $ 5 0 k s eco ndm o rt g ag e an d$ 4 0 k i n ad d i t io n al cred i tcardd eb tas a p arto f t h e d i v o rce s et t l em en t
. Pl eas e n o t e t hatm

y req u es tfo r rel i ef i s an effo rtt o m ai n t ai n g o o d m en t al an d p h y s i cal h eal t h an dav o idan y fu rth er s t res s . I s u ffered b o t h a h o u s e fi re an da fl o o dwh i l e I was u n em p l o y ed
. It w o u ldb e u n fai r t o h o l dm e res p o n s ib l e fo r h i s n eg l i g en ce an d d ecei t . I requ es tth e IRS t o co n s i d er th e fact s i n th i s cas e an drem o ve m e as a t ax p ay er fo r an y d eb ti n cu rredb y

Bri an M an n i n 2 0 0 7 an d 2 0 0 8 . As an ad d i ct , h e h as b een v ery cl ev er i n av o id in g res p on s i b i l i t y . OnDecem

b er 8 , 2 0 14 , res p o n d en t ’ s In t ern al Rev en ue Serv i ce (IRS) Offi ce
o f Ap peal s i n Co v i n g t o n , Ken tu cky , i s s u eda n o t i ce o f d et erm i n at io n t o p et i t i o n er d en y i n g h er rel i ef fro m

jo i n t an ds ev eral l i ab i l it y u nd er s ect i o n 6 0 1 5(b ), (c), an d- 1 1 -

[* 1 1 ] (f) fo r t h e 2 00 7 an d2 0 08 t ax ab l e y ears . Acco rd i n g t o the n o t i ce o f d et erm i n at i o n , s h e was d en i ed rel i ef fo r t h e fo l l o w i ng reas o n s : Th e i n fo rm at i o n we h av e av ai l ab l e d o es n o t s h o w y o um eetth e req u irem en ts fo r rel i ef. Rel i ef i s n o tal l o wed o n t ax y o uo we o n y o u r o wni n co m e o r d edu ct i o n s. Yo u kn ew, o r h ad reas on t o kn o w, o f t he i n co m e o r d edu ct i o n s th at cau s edth e ad d i t io n al t ax . Yo u d i dn o ts h o w i t wo u l db e u n fai r t o h o l dy oures p o ns i b l e. OnFeb ru ary 2 6 , 2 0 1 5, p et i t i o n er t i m el y fi l ed a p et i t i o n wi t h th i s Co u rt
s eek i n g rev i ew o f res p o nd en t ’ s d et erm i n at i o n . OnM arch 3 , 2 0 1 6 , 1 1 d ay s b efo re t ri al o f t hi s cas e, p et i ti o n er s ub m i t tedt o res p o n den tFo rm 4 3 3 -A, Co l lect i o n In fo rm at i o n St at em en tfo r W ag e Earn ers an dSel f-Em p l o y edIn d i v i du al s . In
s ect i on 4 o f t h atfo rm

s h e i n d i cat edth at s he m ai nt ai nedtwo ch eck i n g acco u n t s an d
a s av i n g s acco u n tth ath adt o t al co m b i n edb al an ces o f $ 6 1 2 , a m u tu al fu n dv al u ed at$ 2 8 , 38 2 , a p en s i o n p l an v al u edat$ 1 0,3 4 6 , an da s ect i o n 4 0 1 (k ) p l an v al u edat $ 1 7 ,0 6 6
. Al s o i n s ect i o n 4 o f thatfo rm , p et i t i o n er i n di cat edth ats h e o wn ed(1 ) a
s i ng l e-fam i l y

h o m e v al u edat$ 2 7 0 ,0 0 0 wi t h res p ectt o wh i ch th ere was an
o u t s t an d i n g m ort g ag e b al an ce o f $ 1 0 0 , 0 9 8 , (2 ) a 2 0 0 6 M erced es Ben z- 1 2 -

