T.C. Mem o. 2 01 6- 66

UNITED STAT ES TAX COURT

LARRY O. AROBO AND SLET TA HUGH ES AROBO, Pet it io ne rs v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 29 98 1- 12
. Fi le d Ap ril 14 , 20 16
.
Glen E. Fros t, Mi ch ael Y. Goldbe rg , andJes si ca F. Ma rin e, fo r pe ti ti on er Larry O. Arob o. Jo hn B. Sn y de r, III, fo r pe ti ti on er Sl et taHug he s Aro bo
. Nan cy M. Gil m or e an d Dav idA. Ind ek , forres po nd en t.

MEMORANDUM FINDINGS OF FACT AND OPINION JAC OBS, Jud ge : Re sp on de nt(In te rn al Rev enue Serv ic e o r IRS) de te rm in edde fic ie nc ie s, ad di ti on s t o t ax an d p en al ti es ag ai ns t p et it io ne rs , hu sb an d
an d wi fe, fo r 20 04 , 20 05 , 20 06 , and20 07 (y ears in vo lv ed ), as fol lo ws:- 2 -

[* 2] Add it io ns to tax /p en al ti es Sec. Sec. Year Defi ci en cy 66 51 (a)( 1) 66 62 (a) 20 04 $1 68 ,03 9 $4 0,6 25 $3 3,6 08 20 05 22 4,1 93 53 ,06 4 44 ,83 9 20 06 18 6,8 64 42 ,56 5 37 ,37 3 20 07 67 ,51 0 11 ,88 0 13 ,50 2 Pet it io ne rs fil eda pe ti ti onforred et erm in at io n i n t hi s C ou rt. Th e p art ie s re ach eda se tt le m en t b efo re tria l an d fi le d ast ip ul at io n o f se tt le d i ss ue s, re so lv in g a ll is su es ex cep t wh ethe r Sl et taHug he s Aro bo is en ti tl edto rel ie f fro m joi ntan d s ev eral li ab il it y un de r se ct io n 6 01 5( b) an d (f ) fo r eac h year in vo lv ed . Unl es s o th erwi se in di cat ed , all sec ti on refe ren ces are t o t he Int ern al Rev enue Co de as a m en de d a nd in effe ctforth e y ears in vo lv ed . All R ul e ref eren ces are t o t he Tax C ou rt Rul es of Prac ti ce an d P ro cedur e. All do ll ar am ou nt s ar e ro un de d t o t he ne ares t d ol la r. FINDINGS OF FACT So m e o f th e fac ts in vo lv in g t he rem ai ni ng is su e p res en te d i n t hi s ca se are st ip ul at edan d a re s o fo un d. Pet it io ne rs res id edin Marylan d a t t he ti m e th ey fil edth ei r pe ti ti on . Thei r m arri ag e h as see n i ts “up s an d d own s” . Peti ti on ers bri efl y sep arat ed ; atan un di sc lo se d d at e in 20 04 th ey reco nc il edan d re su m edli vi ng to ge th er. At al l rel ev an t t im es , Larry

O. Arob o was th e fam il y ’s pri m ary fin an ci al pro vi de r.- 3 -

[* 3] Mrs . Arob o h ol ds anass oc ia te ’s deg ree i n m erch an di si ng bu t h as no bu si ne ss ex pe rie nc e. Sh e was em pl oyed b y Publ ic Sch oo l Em

pl oyees’ Ch il d Dev el op m en t Pr og ram

in 20 04 an d 2 00 5; Help in g Han ds Enri ch m en t i n 2 00 4; an d Howar d C ou nt y

Publ ic Sch oo ls (HCPS) in 20 05 , 20 06 , and20 07 . For HC PS, s he
worke d a s a p ro fes si on al in st ru ct io na l as si st an t i n a n a lt ern at iv e educ at io na l pr og ram forat- ris k c hi ldren who st ru gg le d wi th po oratt en da nc e, lo w gra de s, an d si m il ar i ss ue s. Sh e earne d $ 26 ,66 5 i n 2 00 4, $ 15 ,91 6 i n 2 00 5, $ 16 ,49 0 i n 2 00 6,
an d $ 21 ,54 9 i n 2 00 7. Mr s. Aro bo ha s n ev er t ak enanacco un ti ng co ur se , no r do es sh e h av e an y

acco un ti ng ex pe rie nc e. Her em pl oym en t h as alwa y s b eenin th e educ at io n fi el d. Mr s. Aro bo ’s on ly oth er t ax ab le in co m e was in te res t i nc om e o f $1 9, $ 13 , and$2 1 fo r 20 04 , 20 05 , and20 07 , res pe ct iv el y . Mr. Aro bo was t he so le own er o f Cap it al Mark et s, LLC, a m ortg ag e or ig in at io n c om

