TAX COURT OPINION

Case: Cecil Reginald Brown
Docket Number: 23525-11
Judge: Kroupa
Opinion Type: bench
Filed: 11/13/2013
Pages: 7

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 CECIL REG1NALD BROWN, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) ) ) ) ORDE R Docket No. 23525-11 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 proceedings of this case before Judge Diane L. Kroupa in San Francisco, California on October 23, 2013, containing her oral findings of fact and opinion rendered at the trial session at which this case was calendared. In accordance with the oral findings of fact and opinion, an appropriate decision will be entered for respondent. (Signed) Diane L. Kroupa Judge Date: Washington, DC November 13, 2013 SERVED WOV 1 4 2013 Capital Reporting Company 3 1 Bench Opinion by Judge Diane 1. Kroupa 2 October 23, 2013 3 Cecil Reginald Brown v. Commissioner 4 5 6 7 8 9 10 11 12 Docket No. 23525-11 THE COURT: 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. These oral findings of fact and opinion shall not be relied upon as precedent in any other case. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. 13 All section references are to the Internal Revenue 14 15 16 17 · Code in effect at all relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure. Cecil Brown appeared pro se, and Matthew 18 Carlson appeared on behalf of respondent. 19 20 21 22 23 24 25 FINDINGS OF FACT Certain facts have been stipulated. The stipulation of facts the parties filed with accompanying exhibits is incorporated by this reference. The facts are so found. Petitioner resided in Antioch, California at the time he filed the petition. Petitioner and 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 his wife filed joint returns for years 2007, 2008 and 2009, the years at issue. Each joint return reflected a balance due, yet neither petitioner nor his wife remitted the required payments. Petitioner was employed as a security guard and lived in the same house as his wife during each of the years at issue. The extent of petitioner's tax discussions with his wife was apparently limited to petitioner signing the joint returns that his wife had someone else prepare. Petitioner admits to signing the joint returns for each of the years at issue. Petitioner further admits to knowing there was an underpayment for each of the years at issue. Petitioner filed a Form 8857 (Request for Innocent Spouse Relief) for the years at issue. Respondent determined that petitioner is not eligible for relief under either subsection (b) or (c) of section 6015, because relief is not available under either of these subsections for underpayments, as we have here. Respondent hee determined that Petitioner 0ÅSo did not qualify for relief under subsection (f) of section 6015, because he did not establish that he had reason to believe the underpayment would be paid. 25 Petitioner timely filed a petition, asserting that 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 respondent abused his discretion in denying him relief from joint and several liability. OPINION The sole issue we are asked to decide is 5 whether petitioner is entitled to relief under 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 subsection (f) of section 6015. We begin with the general principles of joint returns. Married taxpayers may elect to file a single federal income tax return jointly with his or her spouse. Secs. 6015(f); 6013(a). Each spouse filing the return is jointly and severally liable for the entire tax shown on the return, or otherwise determined to be due. Sec. 6013(d) (3); Cheshire v. Commissioner, 115 T.C. 183, 188 (2000), aff'd, 282 F.3d 326 (5th Cir. 2002). A taxpayer may seek relief from this joint liability, however, under section 6015. We apply a de novo scope and standard of review in determining the appropriate relief available under section 6015. Porter v. Commissioner, 132 T.C. 203, 210 (2009). Petitioner has the burden to prove that he is entitled to relief. See Rule 142 (a); Porter v. Commissioner, 132 T.C. at 210. Section 6015 provides for relief from the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 joint liability that arises from a joint return in certain situations and subject to various conditions. 3 Relief under section 6015(f) is available if, taking 6 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 into account all facts and circumstances, it would be inequitable to find a requesting spouse liable. The Commissioner has outlined procedures for determining whether a requesting spouse qualifies for equitable relief under section 6015(f). See Rev. Proc. 2003-61, 2003-2 C.B. 296. Rev. Proc. 213-34 now supersedes Revenue Procedure 2006-61. 003-lol The operative provisions under which respondent determined that petitioner was eligible for equitable relief under section 6015(f) remained essentially unchanged. A requesting spouse must satisfy seven threshold conditions before the Commissioner will consider a request for relief. Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297. The final threshold condition is that the income tax liability from which the requesting spouse seeks relief must be attributable to an item of the non-requesting spouse, unless one of four enumerated exceptions apply. Id. sec. 4.01(7), 2003-2 C.B. at 297-298. As discussed above, a portion of the unpaid tax for 2007 is attributable to petitioner as a 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 security guard. Petitioner does not qualify under any relevant exception. Id. Accordingly, petitioner does not meet the threshold conditions for relief under section 6015(f). A portion of the unpaid tax is attributable to petitioner. Petitioner is likewise not eligible for relief under section 6015(f) for that portion of the unpaid tax attributable to his wife, because the equitable factors set forth in Revenue Procedure 2003-61 weigh in favor of denying relief. Petitioner and his wife filed returns jointly three years in a row, without remitting sufficient money to pay their tax liabilities. Petitioner therefore knew or should have known that the tax would not be paid within a reasonably prompt time. Id. sec. 4.03(2) (a) (iii) (A). Furthermore, petitioner was not in compliance with the income tax laws after the years for which he requested equitable relief, because he continued to underpay the self-assessed tax owed. Id. sec. 4.03(2) (a) (vi). Moreover, we are puzzled by petitioner's assertion that he fully entrusted his tax filing and payment obligations who is wife, who he disparagingly describes in the petition as "having no sense of time 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 or money management. " We also are puzzled that petitioner's spouse purchased a $40,000 time share. Si'mtSwoud 3 Petitioner cannotAturn a lind eye to his tax obligations, yct kncu he and/or his spouse purchased a $40,000 time share. Petitioner does not qualify for relief under section 6015(f), and therefore is liable for the unpaid amount for 2007, 2008 and 2009. We shall issue a decision for respondent. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 1:51 p.m., the above- entitled matter was concluded.) 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com