TAX COURT OPINION

Case: Anne Maureen Hughes
Docket Number: 17580-05S
Judge: Colvin
Opinion Type: bench
Filed: 06/09/2008
Pages: 8

UNITED STATES TAX COURT WASHINGTON, D .C . 2021 7 ANNE MAUREEN HUGHES, Petitioner , v . ) Docket No . 17580-05S STAT . S . T . JUDGE COMMISSIONER OF INTERNAL REVENUE , Respondent . O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Special Trial Judge Lewis R . Carluzzo at St . Louis, Missouri, on May 22, 2008, containing his oral findings of fact and opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, decision will be entered for respondent . (Signed) Lewis R. Carluzzo Special Trial Judg e Dated : Washington, D .C . June 9, 2008 SERVED JUN 10 2008 2 1 Bench Opinion by Special Trial Judge Lewis R . Carluzzo 2 May 22, 200 8 3 Hughes v . Commissioner Docket No . 17580-05S 4 THE COURT : The Court has decided to render 5 oral findings of fact and opinion in this case, an d 6 the following represents the Court's oral findings of 7 fact and opinion . The oral findings of fact and 8 opinion shall not be relied upon as precedent in any 9 other case . 10 Section references contained in this bench 11 opinion are to the Internal Revenue Code of 1986, as 12 amended, in effect for the relevant period . Rul e 13 references are to the Tax Court Rules of Practice and 14 Procedure . 15 This section 6015(e) proceeding was 16 conducted as a Small .Tax Case pursuant to th e 17 provisions of section 7463 and Rules 170 through 175 . 18 This bench opinion is made pursuant to the authority 19 granted by section 7459(b) and Rule 152 . 20 Anne Maureen Hughes appeared pro se . Steven 21 W . LaBounty appeared on behalf of respondent . 22 In a notice of determination, dated July 7, 23 2005, respondent denied petitioner's claim for section 24 6015(f) relief from her unpaid 2000 Federal income tax 25 liability and related amounts . In a timely petition , Heritage Reporting Corporation (202) 628-4888 3 1 filed September 19, 2005, petitioner requests this 2 Court to review respondent's determination . Ou r 3 jurisdiction to do so is established by sectio n 4 6015(e), and we review respondent's determination for 5 abuse of discretion . Butler v . Commissioner , 114 T .C . 6 276, 292-293 (2000) . 7 Some of the facts have been stipulated and 8 are so found . At the time the petition was filed in 9 this case, petitioner resided in Missouri . 10 Petitioner's first marriage to Edwin Butler 11 ended by divorce, as did her second marriage to him . 12 Both individuals are well educated . Petitioner is a 13 certified public accountant and her former spouse is 14 an attorney, and each was employed in their respective 15 professions at all times relevant here . Their second 16 marriage ended by divorce in December 2002 . They have 17 three children . 18 While married it was their practice to file 19 joint Federal income tax returns, and they did so for 20 2000 . Because of financial difficulties petitioner 21 and her former spouse were experiencing at the time, 22 the income tax liability reported on that return, that 23 is, $13,792, was not fully paid . The portion that was 24 paid, that is, $5,054, was paid through income ta x 25 withholdings from petitioner's wages . Heritage Reporting Corporation (202) 628-4888 4 1 Over the years, interest and additions to 2 tax accrued on the unpaid 2000 tax liability . 3 Payments were made pursuant to an installmen t 4 agreement between petitioner and respondent tha t 5 ultimately lapsed into default . Offsets from refunds 6 of overpayments of income tax made by petitioner for 7 other years were also applied to the 2000 ta x 8 liability . As of January 18, 2006, that liability was 9 $7,134 .57 . 10 In connection with their most recent divorce 11 proceedings, a Separation Agreement as well as a 12 Parenting Plan were filed on December 19, 2002, in the 13 Family Court of the County of St . Louis, State o f 14 Missouri . As relevant here, in the Separatio n 15 Agreement petitioner and her former spouse, in effect, 16 agreed to equally split the then outstanding 200 0 17 income tax liability, including "interest and 18 penalties ." The Separation Agreement and th e 19 Parenting Plan provide for child support payments to 20 be made to petitioner by her former spouse, who, from 21 time to time, failed to keep current with respect to 22 those obligations . The tension between petitioner and 23 her former spouse with respect to the suppor t 24 obligations apparently has caused some alienation 25 between petitioner and one or more of her children . Heritage Reporting Corporation (202) 628-4888 5 1 On May 5, 2004, petitioner made a request 2 for relief from her outstanding 2000 income ta x 3 liability under section 6015(f) . As of the date o f 4 her request, child support arrearage exceeded $12,000, 5 a point made in her request for relief . By lette r 6 dated December 10, 2004, petitioner's request fo r 7 section 6015(f) relief was denied . In a Statement of 8 Disagreement ; dated January 7, 2005, petitione r 9 detailed her disagreements with conclusions made in 10 the December letter . Upon appeal of the denial, her 11 request was ultimately denied by respondent's Appeals 12 Office in the notice of determination referenced 13 above . 