pa ny du rin g the y ears in vo lv ed . The co m pa ny hadnu m ero us ba nk
acco un ts . It ce as eddo in g b us in es s i n 2 00 8. Mr s. Aro bo was n otin vo lv edinth e op erat io n o f th e co m

pa ny. Dur in g t he y ears in vo lv edMrs . Arob o h adhe r own ch eck in g a ndsav in gs acco un ts ; M r. Arob o h adhi s o wn ch eck in g a cco un t. Inad di ti on , pet it io ne rs ha d two joi ntba nkacco un ts . Mr. Aro bo reg ul arl y bo rro wedm on ey

fro m Mrs . Arob o to pa y th os e o f hi s co m

pany’ s v en do rs who wou lddo bu si ne ss on ly in ca sh . Mrs .- 4 -

[* 4] Arob o o bt ai ne d the cas h fr om he r se pa rat e b an k a cco un ts . Mr. Aro bo rep ai d hi s wi fe b y

ch eckdra wn ei th er o n o ne of h is co m pa ny’ s ac co un ts or o n h is in di vi du al acco un t. Pet it io ne rs joi nt ly own t he m ari ta l h om e, whi ch Mrs . Arob o i nh eri te d fr om he r pa ren ts . The h ou se was s ub ject t o am ortg ag e atth e ti m e o f th e in he rit an ce. Pet it io ne rs refi na nc edth e h ou se in 20 04 an d t oo k o uta se co ndm ortg ag e in 20 07
. The m on th ly m ortg ag e p aym en t o n t he ho us e fro m 20 04 to th e p res en t ra ng ed fro m $1 ,40 0 t o $ 1,8 00 . The m ortg ag e o n the ho us e p res en tl y is in for ecl os ur e. Mr. Aro bo dri ve s a 1 99 9 M erce de s v eh ic le , andMrs . Arob o driv es a 20 00 BMW. Pet it io ne rs ha ve two daug ht ers . Duri ng th e y ears in vo lv edth e el de r daug ht er at te nd edco ll eg e. Asi de fro m sp en di ng m on ey

whi le att en di ng co ll eg e, pe ti ti on ers di d n otpro vi de th atdaug ht er wi th fin an ci al supp ort. Pet it io ne rs ’ y ou ng es t d au gh te r atte nd edpubl ic sch oo l. Mrs . Arob o p ai d t he ho us eh ol d b il ls . Mr. Aro bo reg ul arl y gave Mrs . Arob o ch eck s drawnon hi s i nd iv idua l ac co un t o r on on e o f th e co m pa ny’ s ac co un ts to pa y ho us eh ol d e xp en se s an d/ orth e m ortg ag e. Pet it io ne rs ’ Fed eral in co m e ta x re tu rnforeach y ear i nv ol ve d was fil edlat e. Pet it io ne rs ’ in co m e ta x re turnfor20 04 was fi le d o n J anua ry 19 , 20 10 . The IR S
co m m en cedanau di t o f th atreturn i n Oct ob er 2 01 0. Pe ti ti on ers fil edth ei r 20 05- 5 -

[* 5] in co m e ta x re tu rnon Feb ru ary 25 , 20 11 , andth ei r 20 06 an d 2 00 7 i nc om e ta x returns on Marc h 2 , 20 11 , whi le th e 2 00 4 re tu rnwas u nd er au di t, thr ou gh th e IRS
ex am in in g a ge nt . Mr. Aro bo was re sp on si bl e fo r th e p rep arat io n a ndfil in g o f pe ti ti on ers ’ in co m e ta x re tu rn s. Mr s. Aro bo di d n otrev ie w th e returns ; ra th er, s he

“ en tru st edhe r hu sb an d a ndjus t s ig ne d t he m ”. Sh e te st ifi edth atsh e le arn edth at Mr. Aro bo ha d fa il edto fil e th ei r 20 04 , 20 05 , 20 06 , and20 07 tax returns on ly whe n the y

were co nt act edby the IRS. The 20 04 an d 2 00 5 i nc om e ta x re tu rn s ea ch rep orte d o n the fir stpa ge , on li ne 12 , a bu si ne ss lo ss an d n eg at iv e ad jus te d g ro ss in co m e. The 2 00 6 a nd20 07 in co m e ta x re tu rn s re po rte d a dju st edgro ss in co m e o f $5 2,1 63 an d $ 32 ,04 9,
res pe ct iv el y ; n o b us in es s i nc om e o r lo ss was re po rte d o n, an d n o S ch edul e C, Pro fitor Lo ss Fro m

Bu si ne ss , was at ta ch edto , eit he r th e 2 00 6 re tu rnor the 20 07 ta x re turn . Eachy ear’s t ax return re fle ct eda ta x o ve rp aym en t.

