T.C. Mem o. 2 01 6- 12 9

UNITED STAT ES TAX COURT

BONNIE MARIA ARM OUR, Pet it io ne r AND MARK V. POULSEN, In te rv en or v. COM MIS SIONER OF INTERNAL REVENUE , Res po nd en t

Doc ke t No . 70 79 -1 4. Fi le d J ul y 11 , 20 16
.
Bo nn ie Mari a Arm ou r, pr o s e. Jo hn S. Pon ti us , Jr., Gle n E. Fro st , andJes si ca F. Ma rin e, fo r in te rv en or . Tim ot hy B. Heavn er, Ma tthe w S. Red di ng to n, an d Wendy C. Yan, fo r res po nd en t.- 2 -

[* 2] MEMORANDUM FINDINGS OF FACT AND OPINION
JAC OBS, Jud ge : Th is cas e is be fo re u s wi th res pe ctto res po nd en t’s d en ia l of pe ti ti on er’s reque stfor

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 1 fo r 20 07 , 20 08 , and20 09 (y ears in vo lv ed ). Pet it io ne r an d i nt erv en or were m arri ed du rin g t he y ears in vo lv ed ; the y sep arat edin20 09 an d d iv or cedin20 10 aft er ne arl y 20 y ears of m arri ag e. Pet it io ne r an d i nt erv en orfil edth ei r 20 07 , 20 08 , and 20 09 Fo rm s 1 04 0, U.S. In di vi du al Inc om e Tax Return, as m arri edfil in g jo in tl y . Fo ll owi ng anau di t o f pe ti ti on er an d i nt erv en or ’s join t i nc om e ta x re tu rn s, o n Mar ch9, 2 01 3, p et it io ne r si gn eda Fo rm 87 0- AD, Offer to W ai ve Res tri ct io ns on Ass es sm en t an d C ol le ct io n o f Tax Defi ci en cy an d t o Acc ep t Ov eras se ss m en t, ag reei ng to th e as se ss m en t an d c ol le ct io n o f in co m e ta x d efi ci en ci es an d p en al ti es un de r se ct io n 6 66 2( a) as fol lo ws: 2

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 1 Rev enue Co de , as a m en de d, atall rel ev an t t im es . All d ol lar am ou nt s ar e ro un de d to th e n eare stdo ll ar. In te rv en or

ha s n o l eg al ob li ga ti onto pa y th e o ut st an di ng tax li ab il ity 2 pu rs ua ntto th e d iv or ce d ecre e. In te rv en orha s p ai d app ro xi m at el y $7 5,0 00 of t he ou ts ta nd in g t ax li ab il ity

whi le pe ti ti on er h as m ad e n o s uc h p aym en t. The reco rd do es no t re ve al forwhi chtax y ear( s) in te rv en or ’s paym en t was ap pl ie d. Reg ard le ss of wh ethe r in te rv en or ’s paym en t s at is fie d a ny y ear’s t ax li ab il ity , th at pa ym en t d oe s n otren de r pe ti ti on er’s reque stforrel ie f fro m joi ntan d s ev eral li ab il ity m oo t. See Kauf

m anv. Co m

m is si on er, T.C. Mem o. 2 01 0- 89
.- 3 -

[* 3] Pen al ty Year Defi ci en cy se c. 66 62 (a) 20 07 $2 4,1 86 $4 ,83 7 20 08 73 ,34 3 14 ,01 8 20 09 3,75 3 -0- On the same day

sh e si gn edth e Fo rm

87 0- AD, pet it io ne r si gn eda Fo rm 88 57 , Reque stfor

Inn oc en t Sp ou se Rel ie f, an d fi le d i t wi th th e In te rn al Rev enue Serv ic e (IRS ). Pet it io ne r’s reque stforrel ie f was de ni edonMarc h 1 7, 2 01 4. FINDINGS OF FACT So m e o f th e fac ts inth is m at te r ha ve be enst ip ul at edan d a re s o fo un d. At th e ti m e sh e fi le d h er p et it io n, p et it io ne r res id edinMarylan d. Pe ti ti on er h ol ds a hi gh sch oo l d ip lo m a. Sh e at te nd edth e Uni ve rs ity of De la ware fo r si x m on th s, ta ki ng no nc red itco ur se s i n d at a p ro ces si ng . Whi le m arri ed , pet it io ne r an d i nt erv en or own edth e m ari ta l h om e, two ren ta l pr op ert ie s an d afarm . Becau se pe ti ti on er an d i nt erv en orha d alar ge bl en de d fam il y , th ey