[* 1 2 ] v al u edat$ 5 ,0 5 8 wi t h res p ectt o wh i ch t h ere was an o ut s t an d i ng l o an b al an ce o f $ 5 ,5 9 3 , (3 ) a “ fam i ly ro o m s et ” v al u ed at$ 1 ,5 0 0 , an d(4 ) a “ b ed ro o m
s et ” v al u edat $1 ,5 0 0 . Ins ect io n 5 o f t h atfo rm p et i t i o n er l i s t edv ari o us m o n t h l y i n co m e an d l i v i n g ex p en s e i t em s . W i t h res p ectt o th e m o nt h l y i n co m e i t em s , s h e i n d i cat edth ats h e h adt o t al m o n t h l y i nco m e o f $ 8 , 3 3 3 , co ns i s t i n g o f h er wag es o f $ 8 ,3 4 1 an di n t eres tan d d i v id en d s o f $ 8
. 2 W i t h res p ectt o th e m o n t h l y l i v i n g
ex p en s e i t em s, s he i n d i cat edth at s he h ad t o t al m o n t h l y l i v in g ex pen s es o f $ 8 ,5 1 4 , co n si s t i n g o f fo o d , cl o th i n g , h o u s ek eep i n g s up p l y , p ers o n al care p ro du ct , an d
m i s cel l an eo u s ex p en s es 3 o f $ 3 , 1 7 5 , h o u s i n g an du t i l i t y ex p en s es o f $ 3 ,4 94 , v eh icl e o wn ers h i p ex p en s es o f $ 3 7 1 , v eh i cl e o perat i n g ex p en s es o f $ 4 46 , h eal t h i n s u ran ce ex p en s es o f $ 3 7 , l i fe i n s u ran ce p rem i u m ex p en ses o f $ 1 4 , s ecu redd eb t
ex p en s es o f $ 83 5, d el i n qu en tSt at e o r l o cal t ax ex p en ses o f $ 8 4 , an do t h er
ex p en s es o f $ 58
.

2 It ap p ears th atp et i t io ner m i s tak en l y s ub t ract edth e m on t h l y am o u n to f i n t eres tan dd i v i d en d s fro m the m on t h l y am o u n to f wag es , rat h er t h an ad d i n g the t wo m o n t h l y

i n co m e i t em s, t o co m e up wi t h t o t al m o nt h l y i n co m e o f $ 8 ,3 3 3
. 3 So -cal l edm i s cel l an eo u s ex p en s es are t h o se l iv i n g ex p en ses th atare n o t i n cl u d edi n an y

o t h er cat eg o ry

o f l i v i n g ex p en s e i t em s s h o wni n s ec. 5 o f t h e fo rm , s u ch as cred i t cardp aym en t s , b an kfees an dch arg es , read i n g m at eri al , an ds ch o o l s up p li es .- 1 3 -

[* 1 3 ] As o f t h e t i m e o f t ri al p et i t i o n er was em p l oy edas a co n su l t an tb y U.S. Cel l u l ar Co rp . an dh er h u s b an dwas u n em p lo y ed , a s i tu at i o n h e h adb een i n fo r t h e p as tfi ve y ears fo r wh ich s h e h adkn o wnh i m . Her an nu al s al ary atth att i m e was ap p ro x i m at el y $ 1 1 0,0 0 0
. OPINION Gen eral ly , m arri ed t ax p ay ers m ay el ectt o fi l e a jo i n tFed eral i n co m e t ax retu rn . Sec. 6 0 1 3 (a). If a jo in t retu rn i s m ad e, t he t ax i s co m p u t edo n t h e s p o u s es ’ ag g reg at e i n co m e, an d each s p o u s e i s fu l l y res p o n s i b le fo r t he accu racyo f t h e retu rn an di s jo i n t ly

an ds ev eral l y

l i ab l e fo r t h e en t i re am o un to f t ax s h o wno n th e retu rn o r fo u n dt o b e o wi n g . Sec. 6 0 1 3 (d )(3 ); Bu t l er v . Co m m i s si o n er, 1 1 4 T.C. 2 7 6 , 2 8 2 (2 0 0 0). Nev ert h el es s , u n d er cert ai n ci rcu m st an ces , a s po u se wh o h as
m ad e a jo i n t retu rnm ay

s eek rel i ef fro m

jo i n t an ds ev eral l iab i li t y u n d er p ro cedures s et fo rt h i n s ect i o n 6 0 1 5 . Sec. 6 0 1 5 (a). Sect i o n 6 0 1 5 p ro vi d es a
s p o u se wi t h t h ree al t ern at i v es : (1 ) fu l l o r p art i al rel i ef u n d er 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 ub sect i o n (c), an d (3 ) i f rel i ef i s n otav ai l ab l e u n d er
s ub s ect i o n (b ) o r (c), eq ui t ab l e rel i ef u nd er s ub s ect i o n (f). Res p o n d en tco n s i d ered p et it i on er’ s en t i t l em en tt o rel ief fro m jo i n tan d
s ev eral l iab i l i t y

u n d er each al t ern at i v e, an dwe h av e ju ri sd i ct i o n t o d o th e s am e. See s ec. 6 0 1 5 (e)(1 ). In d oi n g s o , we ap p l y a d e n o v o s t an d ardo f rev i ew, as wel l- 1 4 -