1 The IRS ex am in in g a ge ntex pa nd edhi s au di t o f pe ti ti on ers ’ 20 04 tax return to in cl ud e p et it io ne rs ’ 20 05 , 20 06 , and20 07 tax returns . The ag en t re vi ewedth e

Pet it io ne rs att ach edSch edul es C-EZ, Net Pr of itFro m Bu si ne ss , to th ei r 1 20 06 an d 2 00 7 t ax returns reg ard in g P rimrose Tit le /S et tl em en t Se rv ic es , a no ta ry se rv ic es co m

pany tha t M r. Arob o o wne d. Th es e Sch edul es C-EZ rep orte d n o gr os s re cei pt s o r expe ns es .- 6 -

[* 6] Sch edul es C at ta ch edto pe ti ti on ers ’ 20 04 an d 2 00 5 i nc om e ta x re tu rn s. Th e 20 04 an d 2 00 5 S ch edul es C rep orte d t he fol lo win g: Year Gro ss rece ip ts Tot al ex pe ns es Net l os s 20 04 $4 92 ,70 8 $5 52 ,73 2 $5 8,3 01 20 05 50 8,4 31 621 ,23 8 12 5,7 51 The IRS ag en t d oubt edth e co rrec tn es s o f th e am ou nt s o f in co m e rep orte d
on th e returns . Beli ev in g the am ou nt s o f in co m e rep orte d t o b e u nd ers ta te d, t he ag en t re co ns tru ct edCap it al Mark et s’ gro ss rece ip ts us in g t he ba nkde po si ts
m etho d. Th e ag en t d et erm in edth atpe ti ti on ers un de rrep orte d C ap it al Mark et s’ gr os s re cei pt s, as well as p et it io ne rs ’ di vi de ndin co m e, as fol lo ws: Year Unr ep orte d g ro ss rece ip ts Unr ep orte d d iv id en d i nc om e 20 04 $4 11 ,62 4 -0- 20 05 44 3,2 16 -0- 20 06 47 1,4 60 $4 6,0 30 20 07 17 2,8 50 38 ,40 0 Pet it io ne rs fai le d t o s ub st an ti at e th ei r rep orte d b us in es s ex pe ns es . There fo re, the IRS d is al lo wedde du ct io ns forall th es e ex pe ns es . On Se pt em

be r 14 , 20 12 , th e IRS is su edpe ti ti on ers a no ti ce o f de fic ie nc y for th e y ears in vo lv ed . On Dece m be r 12 , 20 12 , pet it io ne rs fil eda pe ti ti on in th is Co urt s eek in g re de te rm in at io n o f th e d efi ci en ci es de te rm in edby the IRS. On- 7 -

[* 7] Sep te m

be r 30 , 20 15 , th e p art ie s fi le d ast ip ul at io n o f se tt le d i ss ue s ag reei ng th atCap it al Mark et s’ gro ss rece ip ts were u nd erre po rte d a s fo ll ows : Year Agr eedun de rrep orte d g ro ss rece ip ts 20 04 $2 97 ,47 3 20 05 16 1,1 02 20 06 30 6,4 22 20 07 60 ,31 9 Fu rth er the IRS ag reedth atCap it al Mark et s was en ti tl edto Sch edul e C d educ ti on s of $5 7,3 14 for20 04 an d $ 17 5,8 15 for20 05 , res pe ct iv el y , andth atpe ti ti on ers were en ti tl edto de du ct io ns onSch edul e A, Ite m iz edDedu ct io ns , of $ 17 ,34 8 fo r 20 04 , $1 6,5 71 for20 05 , $1 9,9 82 for20 06 , and$1 6,6 47 for20 07 , res pe ct iv el y . Upo n the reco m

m en da ti on of M r. Arob o’s at to rn ey , Mrs . Arob o p rep areda Fo rm 88 57 , Reque stforInn oc en t Sp ou se Rel ie f, whi chsh e si gn edonJan ua ry 19 , 20 15 . She subm it te d t he form to th e IRS on anun sp eci fie d d ay th atm on th . Mrs . Aro bo tes ti fie d t ha t wh ensh e subm it te d F orm 88 57 sh e d idno t kno w th e p ro gr es s of pe ti ti on ers ’ cas e in th is Co urt. Mr . Arob o t es ti fie d t ha t re cen tl y he ha d fo un d
em pl oym en t wi th a fi na nc ia l co m pa ny, whi ch he an ti ci pa te s wi ll pro vi de hi m with fu nd s t o p ay

