TAX COURT OPINION

Case: Amal H. Sleiman, Petitioner and Chad Y. Sleiman, Intervenor
Docket Number: 19155-24
Judge: Holmes
Opinion Type: bench
Filed: 06/22/2026
Pages: 18

United States Tax Court Washington, DC 20217 Amal H. Sleiman, Petitioner and Chad Y. Sleiman, Intervenor, Petitioners v. Docket No. 19155-24 COMMISSIONER OF INTERNAL REVENUE, Respondent ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioners and to respondent a copy of the pages of the of the trial of the above case before Judge Mark V. Holmes at Buffalo, New York on May 6, 2026, containing his oral findings of fact and opinion rendered after the conclusion of trial. In accordance with the oral findings of fact and opinion, an appropriate decision will be entered. (Signed) Mark V. Holmes Judge Served 06/22/26 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 3 Bench Opinion by Judge Mark V. Holmes May 6, 2026 Amal H. Sleiman, Petitioner and Chad Y. Sleiman, Intervenor v. Commissioner of Internal Revenue Docket No. 19155-24 THE COURT: So in the case of Amal H. Sleiman, Petitioner, and Chad Y. Sleiman, Intervenor v. Commissioner, the Court has decided to render oral findings of fact and opinion in this case, and the following is the Court's oral findings of fact and opinion. This bench opinion is made pursuant to the authority granted by section 7459(b) of the Internal Revenue Code of 1986 as amended, and Rule 152 of the Tax Court's Rules of Practice and Procedure. Both Mr. and Mrs. Sleiman are New York residents when the petition was filed. Appellate venue presumptively lies with the Second Circuit. BACKGROUND Amal and Chad Sleiman timely filed a joint tax return for tax year 2016. The return showed a total tax of $610 primarily due to a $199,068 claimed loss from Schedule E attributable to an S corporation named SanUVAire. The loss stemmed from the SanUVAire's corporate return where Ms. Sleiman was listed as a 31 percent owner and Mr. Sleiman was a 49 percent owner. 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 This S corporation had been formed in early 2016 by Mr. 4 Sleiman, and this was its first return. As a result, Petitioner and Intervenor received a refund of $57,147. The Sleiman's marriage had long been troubled. ' MH And around September 2018, the Sleimans began living apart. In approximately July 2019, the Commissioner began an examination of SanUVAire's return for tax years 2016, 2017, and 2018, in addition to the couple's joint returns. By June 2020, the parties reached an agreement as to tax year 2016, under which the Sleimans consented to an assessment of $56,574. Shortly thereafter, in June of 2022, Mrs. Sleiman timely filed a Form 8857, a Request for Innocent Spouse Relief. The Commissioner's Centralized (sic) Cincinnati Innocent Spouse Operation granted partial relief under Code section 6015(b). On appeal to the IRS's Office of Appeals, the relief was granted her -- partial MH relief was granted her under Code section 6015(c). When Ms. Sleiman timely filed a petition with the Court contesting this final determination on April 7th, 2025, Mr. Sleiman filed a Notice of Intervention, becoming a party in these cases. As the Commissioner's counsel considered them, he agreed that Ms. Sleiman was entitled to full relief, but under section 6015(f). Mr. Sleiman opposes this grant of full relief. ANALYSIS 5 With certain exceptions, a husband and wife may elect to file a joint return. Code section 6013(a). If they elect to file a joint return, both husband and wife are jointly and severally liable for the entire tax due on that return. Code section 6013(d)(3). However, a spouse may seek relief from joint and several liability under section 6015. Respondent contends that while Ms. Sleiman was previously granted partial relief under 6015(b) and then partial relief under section 6015(c), she is entitled to further relief under section 6015(f), amounting to full relief for the 2016 tax liability. So we have all three subsections of 6015 in play. I'll begin my own analysis under 6015(b). And as Code section 6015(e)(7) tells me, I will review this de novo on the basis of the administrative record that was established by the IRS as it was considering Ms. Sleiman's claim for relief, as well as any newly discovered or previously unavailable information that I received. In this case, that new information consisted of the testimony of Mr. and Mrs. Sleiman, as well as one exhibit that Ms. Sleiman wanted to introduce. That's Exhibit 18-R. As I said, I will begin with 6015(b) 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 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 relief. There are five conditions for this relief. 6 "A joint return has been made for a taxable year; "on such return, there is an understatement of tax attributable to erroneous items of one individual filing the joint return; "the other individual filing the joint return establishes that in signing the return, he or she did not know and had no reason to know that there was such understatement; "taking into account all the facts and circumstances, it is inequitable to hold the other individual liable for the deficiency in tax for such taxable year attributable to such understatement; "the other individual elects the benefits of this subsection not later than the date, which is two years after the date the secretary has begun collection activities." About two of these factors, there is no doubt. There is no doubt that the Sleimans filed a joint tax return for tax year 2016. There is also no doubt that Ms. Sleiman elected to seek relief within the two years that collection began. Indeed, in a matter of months after she received notice that the IRS was trying to collect from 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 her own income, the tax debt that the IRS had concluded was owed by both Sleimans. 