[* 1 4 ] as a d e n o v o s co p e o f rev i ew. Po rt er v . Co m m i s s i o ner, 1 3 2 T.C. 2 0 3 , 2 1 0 (2 0 0 9). Gen eral l y , th e b u rd en o f p ro o f i s o n t h e t ax p ay er i n a cas e i n v o lv in g rel i ef fro m jo i ntan ds ev eral l i ab i li t y ex cep t as o t h erwi s e p ro v i dedi n s ect i o n 6 0 15 . See Ru l e 1 4 2 (a); Po rt er v . Co m m i s s i o n er, 1 3 2 T.C. at2 1 0; Al t v . Co m m i s si 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 t h Ci r. 2 0 0 4 ); J o n s o n v . Co m m i s s i o n er, 1 1 8 T.C. 1 0 6 , 1 1 3 (2 0 0 2), aff’ d, 3 5 3 F.3 d1 1 8 1 (1 0 t h Ci r. 2 0 0 3 ). In o rd er t o b e en t it l edt o rel i ef u nd er s ect i o n 6 0 1 5 (b ), th e s p o u s e wh o req u es t s th atrel i ef (req u es t i n g s p o u s e) m u s ts at i sfy

th e fo l l o wi n g co n d i t i o n s : (1 ) a jo i n t retu rn h as b een m ad e fo r a t ax ab l e y ear; (2 ) o n s u ch retu rn th ere i s an
u n d ers t at em en to f t ax at t ri b u t ab l e t o erro n eo us i t em s o f t he n o n req u es ti n g s p o u s e; (3 ) t h e req u es t i n g s p ou s e d i dn o tkn o w an dh ad n o reas on t o kn o w o f t h e
u n d ers t at em en tatth e t i m e t h e ret u rn was s i g n ed ; (4 ) t ak i n g i nt o acco u n tal l fact s
an d ci rcu m s t an ces , i ti s i n equi tab l e t o h o l dth e requ es t i n g s p o u s e l i ab l e fo r t h aty ear’ s d efi ci en cy

i n t ax at t ri b u t ab l e t o s u ch u n d ers t at em en t ; an d (5 ) t h e req u es t i ng s p o u s e t im el y el ect s rel i ef u nd er s ect i o n 6 0 1 5 (b ). Sec. 6 0 1 5 (b )(1 ). Th es e co nd i ti o n s are s t at edi n t h e co n ju n ct i v e, an dthu s a fai l u re t o m eetan y o n e
o f t h em p recl u des t h e req u es t i n g s p ou s e fro m b ei n g en t i t ledt o rel i ef u n d er s ect i o n 6 0 1 5 (b ). Al t v . Co m

m i s s io n er, 1 1 9 T.C. at3 1 3 ; M cCl el l an dv . Co m m i s s i o n er, T.C. M em o . 2 00 5 -1 2 1 , s l i p o p . at9
.- 1 5 -

[* 1 5 ] Sect i o n 6 0 1 5 (c) p erm i t s a req u es t in g s p o u s e t o s eekrel i ef fro m jo i n tan d
s ev eral l iab i l i t y

b y el ect i n g t o al l ocat e t o t h e n o n req u es t in g s p o u s e th e p o rt i o n o f t h e d efi ci en cy

at t ri b u t ab l e t o th e n o n req ues t i n g s po u s e i f th e fo l lo wi n g co n d i t i on s
are s at i s fi ed : (1 ) a jo i nt retu rn h as b een m ad e fo r a t ax ab le y ear; (2 ) at t he t i m e o f t h e el ect io n , th e req u es t i n g s p ou s e was s ep arat edo r d i v o rcedfro m th e
n o n req u es ti n g s p ou s e o r h ad n o tb een a m em b er o f t h e s am e h o u seh o ldas th e
n o n req u es ti n g s p ou s e atan y t i m e du ri n g t h e 1 2-m o n t h p eri o den di n g o n th e d at e
o f t h e req u es t fo r rel ief; an d (3 ) t he req u es t i n g s p o u s e t i m el y el ect s rel i ef u n d er
s ect i on 6 0 1 5 (c). Ho w ev er, i f t h e Co m m i s s io n er d em o n s t rat es th atth e req u es t i n g
s p o u se h adactu al kn o wl ed ge, atthe t i m e o f s ig n in g th e retu rn , o f t h e
n o n req u es ti n g s p ou s e’ s i t em o r i t em s g i v i n g ri s e t o th e d efi ci en cy (o r p o rt i o n t h ereo f), t h e req ues t i ng s p o u se i s n o ten t it l edt o rel i ef u n d er s ect i o n 6 0 1 5 (c) wi t h
res p ectt o t h atd efi ci en cy (o r p o rt i o n th ereo f). Sec. 6 0 1 5 (c)(3 )(C). Pet i t i o ner i s n o t cl ai m in g rel i ef fro m jo i n tan d s ev eral l i ab il i ty wi t h res p ect t o the fu l l am o u nt s o f t h e d efi ci en ci es fo r t he 2 0 0 7 an d2 0 0 8 t ax ab l e y ears ; s h e i s cl ai m i ng rel i ef o n l y

fo r th e p ort i o n s o f t h e d efi ci en ci es fo r t h o s e y ears th atare at t ri b u t ab l e t o th e g am

b li n g l os s es th atth e M an n s cl ai m edo n th ei r Sch edu l es A fo r t h o s e y ears .- 1 6 -