pe ti ti on ers ’ ou ts ta nd in g i nc om e ta x l iabi li ti es .- 8 -

[* 8] OPINION I. Sect io n 6 01 5( b) Rel ie f 1. In tro du ct io n Inge ne ral , m arri edtax pa y ers who fil e a joi ntFed eral in co m e ta x re tu rn un de r th e p ro vi si on s o f se ct io n 6 01 3( a) an d (d )(3 ) are joi nt ly andsev eral ly liab le fo r th e ta x re po rte d o r rep ortabl e o n t he tax return. Se ct io n 6 01 5( a)(1 ) pr ov id es th ata sp ou se who ha s m ad e a joi ntreturn m ay ele ctto see k re li ef fro m

joi ntan d
se ve ral li ab il it y

un de r subs ect io n (b ). Sect io n 6 01 5( b) (1 ) pr ov id es th ata ta xp ay er wi ll be rel ie ve d o f li ab il it y for
anun de rs ta te m en t o f ta x i f: (A) a joi ntreturn was m ad e fo r th e ta xabl e y ear i n qu es ti on ; (B ) th ere i s an un de rs ta te m en t o f ta x a tt rib ut ab le to erro ne ou s i te m s o f th e n on reque st in g s po us e; (C) the reque st in g s po us e “ es tabl is he s t ha t i n s ig ni ng th e return h e o r sh e d idno t kno w, andha d n o re as on to kn ow, tha t the re was su ch
un de rs ta te m en t” ; (D) t ak in g i nt o a cco un t al l t he fact s an d c irc um st an ces , itwou ld be in equi tabl e to ho ldth e reque st in g s po us e li ab le forth e d efi ci en cy att rib ut ab le to th e u nd ers ta te m en t; an d (E) th e reque st in g s po us e el ect s t o i nv ok e subs ect io n (b ) wit hi n t wo years a fte r th e d at e th e Sec ret ary ha s b eg unco ll ect io n a ct io ns with
res pe ctto th e reque st in g s po us e.- 9 -

[* 9] The requi rem en ts of s ect io n 6 01 5( b) (1 ) are co nju nc ti ve . Fail ur e o f a reque st in g s po us e to sat is fy an y on e o f th e el em en ts pre cl ud es rel ie f. Altv. Co m m is si on er, 1 19 T.C. 30 6, 3 13 (20 02 ), aff’d, 1 01 F. App ’x 34 (6t h C ir. 2 00 4)
. The reque st in g s po us e b ears th e b ur de n o f pr ov in g e nt it le m en t t o s ect io n 6 01 5( b) rel ie f so ug ht . Id. at31 1. Res po nd en t co nc ed es th atMrs . Arob o s at is fie s t he requi rem en ts of s ect io n 60 15 (b )(1 )(A), (B) , and(E), bu t as se rts sh e d oe s n otm eetth e requi rem en ts of
subp arag rap hs (C) (wh ethe r th e reque st in g s po us e es tabl is he d t ha t s he /h e d idno t kn ow, an d h adno reas onto kn ow, the re was anun de rs ta te m en t i n i nc om e ta x) an d (D) (wh ethe r itwou ldbe in equi tabl e to ho ldth e reque st in g s po us e li ab le forth e de fic ie nc y ). Becaus e we ag ree wi th res po nd en t tha t t he requi rem en ts of s ect io n 60 15 (b )(1 )(C) ha ve no t b een m et , we do no t ad dr es s t he requi rem en ts of
subp arag rap h (D)
. 2. Sec. 6 01 5( b) (1 )(C) Reas on To Kn ow A tax pa y er wh o s ig ns a return i s g en eral ly charg edwith c on st ru ct iv e kn owl ed ge of i ts co nt en ts . Port er v . Comm is si on er, 1 32 T.C. 20 3, 2 11 -2 12 (2 00 9) . Sect io n 6 01 5( b) (1 )(C) requi res th atth e sp ou se reque st in g re li ef m us t- 10 -

[* 10 ] est ab li sh th athe /s he di d n otkn ow, an d h adno reas on to kn ow, o f th e un de rs ta te m en t o f ta x o n t he returns . 2