7 MH I'll begin with the third factor. There is no doubt that there was an understatement of tax attributable to an erroneous item on the Sleimans' 2016 tax return. The dispute under this factor is whether that understatement was attributable to Mr. Sleiman alone. Let me first review what that item is. The IRS, in its administrative consideration of this case, identified that the only understatement is for business income under a subchapter S corporation. The increase in adjusted gross income also caused changes in deductions and exemptions. I agree with this. By far, the largest adjustment was the disallowance of this very large loss from SanUVAire that was passed through to the Sleimans on their joint tax return. Everything else was a computational adjustment. The question of whether this income is attributable to Mr. Sleiman alone is the one that is in dispute. He started the company with a third party with whom he was having an adulterous affair. I find it extremely credible that Ms. Sleiman did not participate in any way in this company. She had a full-time job of her own. It is true that Mr. Sleiman had arranged paperwork, apparently, or at least had reported to the IRS that she , MH 8 was a 31 percent owner in this company. But I believe Ms. Sleiman when she testified that this came as a surprise to her, and she learned about it only during the audit of the couple's 2016 tax return. I don't believe that she was the owner in SanUVAire in any meaningful way. She did not contribute her own resources, her own labor, her own knowledge, or her own capital. This was a nominee situation, in other words. There's a similar example given in the Commissioner's own Revenue Procedure about innocent spouse relief. Revenue Procedure 2013-34. In talking about whether the wife's name on an IRA means that she is necessarily the owner and responsible for income tax attributable to ownership of an IRA, the Commissioner himself says, "W establishes that W did not contribute to the IRA, sign paperwork relating to the IRA, or otherwise act as if W were the owner of the IRA. W thereby rebuts the presumption that the IRA is attributable to W." That's the situation we have here, and Mr. Sleiman didn't even present an operating agreement or any other signature of Ms. Sleiman's that would actually make her owner of 31 percent of SanUVAire. Indeed, the Court heard extremely credible testimony that he had forged her signature on the deed to the family house, trying to 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 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 9 transfer it to himself alone. His credibility was not high as a result of these incidents. My conclusion is therefore that it is more likely than not that the erroneous item in this case attributable to Ms. Sleiman's alleged 31 percent ownership of SanUVAire is in fact attributable to Mr. Sleiman alone. The next contested factor is whether at the time she signed the return, Ms. Sleiman knew or should have reason to know that there was an understatement on the return. As did the IRS in its administrative capacity, I certainly find that Ms. Sleiman had no actual knowledge of the understatement on the return. As I said, she did not participate in SanUVAire in any way. The question, though, is whether she had reason to know of the understatement on the return. Here, there were a couple of factors that I looked at, the most important of which is that at the time she signed the return, she knew that her husband had been laid off and had a business with somebody doing something. But for most of the year, he had been employed and received nearly a quarter of $1 million in income from Cisco Cysco (sic). And this income was so substantial that the MH additional income and losses did not lead to an adjusted gross income that someone in Ms. Sleiman's position would have necessarily known anything about. She kind of knew about the business, but how much she knew would be might 10 MH troubling to me. However, the regulation also goes on to create an exception for situations in which there has been abuse. This is Treasury Reg section 1.6015-3(c)(2)(B)(v), "If the requesting spouse establishes that he or she was the victim of domestic abuse prior to the time the return was signed, and that, as a result of the prior abuse, the requesting spouse did not challenge the treatment of any items on the return for fear of the nonrequesting spouse's retaliation, the limitation on actual knowledge in this paragraph (c) will not apply." Here's where I find that there was abuse in this situation, and I have to find whether this abuse exception applies. This was a point of great contention during the trial. Abuse, of course, is not a bright line concept. Abuse comes in many forms and can include physical, psychological, sexual, or emotional abuse, including efforts to control, isolate, humiliate, and intimidate the requesting spouse or to undermine that spouse's ability to reason independently and be able to do what is required under the tax laws. All the facts and circumstances are considered in whether a requesting spouse was abused. Here, the evidence in the administrative record and the credible