own eda la rg e v aninad di ti onto two pi ckup tru ck s an d an Ol ds m ob il e Cu tl as s, wh ic h i nt erv en or de sc rib edas a“ cl as si c car ”. They too k fam il y va cat io ns each y ear, i nc lu di ng tri ps to Berm ud a an d M ex ic o. Th ey

en joy edcam

pi ng , and th ro ug ho utth e y ears th ey purch as edsev eral cam

pe rs , whi chth ey

us edonfam il y cam pi ng tri ps ev ery few m on th s.- 4 -

[* 4] In te rv en orown edM.V.P. Bu il de rs , whi chwas the pri m ary so ur ce o f th e 3 fam il y ’s in co m e. Est ab li sh edinth e ear ly 198 0s , M.V.P. Bu il de rs is a ho m e im pr ov em en t co m

pa ny focu si ng on res id en ti al rem od el in g. A car pe nt er b y tra de , in te rv en orop erat edth e b us in es s, b uthe di d n otha ve th e b oo kk eep in g b ack gr ou nd to m ai nt ai n t he co m

pa ny’ s re co rd s. He h ire d p et it io ne r to be th e co m pa ny’ s bo okke ep er an d o ffi ce m an ag er. The ir r el at io ns hi p b lo ss om ed , andth ey ev en tu al ly w ed
. Pet it io ne r was M.V.P. Bu il de rs ’ bo okke ep er/ of fic e m an ag er fo r ap pr ox im at el y

20 y ears , in cl ud in g the y ears in vo lv ed . She de ve lo pe d a nd
m ai nt ai ne d t he acco un ti ng pro gr am us edby the bu si ne ss . Her du ti es in cl ud ed : (1 )
m an ag in g t he co m

pa ny’ s fi nanc ia l re co rd s, b an k a cco un ts , andAm eri canExp res s cred itcardacco un t; (2) m an ag in g t he co m pa ny’ s “ en d o f th e m on th ch eckrun ”, whi chreco nc il edall ch arg e acc ou nt s tha t M .V.P. Bui ld ers ha d fr om it s v en do rs , ro of in g s up pl ie rs , lum

be r y ard s, p lu m

bi ng supp ly hou se s, an d o th er subc on tra ct or s; (3) reco nc il in g t he co m pa ny’ s b an k a ndcred itcardst at em en ts ; (4 )
m an ag in g t he acco un ts pa y ab le an d a cco un ts rece iv ab le ; (5 ) tr ack in g i nv en to ry ;
an d (6 ) m an ag in g t he co m pa ny’ s p ayro ll . To th es e en ds , pet it io ne r ha d aut ho rit y
Dur in g t he y ears in vo lv edM.V.P. Bu il de rs was aso le pro pr ie to rs hi p. It 3 was lat er i nc or

po rat edat ati m e n otsp eci fie d i n t he reco rd
.- 5 -

[* 5] to writ e an d s ig n c he ck s o n b eh al f of M.V.P. Bu il de rs , dep os itm on ey in to th e
co m pa ny’ s ac co un ts , andpre pa re ch eck s an d re cei pt s fo r th e b us in es s. Pet it io ne r was fam il ia r with M .V.P. Bui ld ers ’ cl ie nt s an d kne w, or atlea stco ul d h av e le arn ed , th e am ou nt s the y pa idth e co m