“ An i nd iv idua l h as reas on to kn ow o f th e u nd ers ta te m en t i f a rea so nabl y prud en t t ax pa y er i n h er p os it io n a t t he ti m e sh e si gn edth e return c ou ldbe
ex pe ct edto kn ow t ha t t he return c on ta in edth e u nd ers ta te m en t.” Ho pk in s v . Co m m is si on er, 1 21 T.C. 73 , 77 (20 03 ); s ee s ec. 1 .60 15 -2 (c), In co m e Tax Reg s. Co ns eque nt ly, th e reque st in g s po us e h as a “ du ty of in qu iry” with res pe ctto th e in co m e ta x re tu rnfil ed . But le r v. C omm is si on er, 1 14 T.C. 27 6, 2 83 -2 84 (20 00 ). The du ty of in qu iry is s ub jecti ve , foc us in g o n t he in di vi du al see ki ng rel ie f. Sm it h v. Co m m is si on er, T.C. Mem o. 2 00 9- 23 7. Fa ct or s t o b e co ns id eredin m ak in g t hi s de te rm in at io n a re: (1) th e reque st in g s po us e’s le ve l o f educ at io n; (2) th e reque st in g s po us e’s in vo lv em en t i n t he fam il y ’s bu si ne ss an d fi na nc ia l af fai rs ; (3 ) th e p res en ce o f ex pe nd itur es th atap pe ar l av is h o r un us ua l wh enco m pa redto th e fam il y ’s pas t l ev el s o f in co m e, st an da rdof l iv in g, an d s pe nd in g p at te rn s; an d (4 ) th e cu lp ab le sp ou se ’s eva si ve ne ss an d d ecei t co nc ern in g t he co up le ’s fin an ces . See Haym anv. Co m m is si on er, 9 92 F.2d12 56 , 12 61 (2dCir . 19 93 ),

“ The requi rem en t i n s ect io n 6 01 5( b) (1 )(C) * * * i s v irtua ll y id en ti cal to th e 2 sa m e requi rem en t o f fo rm er s ect io n 6 01 3( e)(1 )(C) ; t he refo re ca se s i nt erp ret in g fo rm er s ect io n 6 01 3( e) re m ai n i ns tru ct iv e to ou r an al y si s.” Do y le v. Co m m is si on er, T.C. Mem o. 2 00 4- 35 , 20 04 W L 23 80 22 , at * 8.- 11 -

[* 11 ] aff’g T.C. Me m o. 1 99 2- 22 8. We bel ie ve Mrs . Arob o h adreas on to kn ow o f th e u nd ers ta te m en t o f ta x o n p et it io ne rs ’ returns foreach y ear i nv ol ve d. Pet it io ne rs fil edeach of t he 20 04 , 20 05 , 20 06 , and20 07 tax returns m an y y ears la te . W he n p et it io ne rs ’ 20 04 tax return was ul ti m at el y fil ed , anda $5 8,3 01 lo ss was rep orte d, M rs . Arob o s ho ul d h av e su sp ect edth atso m ethi ng m ig htbe am is s. The returns for20 05 , 20 06 , and20 07 were fi le d o nl y aft er the 20 04 return was un de r IRS e xa m in at io n. Un de r th e fac ts an d c irc um st an ces pre se ntin th is
cas e, we wou ldex pe cta reas on ab ly pru de ntpe rs on inth e p os it io n o f Mrs . Arob o to be di li ge nt , vi gi la nt , andcir cu m sp ectan d t ha t h e/ sh e wou ldcare fu ll y rev ie w th e 20 05 , 20 06 , and20 07 tax returns foraccu racy. Mrs . Arob o was a co ll eg e-educ at edin di vi du al . She kn ew, orsh ou ldha ve kn own , of h er re sp on si bi li ty to fi le anaccu rat e ta x re tu rn , esp eci al ly in v ie w of t he factth atsh e taug htat- ris k s tu de nt s t o b e res po ns ib le . She kn ew th atth e returns ha d b een fil edbe cau se pe ti ti on ers ha d b eenco nt act edby the IRS. Tha t kno wled ge sh ou ldha ve pu t h er o n n ot ic e th atpe ti ti on ers ’ 20 05 , 20 06 , and20 07 tax returns wou ldli ke ly be subjec t t o s cru ti ny. Eve n acu rs ory rev ie w of e ach y ear’s t ax return wo ul d h av e rev eal edth atMr. Aro bo ’s m ortg ag e o rig in at io n b us in es s h ad rep orte d (o n l in e 1 2 o f th e fi rs t p ag e o f eac h re tu rn ) subs ta nt ia l l os se s fo r 20 04 an d 20 05 an d t ha t n o b us in es s i nc om e o r lo ss was re po rte d fo r 20 06 an d 2 00 7.- 12 -

[* 12 ] Mrs . Arob o, as a reas on ab ly pru de ntpe rs on , hada du ty to que st io n M r. Aro bo as t o t he accu racy of th e 2 00 4, 2 00 5, 2 00 6, an d 2 00 7 t ax returns , bu t s he di d n ot . Rath er, s he si gn edeachtax return wi th ou t i ns pe ct io n. An d atax pay er who fil es a joi ntreturn wi th he r sp ou se ha s a dut y to in qu ire an d m ay