[* 1 6 ] Onth e reco rdb efo re u s , we fi n dth atp et i t io n er h as fai l edt o carryh er b u rd eno f es t ab l is h in g thats h e d i dn o tkn o w o r h av e reas o n t o kn o w th atth ere
were u n d ers t at em en ts o f t ax at t h e t i m e s h e s i g n edth e jo i n tretu rn s an dth at
res p o n d en t h as carri ed h i s b u rd en o f es t ab li s h i n g t h atp et i t i o ner h adactual kn o wl ed g e o f M r. M an n ’ s g am b l i n g l o s s es atth e t i m e s h e s i g n edth e jo in tretu rn s . Pet i t io n er, n o tM r. M an n , p rep aredeach o f t h e jo i n t retu rn s. 4 Pet i t i on er recei v ed i n the m ai l at t h e M an ns ’ h o m e t h e t ax -rel at edi n fo rm at i o n wi t h res pect t o th e 2 0 0 7 an d2 0 0 8 t ax ab l e y ears t h ats h e n eed edt o p rep are t h e jo in tretu rn s . Pet i t io n er t es t i fi edth atdu ri n g t h o s e y ears an dwh en s h e was p rep ari n g th e jo i n t retu rn s s h e was aware o f M r. M an n’ s g am b l in g h ab i t s an d h i s o u ts t an d i n g g am b l in g d eb t s . Atth e t i m e p et i t i on er s i g n edthe jo i n tretu rn s, s he h adn o m en t al
o r p h y s i cal h eal t h p ro b l em s wh i ch p rev en t edh er fro m b ei ng ab l e t o u nd ers t an dth e
co n ten t s o f t h o s e retu rn s . Acco rd i n g l y , p et i t i o n er i s n o ten t i t l edt o rel i ef u n d er
s ect i on 6 0 1 5 (b ) o r (c) fo r t h e 2 0 0 7 o r 2 0 0 8 t ax ab l e y ear.

4 Onth e jo i n t retu rn s t h e M an n s cl ai m edg am bl i n g l o s s es o n two d i fferen t l i nes o n th ei r Sch edu les A fo r t h e 2 0 0 7 an d2 0 0 8 t ax ab l e y ears . Pet i t i o n er t es t i fi ed t h ati n cl ai m i n g g am

b l in g l os s es o n t wo d i fferen tl in es o n t hes e s ch edu l es , s h e m ay h av e d o ub l e co u n t ed t h e s am e g am b l i n g l o s s . If i n fact p et i t i o n er d i d d o ubl e co u ntth e s am e g am

b l i n g l o s s , s h e h ad kn o wl ed g e t h ats h e was o v ers t at i n g th e res p ect i ve am o u nt s o f g am bl in g l o s s es th atM r. M an n h adi n cu rred
.- 1 7 -

[* 1 7 ] Wh ere rel i ef i s n o t av ai lab l e u n d er s ect i o n 6 0 1 5 (b ) o r (c), s ect i o n 6 0 1 5 (f) g ran t s th e Co m

m i s si o n er t h e d is cret i o n t o rel i ev e a req u es t i n g s p o u s e o f jo i n t l i ab i l i t y if, t ak in g i nt o acco u n t al l th e fact s an d ci rcu m s t an ces , i two u l db e i n equ i t ab l e t o h o l d t h e req u es t in g s p o u se l iab l e fo r t h e u np ai dt ax o r d efi ci en cy o r
an y p o rt i on th ereo f. Ad d it i o n al l y , s ect i o n 6 0 1 5 (f) au t ho ri zes g ran t i n g s u ch equ it ab l e rel i ef “ [u ] n der p ro cedu res p res cri bedb y th e Secret ary ”. Fo r req ues t s fi led on o r aft er Sep t em

b er 1 6, 2 0 1 3 , an dfo r req u es t s p en d i ng i n an y Fed eral co urt
o n o r aft er Sep t em

b er 1 6 , 2 0 1 3 , Rev . Pro c. 2 0 1 3-3 4 , 2 0 1 3 -4 3 I.R.B. 3 9 7, p res cri bes th e g u i d el i n es th atth e IRS wi l l co ns i d er i n d et erm i n i n g wh et h er equ it ab l e rel i ef i s ap pro pri at e. Al t h o u g h we are n o tb o u n db y th em , s i n ce t h ey