pa ny. Befo re b eco m in g M .V.P. Bui ld ers ’ bo okke ep er, p et it io ne r ha d o th er ex pe rie nc e in acco un ti ng . Whe n p et it io ne r m an ag edM.V.P. Bu il de rs ’ fin an ces , her du ti es in cl ud edth e en d- of -y ear a cco un ti ng forth e co m pa ny. Sh e rev ie wedth e co m pa ny’ s b oo ks an d pr ov id edin fo rm at io n a nddo cu m en ts to th e co m pa ny’ s ce rti fie d p ub li c acc ou nt an t (C.P.A.), J oe Tig ne , who pre pa redpe ti ti on er an d i nt erv en or ’s join t t ax returns . Sh e al so m etan d i nt erac te d wi th Mr. Tig ne du rin g t he y ears in vo lv ed . She adm it te d t o “ bo ok in g t hi ng s wro ng ” fo r M.V.P. Bu il de rs an d was advi se d t ha t s he ha d d on e so by Mr. Tign e. Fo r 20 07 pe ti ti on er an d i nt erv en or ’s join t re tu rn s u nd erre po rte d i nc om e at tri bu tabl e to M.V.P. Bu il de rs ; fo r 20 08 th e returns un de rrep orte d i nc om e an d
ov ers ta te d e xp en se s at tri bu tabl e to M.V.P. Bu il de rs . The IR S m ad e n o ad jus tm en ts with re sp ectto M.V.P. Bu il de rs for 20 09
. Inad di ti on to work in g fo r M.V.P. Bu il de rs , pet it io ne r op erat eda ho rs e car e
an d b oa rd in g b us in es s o n t he farm th atsh e an d i nt erv en orown ed . She ex cl us iv el y co nt ro ll edth e b us in es s, an d u nd er h er s te ward sh ip th e b us in es s’ in co m e fo r eac h- 6 -

[* 6] of t he y ears in vo lv edwas u nd erre po rte d. Al l ad jus tm en ts m ad e b y

th e IRS fo r 20 09 were due to un de rrep orte d i nc om e wit h re sp ectto th e h or se care an d bo ard in g b us in es s. Pet it io ne r wro te ch eck s drawnon M.V.P. Bu il de rs ’ ba nkacco un t t o h ers el f,
an d s he us edth e M.V.P. Bu il de rs ’ Am eri canExp res s cr ed itcardto pa y ho rs e car e
an d b oa rd in g b us in es s an d h ou se ho ldex pe ns es . Pet it io ne r was gi ve n the joi ntin co m e ta x re tu rn s fo r 20 07 , 20 08 , and20 09 be fo re the y

were fi le d, b utsh e d idno t re vi ew th em be fo re s ig ni ng th em . Pet it io ne r was no t a v ic ti m of s po us al ab us e o r do m es ti c v io le nc e dur in g t he y ears in vo lv ed
. Res po nd en t fi le d h is po st tri al bri ef o n J anua ry 27 , 20 16 . Int erv en orno ti fie d th e Co urt o n t ha t s am e d ay th athe wou ldno t fi le a br ie f. Pet it io ne r’s rep ly brie f
was du e b y

Apri l 1 3, 2 01 6. No bri ef was fil edby pet it io ne r. OPINION I. In tro du ct io n t o R el ie f Fro m Jo in t an d S ev eral Liab il ity 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- 7 -

[* 7] sev eral li ab il ity

un de r subs ect io n (b ). Sect io n 6 01 5( a)(2 ) pr ov id es th atif an in di vi du al is eli gi bl e to ele ctth e ap pl ic at io n o f subs ect io n (c ), th atin di vi du al m ay , in ad di ti on to an y

ele ct io n u nd er s ub se ct io n (a )(1 ), el ectto li m ithi s/he r li ab il ity fo r an y de fic ie nc y

with re sp ectto th e joi ntreturn i n am an ne r pr es cri be d i n subs ect io n (c ) of

sec ti on 60 15
. II. Sect io n 6 01 5( b) Rel ie f 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 ity 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 ttrib 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 tha 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 the 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 und ers tate 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 ) withi 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. 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)
.- 8 -