14 In general, if a taxpayer elects to file a 15 joint Federal income tax return with his or he r 16 spouse, then the taxpayer and the taxpayer' s spouse 17 are jointly and severally liable for the tax shown on 18 the return or otherwise determined to be due . Sec . 19 6013(d)(3) ; Cheshire v . Commissioner , 115 T .C . 183, 20 188 (2000), affd . 282 F .3d 326 (5th Cir . 2002) . 21 In certain situations and subject to a 22 variety of conditions, section 6015 provides for 23 relief from the joint and several liability tha t 24 arises from a joint return . If, as in this case, a 25 taxpayer does not qualify for relief under subsection Heritage Reporting Corporatio n (202) 628-4888 6 1 (b) or subsection (c) of section 6015, then unde r 2 procedures prescribed in Rev . Proc . 2003-61, 2003-2 3 C .B . 296, modifying and superseding Rev . Proc . 4 2000-15, 2000-1 C .B . 447, the Commissioner ha s 5 discretionary authority to relieve the taxpayer from 6 joint and several liability for a particular year if, 7 "taking into account all the facts and circumstances, 8 it is inequitable to hold the individual liable for 9 any unpaid tax or any deficiency (or any portion o f 10 either)" for that year . Sec . 6015(f) . Some of the 11 factors the Commissioner will take into account in 12 considering a taxpayer's claim for section 6015(f) 13 relief are specifically set forth in the above- 14 referenced revenue procedure . Those factors are 15 listed in respondent's comprehensive pretria l 16 memorandum, and little point would be served by 17 repeating them here . 18 In this case respondent took into account 19 the various factors set forth in the revenu e 20 procedure, considered whether each factor weighed in 21 favor of or against petitioner's request for relief 22 after accurate-y applying the facts of petitioner's 23 situation to those factors, concluded that it would 24 not be inequitable to hold petitioner liable for her 25 20004 income tax liability, and determined tha t Heritage Reporting Corporation (202) 628-4888 . 7 1 petitioner is not entitled to relief under sectio n 2 6015(f) . 3 In order to establish that respondent' s 4 denial of her section 6015(f) claim for relief is an 5, abuse of discretion, the evidence must demonstrat e 6 that in not granting relief, the respondent exercised 7 his discretion arbitrarily, capriciously, or without 8 sound basis in law or fact . Woodral v . Commissioner , 9 112 T .C . 19, 23 (1999) . 10 Petitioner disagrees with respondent's 11 finding that she knew or should have known of the 12 underpayment of tax shown on her 2000 return or that 13 that underpayment should be paid . She agrees , 14 however, that holding her liable for the 200 0 15 liability would not be a financial hardship . Her real 16 concern is that her former spouse, chronicall y 17 delinquent on his child support payments, will not 18 contribute his fair share towards the outstandin g 19 joint 2000 tax liability . Her concern is exacerbated 20 by the fact that he is self-employed and he r 21 assumption that respondent would be more likely to 22 collect from her, a salaried employee, than from her 23 former spouse, a self-employed individual . With the 24 exception of her disagreement regarding respondent's 25 conclusion regarding her knowledge at the time th e Heritage Reporting Corporation (202) 628-4888 8 1 2000 return was filed, petitioner has called ou t 2 attention to no other factual or legal errors made by 3 respondent . 4 The manner in which respondent applied the 5 relevant criteria set forth in the above-reference d 6 Revenue Procedure is clearly and extensively set forth 7 in respondent's pretrial memorandum . 8 Whether we agree or disagree with respondent 9 on all points is of no consequence . We cannot 10 substitute our judgment for respondent's whe n 11 reviewing respondent's determinations for abuse o f 12 discretion . Patton v . Commissioner , 116 T .C . 206, 210 13 (2001) ; Wiest v . Commissioner , T .C . Memo . 2003-91 . 14 Under the circumstances presented, we do not find that 15 respondent's denial of petitioner's request fo r 16 section 6015(f) relief was arbitrary, capricious , or 17 without sound basis in law or fact . It follows that 18 respondent's determination to deny petitioner' s 19 request for section 6015(f) relief is not an abuse of 20 discretion . 21 To reflect the foregoing, decision will be 22 entered for respondent . This concludes the Court's 23 oral findings of fact and opinion in this case . 24 (Whereupon, at 11 :28 a .m ., the bench opinion 25 in the above-entitled matter was concluded . ) Heritage Reporting Corporation (202) 628-4888