are ap p li cab l e i n th i s cas e we wi l l an al y ze p et i t i o ner’ s req u es tu n der t h es e g u i d el i n es t o as cert ai n wh et h er s h e s at i s fi es th e req u irem en t s fo r rel i ef u n d er s ect i o n 6 0 1 5 (f). See Ag u d el o v . Co m

m i s s io n er, T.C. M em o . 2 0 15 -1 2 4, at* 1 7 -* 1 8 ; W o rkv . Co m m i s s i o n er, T.C. M em o . 2 0 1 4 -1 9 0 , at* 2 1 -* 2 2
. Rev . Pro c. 2 0 1 3 -3 4 , s up ra, s et s fo rt h s ev ens o -cal l edth res h o l d co n d i t i o n s (t hres h o l dco n d i t io ns ) t h atm u stb e s at i s fi edi n o rd er fo r t he req ues t i n g s p o u s e t o b e el i g i b l e fo r eq u i t ab l e rel i ef u n d er s ect i o n 6 0 15 (f). Res p o n den td o es n o td i s p u t e t h atp et i t i o n er s at i s fi es al l o f t h o s e t hres ho l dco n d i ti o n s .- 1 8 -

[* 1 8 ] Wh ere, as h ere, t he p art i es ag ree t h atth e t hres h o l d co n d i t i on s are s at i s fi ed , Rev
. Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 2 , 2 0 1 3 -4 3 I.R.B. at4 0 0 , s et s fo rt h ci rcu m s t an ces
u n d er wh i ch t h e IRS wi ll m ak e a s t ream l i n edd et erm i nat i o n g ran t i n g equ i t ab l e rel i ef t o th e requ es t i n g s p ou s e u n d er s ect i o n 6 0 1 5 (f). Th e req u es t i n g s p ou s e i s el i g i b l e fo r a s tream l i n ed d et erm i n at i o n b y t h e IRS g ran t i n g equ i t ab l e rel i ef u n d er Rev
. Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 2 , o n l y i n cas es i n wh i ch th at s po u s e es t ab l i s h es th at t h ats p o u s e (1 ) i s n o l o n ger m arri edt o the n o n req u es ti n g s p o u se (m ari tal s t atu s el em en t ), (2 ) wo u l ds u ffer eco n o m i c h ard sh i p i f n o t g ran tedrel i ef (eco n o m i c h ard s h i p el em en t ), an d(3 ) d i dn o tkn o w o r h av e reas o n t o kn o w ab o u tth e i t em o r i t em s g i v i n g ri s e t o th e u nd ers t at em en to r d efi ci en cy o n t h e jo i n ti n co m e t ax retu rn (kn o w l ed g e el em en t ). See i d . Iti s u n d is p u t edi n th i s cas e t h atth e m ari t al s t atu s el em en th as b een es t ab l i s h ed . Ho wev er, b ecau s e o f o u r fi n d in g ab o v e t h at p et i t i o n er kn ew, o r h ad reas o n t o kn o w, ab o u tth e i tem s g i v i n g ri s e t o th e d efi ci en ci es fo r t he 2 0 0 7 an d 2 0 0 8 t ax ab le y ears , th e kn o wl ed g e el em en th as n o t b een es t ab l i sh ed , m ak i n g h er i n el i g i b l e fo r a s t ream l i nedd et erm i n at i o n . 5

5 In th e l i g h t o f o u r fi n d i n g wi th res p ectt o t h e kn o wl ed g e el em en t , we n eed n o tad dres s wh et her t h e eco n o m i c h ard s hi p el em en th as b een es t ab l i s h ed . See Rev
. Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 2 , 2 0 1 3 -4 3 I.R.B. 3 9 7 , 4 0 0 . Ho w ev er, i n co n s i d eri n g b el o w th e fact o rs s et fo rt h i n Rev . Pro c. 2 01 3 -3 4 , s ec. 4 .0 3 , we ad dres s wh et h er p et i t i o n er wo u lds u ffer eco n o m i c h ard s h ip i f eq ui tab l e rel i ef u n d er s ec. 6 0 1 5 (f) were n o t g ran t ed
.- 1 9 -