[* 8] The re qu es ti ng sp ou se be ars 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 60 15 (b ) rel ie f. Id. at31 1. Res po nd en t co nc ed es th atpe ti ti on er s at is fie s the requi rem en ts of s ect io n 60 15 (b )(1 )(A) an d (E) (pe ti ti on er an d i nt erv en orfil edjoi nttax returns for20 07 , 20 08 , and20 09 , andpe ti ti on er s ou gh t re li ef wi th in th e two -y ear l im it at io ns pe rio d) bu t as se rts th atpe ti ti on er d oe s n otm eetth e requi rem en ts of s ub pa rag rap hs (C) (t he sp ou se reque st in g re li ef m us t es tabl is h h e/ sh e d idno t kno w, andha d n o reas onto kn ow, o f th e und ers tate m en t o f ta x o n the returns ) an d (D) (itwou ldbe 4 in equi tabl e to ho ldth e reque st in g s po us e li ab le for th e d efi ci en cy ). W e ag ree wi th res po nd en t tha t the requi rem en ts of s ect io n 6 01 5( b) (1 )(C) ha ve no t b eenm etinth atpe ti ti on er d idno t es tabl is h t ha t s he di d n otkn ow, an d ha d n o re as on to kn ow, o f th e und ers ta te m en ts of t ax . As a p rel im in ary m at te r, pe ti ti on er co nc ed es sh e is res po ns ib le forth e und ers ta te m en t o f ta x a ttrib ut ab le to th e h or se care an d b oa rd in g b us in es s an d t he refo re s he do es no t qua li fy forrel ie f with re sp ectto th e unp ai d t ax att rib ut edth eret o. Pe ti ti on er m ai nt ai ns sh e is
en ti tl edto rel ie f fro m

li ab il ity with re sp ectto th e d efi ci en ci es att rib ut ab le to

“ 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 4 sa m e requi rem en t o f fo rm er s ect io n 6 01 3( e)(1 )(C) ; the refo re, cas es in te rp 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 el 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.- 9 -

[* 9] M.V.P. Bu il de rs be cau se sh e was no t the own er o f th e co m pa ny andon ly
m ad e d at a en tri es . W e d is ag ree. As M.V.P. Bu il de rs ’ bo okke ep er an d o ffi ce
m an ag er fo r ap pr ox im at el y two de cad es , in cl ud in g t he y ears in vo lv ed , pet it io ne r was di rect ly resp on si bl e fo r m ai nt ai ni ng all reco rd s re la ti ng to th e co m pa ny’ s fin an ces . She ha d a cces s t o t he bu si ne ss ’ ch eck in g a cco un ts , cred itcardacco un t, pa yro ll , bi ll s, re cei pt s, an d d ep os it s; sh e wro te ch eck s, m ad e th e b an k d ep os it s,
an d re co nc il edth e co m

pa ny’ s b an k re co rd s. Sh e p ro vi de d t he in fo rm at io n a nd do cu m en ta ti on th atth e C.P.A. us edinco nn ect io n wi th th e p rep arat io n o f pe ti ti on er an d i nt erv en or ’s join t i nc om e ta x re tu rn s. An d d es pi te ha vi ng acce ss to th e in fo rm at io n u nd erl y in g t he in co m e an d e xp en se s re po rte d o n t he joi ntin co m e ta x re turn s, p et it io ne r fai le d t o re vi ew th e returns , or i nqui re as to th ei r acc ur acy, be fo re the y

were fi le d. Insu m , we fin d t ha t p et it io ne r kn ew of th e und ers ta te m en ts of t ax on each of th e returns fil edforeach of t he y ears in vo lv edwithi n t he m ean in g o f se ct io n 60 15 (b )(1 )(C) . Accor di ng ly, pe ti ti on er 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 ity un de r se ct io n 6 01 5( b)
. 5

Bec au se we ag ree wi th res po nd en t tha t the requi rem en ts of s ec. 5 60 15 (b )(1 )(C) ha ve no t b eenm et , we do no t ad dr es s the requi rem en ts of s ub pa ra. (D).- 10 -

[* 10 ] III. Sect io n 6 01 5( c) Re li ef Sect io n 6 01 5( c) p ro vi de s tha t a d iv or cedor l eg al ly sep arat edsp ou se m ay el ectto li m itli ab il ity

fora de fic ie nc y

on a joi ntreturn t o t he po rti onall oc ab le to hi m or h er u nd er s ub se ct io n (d ); i .e., th e ta x l iabi li ty is al lo cat edbe twee n t he in di vi du al s wh o fi le d ajoi ntreturn i n app ro xi m at el y th e sa m e way

itwou ldha ve be enha d t he in di vi du al s fi le d s ep arat el y . To b e el ig ib le forsec ti on 60 15 (c) re li ef, the ele ct in g s po us e m us t es tabl is h th at : (1 ) th e sp ou se s fi le d jo in t re tu rn s fo r th e y ears in vo lv ed ; (2 ) atth e ti m e th e el ect io n fo r rel ie f was m ad e, th e sp ou se s wer e le ga ll y sep arat ed , di vo rced , or h ad
no t b eenm em

