TAX COURT OPINION

Case: Jesseana Teixeira Fernandes
Docket Number: 1356-14S
Judge: Marvel
Opinion Type: bench
Filed: 03/11/2015
Pages: 10

SEC UNITED STATES TAX COURT WASHINGTON, DC 20217 JESSEANA TEIXEIRA FERNANDES, Petitioner(s), v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) Docket No. 1356-14S ) ) ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit to petitioner and to respondent a copy of the pages of the transcript of the proceedings of the above case before Judge L. Paige Marvel at Oklahoma City, Oklahoma, on February 26, 2015, containing the Court's oral findings of fact and opinion. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) L. Paige Marvel Judge Dated: Washington, D.C. March 11, 2015 SERVED Mar 12 2015 Capital Reporting Company 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Bench Opinion by Judge L. PaÊge Marvel 1 Jesseana Teixeira Fernandes v. Commissioner Docket No. 1356-14S I February 26, 2015. THE COURT HAS DECIDED TO RENDER ORAL FINDINGS OF FACT AND OPINION IN THIS CASE AND THE FOLLOWING REPRESENTS THE COURT'S ORAL FINDINGS OF FACT AND OPINION. THE ORAL FINDINGS OF FACT AND OPINION SHALL NOT BE RELIED UPON AS PRECEDENT IN ANY OTHER CASE. This case was heard pursuant to the provisions of section 7463 of the Internal Revenue Code of 1986 (Code) as amended, and Rules 170 through 174 of the Tax Court Rules of·Practice and Procedure. Pursuant to section 7463(b), the decision to be 16 .entered is not reviewable by any other court, and 17 18 19 20 21 22 23 24 25 this opinion shall not be treated as precedent for any other case. This bench opinion is made pursuant to the authority granted by section 7459(b) of the Code as amended, and Rule 152 of the Tax Court Rules of Practice and Procedure. Unless otherwise indicated, subsequent section references are to the Code, and Rule references are to the Tax Court Rules of Practice and Procedure. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 4 5 6 7 8 9 10 11 Mark Widell appeardd on behalf of petitioner. Jamie M. Stipek appeared on behalf of respondent. Petitioner petitioned this Court to contest the determination made by redpondent that she was not entitled to section 6015 relief from income tax liabilities for 2009 and 2010' that resulted from understatements of pétitioner's wage income on joint Federal income tax returns for 2009 and 2010 filed by petitioner and her former husband. The only issue in dispute is whether respondent erred in 12 making that determination. 13 14 15 16 17 18 19 20 21 22 23 24 25 FINDINGS OF FACT 4 Petitioner JesseanalTeixeira Fernandes timely and electronically filed joint Federal income tax returns for 2009 and 2010 with her then husband, Berwyn Holder. Although the j int returns reported wage income, petitioner's wagës from Delta Airlines for 2009 and 2010 were not inbluded in the reported wage income. Petitioner maintains that she gave all of her tax information including the Forms W-2, Wage and Tax Statement, from Delta Airlines to Mr. Holder, who prepared and filed the returns on their behalf, but that Mr. Holder recomputed the wage income reported on the returns without her knowledge or 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 6 approval after she had reviewed the draft returns and then filed the incorrect returns. Petitioner and Mr. Holder divorced on January 19, 2012. Following an examination of the joint returns, respondent determined that the 2009 and 2010 returns had omitted petitioner's wages from 7 Delta Airlines and issued two notices of deficiency - 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 one dated April 23, 2012 with respect to 2009 and one dated May 14, 2012 with respect to 2010. In the notices of deficiency, respondent determined that petitioner and Mr. Holder wer,e liable for income tax deficiencies of $3,835 and $4,856, for 2009 and 2010, respectively. Neither petitioner nor Mr. Holder petitioned this Court, and, a.fter the 90-day period for petitioning the Court had expired, respondent assessed the 2009 and 2010 deficiencies on September 10, 2012, and December 10, 2012, respectively. On December 12, 2015, respondent received Form 8857, Request for Innocent Spouse Relief, from petitioner. Attached to the Form 8857 was a signed and notarized letter from Mr. Holder in which he admitted that he was responsible for the wage reporting error but claimed that the error was a 24 mistake. 25 After respondent determined preliminarily 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 6 that petitioner was not entitled to any relief under secti.on 6015 because the unreported income giving rise to the assessed liabilities was attributable to petitioner, she pursued an administrative appeal to respondent's Appeals Office. On November 13, 2013, the Appeals Office issued its final ·7 determination denying petitioner section 6015 relief. 8 Petitioner filed a timely pet'ition with this Court to 9 contest respondent' s determination. She attached to 10 11 12 13 14 15 her petition two letters signed by Mr. Holder. In the letters, which were introduced into evidence at trial, Mr. ·Holder stated thati he had prepared the joint 2009 and 2010 returns and that .he was responsible for "information that was or was not provided when the tax [return] was filed." However, 16 Mr. Holder did not admit that he had intentionally 17 18 19 20 21 22 23 24 25 reduced the total wage income figures reported on the 2009 and 2010 joint returns. DISCUSSION Ordinarily, taxpaye(cid:0)541swho file joint Federal income tax returns are jointly and severally liable for the income tax liadilities related thereto. Sec. 6013 (d) (3) ; Porter v. Commissioner, 132 T. C. 203, 206 (2009) , abrogating Butler v. Commissioner, 114 T. C. 276 (2000) and Jonson v. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Commissioner, 118 T.C. 106 (2002). In certain circumstances, however, a taxpayer may obtain relief from joint and several liability under section 6015. Section 6015 offers three possible types of relief -- full or partial relief under section 6015(b) for tax liabilities resulting from understatements in certain circumstances, a limitation of liability to that portion of a deficiency properly allocable to the requesting spouse under section 6015(c), and equitable relief under section 6015(f). Peti.tioner claims relief under section 6015(b), (c), and (f). Under both subsections (b) and (c), a requesting spouse must.show that the liabilities for which he or she is requesting relief are attributable to the non-requesting spouse. Any item giving rise to a deficiency on a joint return is allocated to the spouses as if they had filed separate returns. Sec. 6015(d)(3) (A). Erroneous or omitted items of income are allocated to the spouse who was the source of the income. Sec. 1.6015-3(d)(2)(iii), Income Tax Regs. Because a requesting shouse cannot obtain relief under subsection (b) or (c) for an understatement/deficiency attributable to her own unreported income, petitioner is not entitled to relief under section 6015(b) or (c). See, e.g., Gonce 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 v. Commissioner, T.C. Memo. 2007-328, slip op. at 6 (no relief under sec. 6015 (b) for understatement attributable to requesting spouse's unreported iricome ) ;. Weiler v. Commissiorier_, T. C. Memo. 2003-255, slip op. at 8 (no relief unddr sec. 6015 (c) for liability attributable to requesting spouse's income) . We turn then to section 6015(f), which provides that a requesting spouse may be relieved of joint and several liability if (1) taking into account all the facts and cirbumstances, it is inequitable to hold the reque sting spouse liable for the unpaid tax liabilit.y, and| (2) relief is not available to the requesting shouse under section 6015(b) or (c). The Commissioner has published revenue procedures listing the factors that he normally considers in determining whether equitable relief under section 6015(f) should be granted, see Rev. Proc. 2013-34, 2013-43 I.R.B. 397, modifying and · superseding Rev. Proc. 2Ò03-61, 2003-2 C.B. 296, and this Court has generally appld!ed a similar analysis, see, e. g. , Pullins v. Commissi oner_, . 136 T. C. 432, 438-439 (2011) ; Molinet v. Corrimissioner, T. C. Memo. 2014-109. . Section 4.01 of Rev. Proc 2013-34 lists 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 seven threshold conditions that govern eligibility for section 6015(f) relief: (1) the requesting spouse filed a joint return, (2) relief under section 6015(b) or (c) is not available; (3) the requesting spouse files a timely request for relief; (4) no assets were transferred between the spouses as part of a fraudulent scheme; (5) the non-requesting spouse did not transfer disqualified assets to the requesting spouse; (6) the requesting spouse did not knowingly participate in the filing of a fraudulent joint return; and (7) subject to certain exceptions, the tax liability at issue is attributable to an item of the non-requesting spouse. Respondent does not dispute that the first six conditions are met. Respondent disputes only whether petitioner has satisfied the seventh threshold condition. Respondent asserts that because the liabilities at issue are attributable to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 petitioner's unreported wages and because petitioner 120 does not qualify for any of the exceptions set forth 21 22 23 24 25 in Rev. Proc. 2013-34, sec. 4.01(7) that would permit relief even if the liability is attributable to the requesting spouse, respondent properly determined that petitioner is not entitled to section 6015(f) relief. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Rev. Proc. 2013-34, sec. 4.01(7), sets forth five exceptions to the general rule that section 6015(f) relief is not available for any portion of the liability attributable to the requesting spouse. They are as follows: (1) when the item is attributable to the requesting spouse solely because of the operation of community property law; (2) when the requesting spouse's ownership of an income-producing item is only nominal; (3) when the non-requesting spouse misappropriated funds intended for the payment of tax for his or her own benefit and the requesting spouse did not know and had no reason to know of the misappropriation; (4) when the requesting spouse was a victih of abuse prior to the filing of the joint return, a d he or she could not have challenged the treatment of any items on the return or question the payment of any balance du.e reported on the return for feär of t the non-requesting spouse's retaliation; and (5) when the reason for an erroneous item is the non-requesting spouse's fraud (fraud exception). Rev. Proc. 20 13-34, sec. 4.01(7). The only exception hat is at issue is the fraud exception as the record does not contain any credible evidence tha.t the other exceptions are i arguably applicable. Petitioner maintains that the. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 11 1 2 3 4 5 6 7 8 9 draft returns that she revieéed properly reported her income and that Mr. Holder fraudulently omitted petitioner's wage income on the final returns without her knowledge. However, the draft returns are not in evidence, and Mr. Holder did inot testify. The letters signed by Mr. Holder and attdched to petitioner's Form 8857 and her petition state that Mr. Holder prepared the returns and that he is responsible for the error, but there is no credible evidence that the 10 .error was intentional or fraudulent. We are unable to 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 conclude on the basis of the record that Mr. Holder committed fraud with respect to the 2009 and 2010 joint returns. Petitioner has not shown that an exception under Rev. Proc. 2013-34, section 4.01(7) applies, and she is therefore not entitled to relief under section 6015(f). Accordingly, decision will be entered for respondent. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION. (Whereupon, at 3:05 p.m., the above- entitled matter was concluded.) . . . 866.488.DEPO www.CapitalReportingCompany.com r