no t av oi d th atdu ty by

turn in g abl in d e y e to th e co nt en ts of t he joi ntreturn. Pri ce v . Co m m is si on er, 8 87 F.2d95 9, 9 65 (9t h C ir. 1 98 9) (ci ti ng Levi n v . Comm is si on er, T.C. Mem o. 1 98 7- 67 ); Workv. Co m m is si on er, T.C. Mem o. 2 01 4- 19 0, at*7
. Mrs . Arob o was res po ns ib le forpa y in g t he fam il y ’s bi ll s. Hadsh e rev ie wed th e ta x re tu rn s s he wou ldhave see n t ha t t he returns rep orte d n o n etbu si ne ss in co m e fo r fo ury ears an d yet th e fam il y ’s st an da rdof l iv in g was no t d im in is he d. See R es er v . Comm is si on er, 1 12 F.3d12 58 , 12 67 -1 26 8 (5 thCir . 19 97 ) (“ Tax returns set ti ng forth ‘ dr am at ic de du ct io ns ’ wil l g en eral ly puta reas on ab le tax pa y er on no ti ce tha t fu rth er i nv es ti ga ti on is warran te d.” ), aff’g i n p art , rev ’g inpa rt T.C. Mem o. 1 99 5- 57 2; Levi n v . Comm is si on er, T.C. Mem o. 1 98 7- 67 (sp ou se reque st in g re li ef h ada du ty to i nqui re ab ou t l arg e d educ ti on s re po rte d o n t he face of th e joi nttax return andco ul d n otesc ap e h er re sp on si bi li ti es by ign or in g t he
co nt en ts of t he return wh ensi gn in g) . As th ere was no in di cat io n t ha t M r. Arob o was de cei tfu l o r ev as iv e wit h re sp ectto th e fam il y ’s fin an ces , Mrs . Arob o c an no t es cap e h er re sp on si bi li ty to b e in fo rm edof the co nt en ts of the joi nttax return.- 13 -

[* 13 ] Insu m , we fin d t ha t M rs . Arob o h adreas on to kn ow o f th e u nd ers ta te m en ts
on each of t he returns withi n t he m ean in g o f se ct io n 6 01 5( b) (1 )(C) . W e th us ho ld th atMrs . Arob o i s n oten ti tl edto th e reque st edrel ie f fro m joi ntan d s ev eral li ab il it y un de r se ct io n 6 01 5( b)
. II. Sect io n 6 01 5( f) Equi tabl e Rel ie f Sect io n 6 01 5( f) p ro vi de s fo r equi tabl e rel ie f un de r pr oc edur es pre sc rib edby th e Sec ret ary if: (1) tak in g i nt o a cco un t al l the fact s an d c irc um st an ces , itis in equi tabl e to ho ldth e in di vi du al li ab le foran y unpa idtax or a ny defi ci en cy an d (2 ) rel ie f is no t av ai labl e to th e reque st in g s po us e u nd er s ub se ct io n (b ) or(c). The reque st in g s po us e h as th e b ur de n o f pr ov in g t ha t h e/ sh e is en ti tl edto rel ie f. Altv. Co m m is si on er, 1 19 T.C. at 3 11 . W e ap pl y a de no vo sco pe an d s tand ardof r ev ie w in rev ie win g t he reque st in g s po us e’s pr ay er fo r rel ie f. Porte r v. C omm is si on er, 13 2 T.C. at21 0. The IRS co nc ed es th atMrs . Arob o m eet s t he requi rem en t o f se ct io n 60 15 (f)(2 ), in th atrel ie f is no t av ai labl e u nd er s ub se ct io n (b ) or(c). With res pe ct to sec ti on 60 15 (f)(1 ), th e Co m m is si on er p ub li sh edRev . Pro c. 20 13 -3 4, 2 01 3- 43 I.R.B. 3 97 , ou tl in in g t he fact or s t he IRS n orm al ly con si de rs in de ci di ng whet he r se ct io n 6 01 5( f) rel ie f sh ou ldbe gra nt ed . Whi le th is Co urt i s n otbo un d b y IRS
rev enue pro cedur es , we oft enlo okto th em forgu id an ce. Hol li m on v.- 14 -

[* 14 ] Co m

m is si on er, T.C. Mem o. 2 01 5- 15 7, at*7 -* 8; see Pu ll in s v . Co m m is si on er, 1 36 T.C. 43 2, 4 38 -4 39 (20 11 ). Rev . Pro c. 20 13 -3 4, 2 01 3- 43 I.R.B. at39 9- 40 3, s et s fo rth a th ree- st ep pr oc edur e to be fol lo wedin ev al ua ti ng reque st s fo r rel ie f: (1 ) se ct io n 4 .01 li st s se ve n t hr es ho ldco nd it io ns whi ch m us t b e m et ; (2 ) se ct io n 4 .02 li st s ci rcu m st an ces in whi chth e IRS wil l m ak e st ream li ne d re li ef d et erm in at io ns ; an d (3 ) se ct io n 4 .03
se ts forth no ne xc lu si ve fact or s t ha t t he IRS wi ll co ns id er i n d et erm in in g wh ethe r equi tabl e rel ie f sh ou ldbe gra nt edbe cau se itwou ldbe in equi tabl e to ho lda reque st in g s po us e joi nt ly andsev eral ly liab le . The IR S co nc ed es th atMrs . Arob o m eet s t he th res ho ldrequi rem en ts of s ect io n 4 .01 , andMrs . Arob o c on ced es sh e do es no t qua li fy