be rs of t he same ho us eh ol d anytim e dur in g t he pre vi ou s 1 2 m on th s;
an d (3 ) th e reque stforrel ie f was m ad e wit hi n t wo years o f th e fi rs t co ll ect io n act iv ity . See s ec. 6 01 5( c)(1 ), (3 ). Mo reo ve r, no ass et s m ay be tra ns ferr edbe twee n th e sp ou se s i n afrau du le ntsch em e. See s ec. 6 01 5( c)(3 )(A)(i i). Re sp on de ntdo es no t d is pu te th atpe ti ti on er m eet s the se requi rem en ts . Rel ie f un de r se ct io n 6 01 5( c) i s n otav ai labl e whe re the Co m m is si on er de m on st rat es th atth e reque st in g s po us e h adactua l kno wled ge at t he ti m e h e/ sh e si gn edth e return o f an y

it em gi vi ng ris e to a de fic ie nc y whi chis no t al lo cab le to th e reque st in g s po us e und er s ect io n 6 01 5( d) . Sec. 6 01 5( c)(3 )(C) . The kno wled ge st an da rdforpurp os es of s ect io n 6 01 5( c)(3 )(C) is “ anactua l an d c le ar awar en es s- 11 -

[* 11 ] (as op po se d t o re as onto kn ow) of t he ex is te nc e o f anit em whi chgi ve s ri se to th e d efi ci en cy

(orpo rti on th ereo f).” Ch es hi re v . Comm is si on er, 1 15 T.C. 18 3, 19 5 (2 00 0) , aff’d, 2 82 F.3d32 6 (5 th Cir . 20 02 ); s ee al so Gros sm anv. Co m m is si on er, 1 82 F.3d27 5, 2 79 (4t h C ir. 1 99 9) , aff’g T.C. Mem o. 1 99 6- 45 2. If anit em of i nc om e is om it te d, the reque st in g s po us e m us t h av e actua l kn owl ed ge of t he in co m e, whi chin cl ud es kn owl ed ge of t he rece ip t o f th e in co m e. Harri ng to n v . Comm is si on er, T.C. Mem o. 2 01 2- 28 5; sec . 1.6 01 5- 3( c)(2 )(i )(A), In co m e Tax Reg s. We do no t i nf er ac tu al kn owl ed ge fro m a m ere r eas on to kn ow of th e o m it te d i nc om e. Harri ng to n v . Comm is si on er, T.C. Mem o. 2 01 2- 28 5; sec . 1.6 01 5- 3( c)(2 )(i ii ), In co m e Tax Reg s. Si m il arl y , a reque st in g s po us e m us t h av e actua l kno wled ge of an i m pr op erl y de du ct edit em

ona return. Inan d o f it se lf, the reque st in g s po us e’s kn owl ed ge th ata de du ct io n app ears on th e return i s in su ffi ci en t. Kin g v . Comm is si on er, 1 16 T.C. 19 8, 2 05 (20 01 ). The re qu es ti ng sp ou se ha s ac tu al kn owl ed ge of a n e rro ne ou s d educ ti on if h e/ sh e h as kn owl ed ge of th e fac tu al cir cu m st an ces whi chm ad e th e it em un al lo wab le as ade du ct io n. Id
. at20 4; sec . 1.6 01 5- 3( c)(2 )(i )(B) (1 ), In co m e Tax Reg s. W ith re sp ectto th e unp ai d t ax att rib ut ab le to th e h or se care an d b oa rd in g bu si ne ss , pet it io ne r co nc ed es sh e is res po ns ib le forth es e am ou nt s as sh e was res po ns ib le forop erat in g t he ho rs e car e an d b oa rd in g b us in es s. Th es e am ou nt s ar e- 12 -