[* 1 9 ] Wh ere, as h ere, t he req u es t i n g s p ou s e s at i s fi es th e th res h o l dco n d it 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 t ream 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 ered i 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 equ it ab l e rel i ef u n d er s ect i o n 6 0 1 5 (f): (1 ) m ari t al s t atu s ; (2 ) eco n o m i c h ard s h i p ; (3 ) i n the cas e o f an u n d ers t at em en t , kn o wl ed g e o r reas o n t o kn o wo f t h e i t em o r i t em s g i v i n g ri s e t o th e u nd ers t at em en to r d efi ci en cy ; (4 ) l eg al o b l ig at i o n ; (5 ) s i gn i fi can t b en efi t ; (6 ) co m p l i an ce wi t h the i n co m e t ax l aws ; an d(7 ) m en t al o r p h y s i cal h eal t h o f t h e req u es ti n g s p o u s e. Al l o f t h es e fact o rs are t o b e wei gh t ed ap p ro p ri at el y , an dn o o n e fact o r i s d et erm i n at i v e. 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 8 (2 0 1 1 ); Kel lam v . Co m m i s s i o ner, T.C. M em o . 2 0 1 3 -1 8 6, at
* 2 6 . Acco rd i n g l y , we wi l l co n s i d er each i n tu rn . W i t h res p ect t o th e m ari t al s t atu s fact o r, the p art i es ag ree t h atatth e t i m e Ap p eal s m ad e t h e d et erm i n at i on s etfo rt h i n th e n o t i ce o f d et erm in at i o n , p et i t i o n er
was n o l o n ger m arri ed t o M r. M an n . Th e m ari t al s t atu s fact o r wei gh s i n fav o r o f rel i ef. See Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 3 (2 )(a). W i t h res p ect t o th e eco n o m i c h ard s h ip fact o r, i n d et erm i n i n g wh eth er a req u es t i ng s p o u s e wi l l s uffer eco n o m i c h ard sh i p i f rel i ef i s n o t g ran ted , Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 3 (2 )(b ), req u i res rel i an ce o n ru l es s i m il ar t o th os e p ro v id edi n- 2 0 -

[* 2 0 ] s ect i o n 3 0 1.6 3 43 -1 (b )(4 ), Pro ced . & Ad m in . Reg s . Th atreg u lat i o n g en eral l y p ro v i d es th atan i n d i v i du al s u ffers eco no m i c h ard s hi p i f t he i nd i vi du al i s
u n ab le t o p ay

h i s o r h er reas o n ab l e b as i c l i vi n g ex p en s es . Sect i o n 3 0 1.6 3 4 3
- 1 (b )(4 ), Pro ced . & Ad m i n . Reg s ., p ro vi d es i n p ert i n en tp art :

(i i ) In fo rm at io n fro m

t ax p ay er.--In d et erm i n i n g a reas o nab l e am o u ntfo r b as i c l i v i n g ex p en s es th e d i rect or wi l l co ns i d er an y i n fo rm at i o n p ro v i d edb y

th e t ax pay er i n cl u di n g -- (A) Th e t ax p ay er’ s ag e, em pl o y m en ts t atus an d h i s t o ry , ab i l i t y t o earn , nu m

b er o f d ep en d en t s , an d s tatu s as a d ep en d en to f s o m eo n e el s e; (B) Th e am o un treas o n ab l y n eces s ary fo r fo o d , cl o t h i n g , h o u s i n g (i n cl u di n g u ti l i t i es , h o m e-o wn er i n s uran ce, h om e-o wn er du es , an d t h e l i k e), m ed i cal ex pen s es (i n cl ud i n g h eal t h i n s u ran ce), t ran s p o rt at i o n, cu rren t t ax p aym en t s (i n cl u d i n g fed eral , s tat e, an d l o cal ), al i m on y , ch il ds up p o rt , o r o t h er co urt -o rd ered p aym en t s , an d ex p en s es n eces saryt o t h e t ax p ay er’ s p ro du ct i o n o f i n co m e (s u ch as du es fo r a t rad e u n i o n o r p ro fes s i o n al o rg an izat i o n , o r ch i l dcare p aym en t s wh i ch al lo w t h e t ax p ay er t o b e g ai nfu l l y em pl o y ed ); (C) Th e co sto f l i v i n g i n th e g eo g rap h i c area i n wh i ch th e t ax p ay er res i d es ; (D) Th e am o u n t o f p ro p ert y ex em p t fro m l ev y wh i ch i s av ai lab le t o p ay

th e t ax p ay er’ s ex p en s es ; (E) An y ex t rao rd i n ary

ci rcu m s t an ces s u ch as s p eci al edu cat i o n ex p en s es , a m ed i cal cat as t ro p h e, o r n atu ral d i s as t er; an d (F) An y o t h er fact o r t h atth e t ax p ay er cl ai m s b ears o n eco n o m i c h ard sh i p an db ri ng s t o th e at t en t i o n o f t h e d i rect o r.- 2 1 -