forth e stream li ne d p ro cedur es of s ect io n 4 .02 . Hence , we foc us on th e n on ex cl us iv e fac to rs of s ect io n 4 .03
. Rev . Pro c. 20 13 -3 4, s ec. 4 .03 , pro vi de s a l is t o f no ne xc lu si ve fact or s t o b e weig he d b y

th e Co m m is si on er i n m ak in g ade ci si on . They in cl ud e (a) m ari ta l st atus (i.e ., do th e sp ou se s re m ai n t og ethe r? ); ( b) eco no m ic ha rd sh ip ; (c ) kn owl ed ge or r eas on to kn ow o f th e reque st in g s po us e; (d) leg al ob li ga ti on ari si ng fro m a di vo rce d ecre e o r ot he r bi nd in g a gr eem en t; (e) s ig ni fic an t b en efi t g ai ne d b y th e reque st in g s po us e; (f) co m pl ia nc e wit h i nc om e ta x l aws ; an d (g ) m en ta l o r ph y si cal he al th at t he ti m e o f fi li ng th e reque stforrel ie f. No s in gl e fac to r is- 15 -

[* 15 ] de te rm in at iv e, an d a ll fact or s ar e co ns id eredan d wei gh edap pr op ria te ly. Kell am v. Co m m is si on er, T.C. Mem o. 2 01 3- 18 6, at*2 6. The pa rti es ag ree t ha t fa ct or s (a ) m ari ta l s ta tu s, (f ) ta x c om pl ia nc e, an d (g )
m en ta l/ph y si cal he al th are n eu tra l an d t ha t t he leg al ob li ga ti on fact oris in ap pl ic ab le . Accor di ng ly, we li m itou r in qu iry to f act or s (b ) eco no m ic hard sh ip ; (c) kno wled ge or r eas on to kn ow; an d (e ) si gn ifi can t b en efi t. 1. Eco no m ic Hard sh ip Rev . Pro c. 20 13 -3 4, s ec. 4 .03 (2 )(b ), pr ov id es th ataneco no m ic ha rd sh ip

“ ex is ts if s at is fact io n o f th e ta x l iabi li ty in wh ol e o r in pa rt wi ll cau se th e reque st in g s po us e to be un ab le to pa y reas on ab le ba si c li vi ng ex pe ns es .” Whe th er a reque st in g s po us e wil l s uf fer e co no m ic ha rd sh ip is ba se d o n ru le s s im il ar t o th os e in sec ti on30 1.6 34 3- 1( b) (4 ), Pro ced . & Adm in . Reg s. Th e fac ts an d ci rcu m st an ces co ns id eredin cl ud e: (1) th e reque st in g s po us e’s ag e, em pl oym en t st atus an d h is to ry , abi li ty to ea rn , andnu m be r of de pe nd en ts ; (2 ) th e am ou nt reas on ab ly neces sa ry

forfoo d, cl ot hi ng , ho us in g, m ed ic al ex pe ns es , tra ns po rta ti on , andcu rren t t ax pa ym en ts ; an d (3 ) an y ex tra or di na ry

cir cu m st an ces su ch as s pe ci al educ at io na l ex pe ns es , a m ed ic al cat as tro ph e, ora na tu ral di sa st er. Id . In ad di ti on , th e IRS co ns id ers th e reque st in g s po us e’s cu rren t i nc om e (in cl ud in g h ow t he reque st in g s po us e’s in co m e co m pa res to Fed eral po ve rty- 16 -