[* 12 ] th eref

or e al lo cab le to pe ti ti on er, i .e., th e reque st in g s po us e. W ith re sp ectto th e unp ai d t ax att rib ut ab le to M.V.P. Bu il de rs , we fin d tha t p et it io ne r ha d a ctua l kn owl ed ge of t he co m

pa ny’ s unr ep orte d i nc om e an d e xc es si ve de du ct io ns . As pr ev io us ly stat ed , pet it io ne r m an ag edth e co m pany’ s b oo ks an d fi na nc es an d was well aware o f th e co m

pany’ s ac tu al in co m e an d o ut la y s. Pet it io ne r al so co ll ect ed
an d p ro vi de d the co m

pa ny’ s fi na nc ia l i nf

orm at io n a nddo cu m en ta ti on to th e fam il y ’s C.P.A., Mr. Tig ne , to all ow h im to pre pa re h er an d i nt erv en or ’s join t in co m e ta x re tu rn s. Sh e was aware o f M.V.P. Bu il de rs ’ rece ip t o f in co m e. And sh e h adkn owl ed ge of the factua l ci rcu m st an ces of t he co m pa ny’ s ex pe ns es , gi vi ng he r kn owl ed ge of t he factua l ci rcu m st an ces whi chm ad e th e cl ai m edex pe ns e it em s un al lo wab le as d educ ti on s. W e th eref

or e h ol d t ha t p et it io ne r is no t en ti tl edto th e reque st edrel ie f fro m joi ntan d s ev eral li ab il ity un de r se ct io n 6 01 5( c). IV. 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 und er s ub se ct io n (b ) or(c). The- 13 -

[* 13 ] 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
rev ie w inrev 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. Co m m is si on er, 1 32 T.C. 20 3, 2 10 (20 09 ). Res po nd en t co nc ed es th atpe ti ti on er m eet s the requi rem en t o f se ct io n 60 15 (f)(2 ), inth atrel ie f is no t av ai labl e und 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 the IRS n orm al ly con si de rs inde 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. 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 . Comm is si on er, 1 36 T.C. 43 2, 4 38 -4 39 (20 11 ). Rev . Pro c. 20 13 -3 4, s ec. 4 , 20 13 -4 3 I.R .B. at 3 99 -4 03 , set s fo rth a th reest ep pro cedur e to be fol lo wedinev al ua ti ng reque st s fo r rel ie f: (1 ) se ct io n 4 .01 li st s s ev enth res ho ldco nd it io ns whi chm us t b e m et ; (2 ) se ct io n 4 .02 li st s ci rcu m st an ces inwhi 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 set s fo rth no ne xc lu si ve fact or s tha t the IRS wi ll co ns id er i n de te rm 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
.- 14 -

[* 14 ] The sev eneli gi bi li ty con di ti on s, al l o f whi chm us t b e sa ti sf

ie d fo r th e IRS to
co ns id er a cl ai m

forequi tabl e rel ie f un de r se ct io n 6 01 5( f), p ur su an t t o R ev . Pro c. 20 13 -3 4, s ec. 4 .01 , are as fol lo ws:

(1 ) The reque st in g s po us e fi le d ajoi ntreturn fo r th e ta xabl e y ear f orwhi chhe or s he see ks rel ie f. (2 ) Rel ie f is no t av ai labl e to th e reque st in g s po us e und er se ct io n 6 01 5( b) or ( c). (3 ) The cla im

forrel ie f is ti m el y

fil ed* * * (4 ) No a ss et s wer e tr an sf

erre d b etweenth e sp ou se s as pa rt o f a frau du le ntsch em e b y

th e sp ou se s. (5 ) The no nr eque st in g s po us e d idno t tran sf er d is qu al ifi ed as se ts to th e reque st in g s po us e * * * (6 ) The reque st in g s po us e d idno t kno win gl y pa rti ci pa te inth e fil in g o f a fraudul en t jo in t re tu rn . (7 ) The in co m e ta x l iabi li ty from whi chth e reque st in g s po us e se ek s re li ef i s at tri bu tabl e (ei th er i n fu ll or i n p art ) to anit em of the no nr eque st in g s po us e o r anun de rp aym en t re su lt in g fr om th e no nr eque st in g s po us e’s in co m e. If th e li ab il ity is pa rti al ly at tri bu tabl e to th e reque st in g s po us e, th enrel ie f can on ly be co ns id eredforth e p orti on of t he li ab il ity attrib ut ab le to th e no nr eque st in g s po us e. Non ethe le ss , th e Servi ce wi ll co ns id er gr an ti ng rel ie f reg ard le ss of wh ethe r th e und ers ta te m en t, d efi ci en cy , orun de rp aym en t i s at tri bu tabl e (i n fu ll or i n p art ) to th e reque st in g sp ou se if any of th e fo ll owi ng ex cep ti on s ap pl ie s: (a) Att rib ut io n so le ly due to th e o pe rat io n o f co m m un ity pro pe rty law. * * *(b ) Nom in al own ers hi p. * * * (c) M is ap pr op ria ti on of f un ds . * * * (d ) Abu se . * * * (e ) Frau d c omm it te d b y no nr eque st in g s po us e.- 15 -