[* 2 1 ] In ad d i t io n , Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 3 (2 )(b ), requ i res thatth e IRS
co n si d er t h e req ues ti n g s p o u se’ s cu rren ti n co m e, ex pen s es , an d as s et s. See Rev
. Pro c. 2 01 3 -3 4 , s ec. 4 .0 3 (2 )(b ), 2 0 1 3 -4 3 I.R.B. at4 0 1 . Th ats ect i o n al s o req u i res t h atth e IRS (1 ) co m

p are t h e req u es ti n g s p o u s e’ s i n co m e t o th e Fed eral p o vert y g u i d el i n es fo r t h e req u es t i n g s po u s e’ s fam i l y s i ze an d(2 ) d et erm i n e b y h o w m u ch , i f an y , o f t h e req u es t i n g s p ou s e’ s m o n t h ly i n co m e ex ceed s th e s po u s e’ s reas o n ab l e b as i c m o n t h l y

l i v in g ex p en s es . See i d
. It is res p o n d en t ’ s p o si t i on th at“ wh en ex am i n i n g eco n o m i c h ard sh i p th ere
are n at i o n al s t an d ard s th atn eedt o b e m et* * * [an d ] th atth e reco rdi s cl ear t h at M s . Yan cey ’ s s i tu at i o n d o es n o tfal l i n to * * * th at s peci fi c cri t eri a fo r co n s t i tu t in g
an eco n o m i c h ard sh i p.” Onth e reco rdb efo re u s , we ag ree wi th res po n d en t ’ s p o s i t i o n i n th is reg ard
. Onth atreco rd , we h av e fo u n dfact s th ats up p o rtth atp o s i t i o n , i n cl ud i n g th e fo l l o w i n g . Pet i t i o n er’ s wag es an do t h er as s et s were s uffi ci en t t o p ay h er
reas on ab l e b as i c l i v i n g ex p en s es ; atthe t i m e o f tri al , h er an n ual s al ary was ap p ro x i m at el y $ 1 1 0,0 0 0 an d s he m ai n t ai n ed(1 ) a m u tu al fu n dv al u edat$ 2 8 ,3 8 3 , (2 ) a p en s i on p l an v al u ed at$ 1 0 ,3 4 6 , an d(3 ) a s ect io n 4 01 (k ) p l an v al u edat $ 1 7 ,0 6 6 . Pet i t i o n er wo u l dn ots u ffer eco n o m i c h ard s h i p i f rel i ef were n o tg ran t ed
. Th e eco n o m i c h ard s h i p fact o r i s n eu t ral . See i d
.- 2 2 -

[* 2 2 ] W i t h res p ectt o t h e kn o w l ed g e fact o r, we h av e fo u n dp rev i o u sl y i n
co n si d eri n g p et i t i o n er’ s en t i t l em en tt o rel i ef u n d er s ect io n 6 01 5 (b ) an d(c), as wel l
as co n si d eri ng the el em en t s al lo wi ng th e IRS t o m ak e a s tream l i n ed d et erm i n at io n
u n d er s ect i o n 6 0 1 5 (f), th ats h e kn ew, o r h adreas o n t o kno w, ab ou tth e i t em s g i v i n g ri s e t o th e d efi ci en ci es fo r t h e 2 0 0 7 an d 2 0 0 8 t ax ab l e y ears . Th e kn o wl ed g e fact o r wei g h s ag ai n s trel i ef. 6 See Rev
. Pro c. 2 0 1 3-3 4 , s ec. 4 .0 3 (2 )(c). W i t h res p ect t o th e l eg al o b l i g at io n fact o r, Rev . Pro c. 2 0 13 -3 4 , s ec. 4 .0 3(2 )(d ), p ro v i d es th atth atfact o r “ wi l l b e n eu t ral i f t he req u es t i n g s p o us e kn ew
o r h ad reas o n t o kn ow, wh en en t eri n g i n t o th e d i v o rce d ecree o r ag reem en t , th at t h e n o nreq u es ti n g s p o us e wo u l dn o tp ay t h e i n co m e t ax l i ab i l i t y . ” Al t h o u gh
res p o n d en t d o es n o td i s pu t e t h atu nd er t he d i v o rce d ecree M r. M an n i s

“ res p o n s i b le fo r an y

t ax l i ab i l i ty

as s es s edag ai n s t* * * [h i m ] an d* * * [p et i t i o n er]
as a res ul to f an y

jo i n t t ax return s fi l edfo r t he y ears du ri n g t h e m arri ag e”, i ti s
res p o n d en t’ s p o s i t i o n t h atatth e t i m e p et i t io n er en t eredi n t o th e d i v o rce d ecree s h e

“ was aware o f t h e n o n -requ es t i n g s p o u s e’ s g am b l in g an dfi n an ci al i s su es , an ds he h ad reas o n t o kno wth atn o n -req u es t i n g s p ou s e wo u l dn o tp ay th e l i ab il i t i es .” On t h e reco rdb efo re u s , we ag ree wi t h res p o n d en t ’ s p o s i t i o n i n t h i s reg ard
.