[* 16 ] gu id el in es ) an d a ss et s i n c om pa ris on with h is /h er ex pe ns es . Rev . Pro c. 20 13 -3 4, s ec. 4 .03 (2 )(b ). Fact or (b) (eco no m ic ha rd sh ip ) wei gh s i n fa vo r of rel ie f whe re the reque st in g s po us e wou ldsu ffereco no m ic hard sh ip if re li ef were de ni ed
an d i s n eu tra l wh ere t he reque st in g s po us e wou ldno t s uf fer s uc h h ard sh ip if re li ef were d en ie d. Id
. Mrs . Arob o s ta te d o n F orm 88 57 th athe r m on th ly inc om e in20 15 was $3 ,42 0 a ndth athe r m on th ly exp en se s wer e $ 3,3 60 ; t hu s, h er m on th ly exp en se s d o no t ex ceedhe r m on th ly inc om e. Mo reo ve r, Mr. Aro bo tes ti fie s t ha t h e ex pe ct s t o be ab le to pa y

pe ti ti on ers ’ li ab il it y . Con se qu en tl y , Mrs . Arob o h as no t p ro ve n s he wil l s uf fer e co no m ic ha rd sh ip if we d en y rel ie f. W e fi ndfact or(b) is ne ut ral
. 2. Kno wled ge or R eas on To Kn ow Und er thi s fa ct orwe ex am in e whe th er the reque st in g s po us e kne w, or h ad
reas onto kn ow, tha t t he re was anun de rs ta te m en t o r de fic ie nc y on th e joi ntin co m e ta x re turn , or kne w, or h adreas on to kn ow, tha t t he no nr eque st in g s po us e wou ld
no t o r co ul d n otpa y

a rep orte d b utunpa idtax li ab il it y . See i d. s ec. 4 .03 (2 )(c) (ii ). 3 The fact or s en un ci at edin th e rev enue pro cedur e are ess en ti al ly the same as th os e rel ie d upo n b y

sec ti on 60 15 (b )(1 )(C) . As di sc us se d i n s ect io n I( 2) , supr a, Mrs . The re were no un de rp aym en t o f ta x re po rte d o n the joi ntreturns foran y of 3 th e y ears in vo lv ed
.- 17 -

[* 17 ] Arob o h adreas on to kn ow o f th e u nd ers ta te m en ts of t ax . Mor eo ve r, Mrs . Aro bo ha s n otcla im edth atsh e was ab us edby Mr. Arob o o r th athe res tri ct edhe r acce ss to fin an ci al in fo rm at io n. We fin d fa ct or(c) wei gh s ag ai ns t re li ef. 3. Si gn ifi can t Be ne fit Und er thi s fa ct orwe co ns id er wh ethe r th e reque st in g s po us e rec ei ve d a si gn ifi can t b en efi t, b ey on d n orm al supp ort, fro m th e unp ai d i nc om e ta x l iabi li ty. Rev . Pro c. 20 13 -3 4, s ec. 4 .03 (2 )(e) . Norm al supp ort i s m eas ur edby the ci rcu m st an ces of the parti cu la r pa rti es . Port er v . Comm is si on er, 1 32 T.C. at 2 12
. Thi s fa ct or

wil l wei gh in fav orof r el ie f if th e n on reque st in g s po us e si gn ifi can tl y be ne fit edfro m

th e unp ai d t ax or u nd ers ta te m en t an d the reque st in g s po us e h ad li tt le or n o b en efi t o r th e n on reque st in g s po us e en joy edth e b en efi t t o t he reque st in g s po us e’s de tri m en t. Id
. Pet it io ne rs tes ti fie d t ha t t he y us edth ei r in co m e to m ai nt ai n t he ir l ife st y le . If Mr. Aro bo ’s m ortg ag e o rig in at io n b us in es s h adsu ffer edth e lo ss es rep orte d o r ha d
no in co m e, pe ti ti on ers ’ st an da rdof l iv in g wo ul d h av e b een si gn ifi can tl y de crea se d. Th us , Mrs . Arob o, as well as M r. Arob o, re cei ve d t he be ne fitof p ay in g no tax onhu nd red s o f th ou sa nd s o f do ll ars . Peti ti on ers pro vi de d n o do cu m en ta ti on reg ard in g the di sp os it io n o f th atbe ne fit . Becau se Mrs . Arob o- 18 -

[* 18 ] be ars th e b ur de n o f pr ov in g t ha t s he di d n otrece iv e a s ig ni fic an t b en efi t fro m th e u nr ep orte d i nc om e, bu t d idno t, thi s fa ct orweig hs ag ai ns t g ran ti ng he r rel ie f. 4. Co nc lu si on Mrs . Arob o i s n oten ti tl edto rel ie f fro m joi ntan d s ev eral li ab il ity un de r se ct io n 6 01 5( f) fo r an y

of t he y ears in vo lv ed . No fac to r supp orts th e reque st ed rel ie f, an d t he to ta li ty of th e ci rcu m st an ces su rro un di ng Mrs . Arob o’s re as on to ha ve kn own of the un de rs ta te m en ts on pe ti ti on ers ’ ta x re tu rn s m ak es cle ar tha t i t wou ldno t b e in equi tabl e to de ny her the rel ie f so ug ht
. To re fle ctco nc es si on s m ad e inth e st ip ul at io n o f se tt le d i ss ue s, Deci si on wil l b e en te redun de r Ru le 15 5.