testimony of Ms. Sleiman showed numerous 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 police reports that her husband was engaging in domestic 11 abuse amounting, in fact, to domestic violence. He threw boiling water at her and burned her arms. He was physically violent towards their minor children. He had a five-year order of protection against Ms. Sleiman, and there was even a report that I found credible in the administrative record that he hid 20 guns in the family's home that Ms. Sleiman didn't know about until the ceiling collapsed. There was credible testimony as well from Ms. Sleiman here in court of physical abuse, emotional abuse in the form of false reports to her employer about stealing government property or about her being drunk. There were more threats of violence against her minor children that were reported in the administrative record. then MH The IRS, in its consideration of her request for innocent spouse relief, did note that most of these reports were after the marriage broke up when Ms. Sleiman discovered her husband's adulterous conduct. However, the first arrest in the record was way back for aggravated harassment in 2005, early in the couple's marriage, when they had only one very small child. Moreover, I have to take into consideration Mr. Sleiman's behavior in court itself. He harassed and badgered Ms. Sleiman when he had the opportunity, as was 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 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 his right, to cross-examine her. He commented and asked 12 her or demanded her to, "cut the shit out". Indeed, the Court, gavel-less, had to tell him to shut up, it got so bad. He even accused her of bringing witchcraft into the marital home. I thus find it more likely than not that even well before the date that the joint return was signed and filed, that Mr. Sleiman was engaged in a persistent pattern of abuse that worsened but did not begin after Ms. Sleiman discovered his affair with his business partner. I therefore find the knowledge factor, even if Ms. Sleiman had reason to know of the understatement of the liability, is overcome by this actual abuse. To the extent that the regulation talks only about overcoming the actual knowledge factor, I am exercising my authority to extend the abuse exception to understatements about which the Petitioner had reason to know. This was the case in which it was very close to duress. The abuse was that severe. The final factor that I have to consider under 6015(b) is whether it would be inequitable to hold Ms. Sleiman liable under the circumstances for the unjust -- I'm sorry, for the unpaid tax debt. Inequitability is obviously a somewhat diffused concept. 26 CFR 1.6015-2(d) MH tells us to look to the Revenue Procedure in effect at the time of the Court's decision. That Revenue Procedure, 13 Revenue Procedure 2013-34, contains an open-ended list of factors, but none of the parties suggested adding any of their own. These factors are set out in the Revenue Procedure at section 4.03, and I will go through them now. A. Marital Status. "Whether the requesting spouse is no longer married to the nonrequesting spouse. A requesting spouse will be treated as no longer married to the nonrequesting spouse only in the following situations: .-. . . the requesting spouse is legally separated from the nonrequesting spouse under applicable state law." Ms. Sleiman is, in fact, legally separated from Mr. Sleiman. This factor weighs in favor of relief. B. Economic Hardship. Whether the requesting spouse will suffer economic hardship if relief is not granted. The Revenue Procedure describes at some length what economic hardship means. The key is 250 percent of the Federal poverty guidelines. Ms. Sleiman has income that is above 250 percent of the Federal poverty guidelines. And here the Revenue Procedure is somewhat cryptic. It says if the requesting spouse's income exceeds 250 percent of the Federal poverty guidelines, this factor will still weigh in favor of relief if the requesting spouse's monthly income exceeds the requesting 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 14 spouse's reasonable basic monthly living expenses by $300 or less, unless the requesting spouse has assets out of which she can make payments for the tax liability. But the Revenue Procedure also says if the requesting spouse's income exceeds 250 percent of the Federal poverty guidelines and monthly income exceeds monthly expenses by more than $300 or if the requesting spouse qualifies under either standard but has sufficient assets, the Service will consider all facts and circumstances in determining whether there is economic hardship. The situation of Ms. Sleiman isn't covered by the literal terms of either of these conditions. She has a monthly income that is more than 250 percent of the Federal poverty guidelines, but her monthly living expenses are very high. They in fact exceed her income. I will construe, therefore, the Revenue Procedure to say that in this situation, I have to look to see whether she has assets that would help pay down the tax liability or whether these monthly expenses are reasonable and exceed her income so that she would suffer economic harm if she were held liable for the tax debt that remains unpaid. In this case, I note that she credibly testified that she had very high legal expenses. Mr. Sleiman has prolonged these divorce proceedings for eight years, and 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 she