6 As s u m in g arg u en d o thatwe h adfo u n d t h atth e kn o wl ed ge fact o r fav o red rel i ef, t hatfi nd i n g wo u l dn otch an g e o ur u l t i m at e fi n di n g s etfo rt h b el ow as t o wh et h er p et i ti o n er i s en ti t l edt o equ i t ab l e rel i ef u n d er s ec. 6 0 1 5 (f).- 2 3 -

[* 2 3 ] Du ri n g atl eas t2 0 0 7 an d2 0 0 8 M r. M an n g am bl edex t en si v el y

atv ari o u s
cas i n o s . Duri n g th o s e y ears an dwh en s he was p rep ari n g th e jo i ntretu rn s , p et i t i o n er was aware o f M r. M an n’ s g am b l i n g h ab i t s an d h i s o u t s t an d in g g am b l in g d eb ts . Atth e t i m e p et i t i o n er en t ered i n to the d i v o rce d ecree, s h e was aware o f M r. M an n ’ s g am

b l i n g ad d i ct i o n . Thu s , we fi n dth atatth e t i m e p et i ti o n er en t eredi n t o t h e d i v o rce d ecree s h e kn ew o r h adreas o n t o kn o w th atM r. M an n wo u l d n o tp ay t h e d efi ci en ci es fo r t h e 2 0 0 7 an d2 0 0 8 t ax ab l e y ears . Th e l eg al o b l i g at i o n fact o r i s
n eu tral
. 7 See i d
. W i t h res p ect t o th e s i g n i fi can tb en efi tfact o r, there i s n o ev i d en ce t h at p et i t i o n er o r M r. M an n real i zedan y s ig n i fi can tb en efi tfro m th e u nd ers t at em en t s . Th e s ig n i fi can t b en efi t fact o r fav o rs rel i ef o r atwo rs ti s n eu t ral . See 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 ; Rev
. Pro c. 2 0 1 3 -3 4, s ec. 4 .0 3 (2 )(e). W i t h res p ect t o th e co m

pl i an ce fact o r, p et i t io n er d i dn o tfi l e a ret u rn fo r t he 2 0 1 4 t ax ab l e y ear d es p i t e h av i n g an o b l ig at i o n t o d o s o. In ad d i t i on , s he d i dn o t req u es to r recei v e an ex t en si o n o f t i m e wi t h i n wh i ch t o fi l e a ret urn fo r t hat

7 Th e fact th ati n 2 0 13 th e b an krupt cy co u rtad ju d i cat edM r. M an n b an krup t u n d er ch ap t er 7 i s d i s reg ard edi n d et erm in i n g wh et h er p et i t io n er h as th e s ol e l eg al o b l i g at i o n t o p ay

th e 2 00 7 an d2 0 0 8 l i ab il i t i es u nd er t h e l eg al o b li g at i o n fact o r. See 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.- 2 4 -

[* 2 4 ] t ax ab l e y ear. Th e co m pl i an ce fact o r wei g h s ag ai n s trel i ef. See Rev . Pro c. 2 0 1 3 -3 4 , s ec. 4 .0 3 (2 )(f)(i ). W i t h res p ect t o th e h eal t h fact o r, th ere i s n o ev i d en ce t h atp et i ti o n er was i n p o o r p hy si cal o r m en t al h eal t h atth e t i m e t h e jo i n t retu rn s were fi ledo r at t h e t i m e
s h e req u es t edrel ief u n d er s ect i o n 6 0 1 5
. Th e h eal t h fact or i s n eu t ral . See Rev
. Pro c. 2 01 3 -3 4 , s ec. 4 .0 3 (2 )(g ). Up o n t h e b as i s o f o u r ex am i n at i o n o f t h e en t i re reco rdb efo re u s, we fi n d t h atp et i t i o n er h as fai l edt o carryh er b u rd en o f es t ab li s h i n g th ati t wo u l db e i n equ i t ab l e t o h o l d h er l i ab le fo r t h e d efi ci en ci es fo r t h e 2 0 0 7 an d2 0 0 8 t ax ab l e y ears an dth u s t h at s he i s en t it l edt o rel i ef u n d er s ect i o n 6 0 1 5(f) wi t h res p ectt o t h o s e t ax ab l e y ears . W e h av e co n s id ered al l o f t h e arg um en t s m ad e b y t h e p art i es an d , t o th e
ex t en tth ey

are n o tad dres s edh erei n , we fi n dth em t o b e m o o t , i rrel ev an t, o r wi t h o 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
.