[* 15 ] Pet it io ne r ackno wled ge s tha t the un de rs ta te m en t i n t ax ari si ng fro m th e ho rs e car e an d b oa rd in g b us in es s i s at tri bu tabl e to he r. Becaus e co nd it io n 7 is no t
sa ti sf ie d, p et it io ne r co nc ed es sh e is in el ig ib le forrel ie f with re sp ectto th e un de rs ta te m en t o f ta x a ttrib ut ab le to th e h or se care an d b oa rd in g b us in es s. Howev er, with re sp ectto th e und ers ta te m en ts att rib ut ab le to M.V.P. Bu il de rs , be cau se pe ti ti on er d idno t h ol d a n o wne rs hi p i nt eres t i n t he co m pa ny, andbe cau se res po nd en t co nc ed es th atpe ti ti on er m eet s al l o th er thr es ho ldco nd it io ns setforth in Rev . Pro c. 20 13 -3 4, s ec. 4 .01 , we m ov e o n t o t he ne xtst ep inou r an al y si s. 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 6 weig he d b y

th e IRS inm ak in g ade ci si on . They in cl ud e (a) m ari ta l s tatu s (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 orot 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 sp ou se ; (f ) co m pl ianc 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 th e ti m e o f fi li ng th e reque stfor rel ie f. No s in gl e fac to r is 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 mis si on er, T.C. Mem o. 2 01 3- 18 6, at*2 6. Pet it io ne r ha s n otass ert edth atsh e qua li fie s fo r th e st ream li ne d p ro cedur es 6 fo r rel ie f pr ov id edinRev . Pro c. 20 13 -3 4, s ec. 4 .02 , 20 13 -4 3 I.R .B. 39 7, 4 00 . W e th eref or e d o n otad dr es s the m .- 16 -

[* 16 ] Res po nd en t co nc ed es th at(a) m ari ta l s tatu s an d (f ) co m pl ianc e wit h t ax la ws wei ghinfav orof r el ie f. W e th eref or e li mitou r in qu iry to f

act or s (b )
eco no m ic ha rd sh ip , (c) kno wled ge or r eas on to kn ow, (d ) le ga l o bl ig at io n, (e ) si gn ifi can t b en efi t, an d (g ) m en ta l/ph y si cal he al th
. 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 , andcurren 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 chas 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 the reque st in g s po us e’s in co m e co m pa res to Fed eral po ve rty gu id el in es ) an d a ss et s i n c om pa ris onwith h is /h er ex pe ns es . Rev . Pro c. 20 13 -3 4,
se c. 4.0 3( 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- 17 -

[* 17 ] reque st in g s po us e wou ldsu ffereco no m ic ha rd sh ip if re li ef were de ni edan d is ne ut ral wher e th e 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 . At tri al pe ti ti on er es tabl is he d t o t he Co urt’s s at is fact io n t ha t s he
was inso m e eco no m ic di ffi cu lty . Con se qu en tl y , we fin d t ha t thi s fa ct orweig hs 7 in fav orof r el ie f. 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 the 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 d idno t kno w, or h adreas on to kn ow, tha t the no nr eque st in g s po us e wou ldno t o r co ul d n otpa y a rep orte d b utunpa idtax li ab il ity . See i d. s ec. 4.0 3( 2) (c)( ii ). The fa ct or s enun ci at edinth e rev enue pro cedur e are ess en ti al ly the
sa m e as th os e rel ie d upo n b y sec ti on 60 15 (b )(1 )(C) an d (c ). As d is cu ss edsupr a, pe ti ti on er o pe rat edth e h or se care an d b oa rd in g b us in es s an d h adch arg e o f M.V.P. Bu il de rs ’ bo ok s an d fi na nc es . Peti ti on er h adreas onto kn ow o f th e un de rs ta te m en ts of t ax . Mor eo ve r, pe ti ti on er h as no t cl ai m edth atsh e was ab us ed W e n ot e th e Ci nc in na ti Cen tra li zedInn oc en t Sp ou se Oper at io n’s 7 de te rm in at io n t ha t the eco no m ic fact orfav or edrel ie f as pe ti ti on er’s g ro ss in co m e was at 2 50 % or l es s o f th e Fed eral po ve rty lin e an d t ha t s he di d n otha ve su ffi ci en t as se ts to m ak e p aym en ts an d s ti ll pa y ba si c fam il y