credibly testified that she's had to dip into her 15 retirement savings, triggering withdrawal tax under the Code. She's borrowing money from family members, asking for money from family members to get by. So she's in a situation where even though her monthly income does not exceed her monthly living expenses, her monthly living expenses actually exceed her income. And under these circumstances, I weigh this as a factor favoring relief. C. Knowledge or Reason to Know. Here, I'm asked to look at as of the date of the joint tax return, was the requesting spouse abused by the nonrequesting spouse? And because of the abuse or financial control, did she not challenge the treatment of any items on the joint return for fear of the nonrequesting spouse's retaliation? If I find that, this factor weighs in favor of relief. And as I've already said, in regard to the knowledge inquiry under 6015(b), I do find that Ms. Sleiman was the victim of domestic abuse and domestic violence. This factor too weighs in favor of granting 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 relief. 23 24 25 D. Legal Obligation. This factor requires me to ask whether Ms. Sleiman had a legal obligation to pay the outstanding Federal income tax liability. A legal 16 obligation is an obligation arising from a divorce decree or other legally binding agreement. This factor will weigh in favor of relief if the nonrequesting spouse has sole legal obligation to pay the outstanding income tax liability pursuant to a divorce decree or agreement. Now, the Sleimans are not actually divorced. They're subject to a separation agreement under New York State law. However, at the end of the audit, Mr. Sleiman agreed, in writing, with Ms. Sleiman, as Ms. Sleiman proved with the introduction of Exhibit 18-R that, "Amal is relieved and not responsible for any or all taxes owed for 2016, '17, '18 per the audit and report provided. I'll assume responsibility. Dated 6/23/20, Chad Sleiman, countersigned by Amal Sleiman." I find this to be a legal agreement that obligates Mr. Sleiman, as between the two of them, to pay this income tax liability that was attributable to the erroneous underreporting of the corporation that he was running with his mistress. This factor thus weighs in favor of relief from Ms. Sleiman. E. Significant Benefit. Whether Ms. Sleiman significantly benefited from the unpaid income tax liability or understatement. A significant benefit is any benefit in excess of normal support. The IRS, both on appeal and administratively at the CCISO, found that there 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 17 was no significant benefit in excess of normal support as a result of the understatement of taxes here. On my de novo review, even Ms. Sleiman conceded that this factor is neutral, and I certainly find that it is neutral under these circumstances. F. Compliance with Income Tax Laws. Here, I'm asked to decide whether Ms. Sleiman has made a good faith effort to comply with income tax laws in the taxable years following the year for which she requests relief. The Revenue Procedure goes on to instruct that if Ms. Sleiman remains married to Mr. Sleiman but files separate returns, this factor will weigh in favor of relief if she is compliant with the tax laws and weighs against relief if she is not. If Ms. Sleiman made a good faith effort to comply with the tax laws but was unable to fully comply, then this factor will be neutral. For example, the Revenue Procedure says, "If the requesting spouse timely filed an income tax return but was unable to fully pay the tax liability due to the requesting spouse's poor financial or economic situation as a result of being separated or living apart from the requesting spouse, then this factor will be neutral." That's what happened here. This factor is therefore neutral. G. Mental or Physical Health. This factor will 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 weigh in favor of relief if the requesting spouse was in 18 poor mental or physical health at the time the return or returns for which the request for relief relates were filed. Here, I believe the credible testimony that Ms. Sleiman gave that she was under mental distress with physical consequences. She was treated after April '17 when the 2016 return was signed and filed. But I find it certainly more likely than not that these conditions of poor mental and physical health caused by her husband's abuse and the difficulty of the situation she found herself in this troubled marriage were present at the time she filed the return. Therefore, this factor too weighs in favor of relief. With no factors weighing against relief, this is an easy call on the question of whether it would be inequitable to hold Ms. Sleiman liable for any portion of the 2016 tax debt that the couple owes. I, therefore, conclude that on my de novo review of the administrative record and the evidence newly available before me, that it is more likely than not that Ms. Sleiman is entitled to relief from her joint tax liability under section 6015(b). The Respondent may expect an order asking him to prepare a Decision that recognizes any right to a refund under the terms of that 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 19 subsection. This concludes the Court's oral findings of fact and opinion in this case and the Buffalo session this year. Thank you all. We are adjourned. (Whereupon, at 11:00 a.m., the above-entitled matter was concluded.) 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