li vi ng expe ns es . The IR S App eal s o ffi cer’s o wn an al y si s i nd ic at edth atpe ti ti on er’s h ou se ho ldin co m e was be lo w th e Fed eral po ve rty lin e an d h er ex pe ns es were s li gh tl y les s tha n h er in co m e. Yet the App eal s o ffi cer f ou ndth atth is fact orwas n eu tra l.- 18 -

[* 18 ] by int erv en oror t ha t h e res tri ct edhe r acc es s t o fi na nc ia l i nf orm at io n. We fin d t hi s fa ct orweig hs ag ai ns t re li ef. 3. Leg al Obl ig at io n Rev . Pro c. 20 13 -3 4, s ec. 4 .03 (d ) pr ov id es th atif the no nr eque st in g s po us e ha s the so le leg al ob li ga ti on to pa y th e o ut st an di ng in co m e ta x l iabi li ty pur su an t t o a d iv or ce d ecre e o r ot he r le ga ll y bi nd in g a gr eem en t, thi s fa ct or wil l wei ghinfav or of rel ie f. Ther e is no ev id en ce tha t i nt erv en orha s an y leg al ob li ga ti on to pa y

an y ou ts ta nd in g i nc om e ta x l iabi li ti es forth e y ears in vo lv ed . W e fi ndth is fact orto be
ne ut ral
. 4. 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. Id . sec . 4.0 3( 2) (e). No rm al supp ort i s m eas ur edby the cir cu m st an ces of t he pa rti cu la r pa rti es . Port er v . Comm is si on er, 1 32 T.C. at 2 12 . This fact or wil l weig h i n fa vo r of

rel 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 t he reque st in g s po us e h adli tt le or n o b en efi t
orth 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
.- 19 -

[* 19 ] Pet it io ne r wro te ch eck s t o h ers el f fro m M.V.P. Bu il de rs ’ ch eck in g a cco un t fo r pe rs on al us e an d t o s up po rt h er h or se care an d b oa rd in g b us in es s. We fin d t hi s fact or weig hs ag ai ns t re li ef. 5. Men ta l/ Ph y si cal Heal th The re i s n o e vi de nc e th atpe ti ti on er was il l wh ensh e si gn edth e returns for th e y ears in vo lv edor wh ensh e reque st edrel ie f. Nor d idsh e ap pe ar t o b e in il l he al th at t ria l. We fin d t hi s fa ct orweig hs ag ai ns t re li ef. See Pu ll in s v . Co m m is si on er, 1 36 T.C. at 4 54
. 6. Co nc lu si on W e co nc lu de th atpe ti ti on er 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 . The m os t s ig ni fic an t fact or inreac hi ng ou r co nc lu si on is th atpe ti ti on er h adkn owl ed ge of t he
un de rs ta te m en ts of t ax or d efi ci en ci es with re sp ectto th e joi ntin co m e ta x re tu rn s. Pet it io ne r was di rect ly resp on si bl e fo r th e und erre po rti ng of i nc om e with re sp ect to th e h or se care an d b oa rd in g b us in es s an d, as M.V.P. Bu il de rs ’ bo okke ep er/ of

fic e m an ag er, s he kn ew of th e und erre po rti ng of i nc om e an d
ex ces si ve ex pe ns e d educ ti on s at tri bu tabl e to th atbu si ne ss .- 20 -

[* 20 ] To re fle ctth e fo reg oi ng , Deci si on wil l b e en te red fo r res po nd en t.