TAX COURT OPINION

Case: Mark Steven Guzman
Docket Number: 25241-13
Judge: Buch
Opinion Type: bench
Filed: 03/30/2015
Pages: 4

CMS UNITED STATES TAX COURT WASHINGTON, DC 20217 MARK STEVEN GUZMAN, Petitioner, v. ) ) ) ) Docket No. 25241-13. 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 with this order to both petitioner and respondent a copy of the pages of the transcript of the trial in this case that contain the oral findings of fact and opinion that was rendered at the trial session at Milwaukee, Wisconsin. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Ronald L. Buch Judge Dated: Washington, D.C. March 30, 2015 SERVED Mar 30 2015 Capital Reporting Company 3 1 Bench Opinion by Judge Ronald L. Buch 2 March 17, 2015 3 Mark Steven Guzman v. Commissioner 4 5 Docket No. 25241-13 THE COURT: The following represents the 6 Court's oral Findings of Fact and Opinion. The oral 7 8 9 10 11 12 Findings of Fact and Opinion may not be relied upon as precedent in any other case. This Opinion is in conformity with Internal Revenue Code Section 7459(b), and Rule 152 of the Tax Court Rules of Practice and Procedure. Any section references refer to the Internal Revenue Code or the Treasury 13 Regulations in effect during the year at issue and 14 15 16 17 18 19 20 21 22 23 24 25 Rule references are to the Tax Court Rules of Practice and Procedure. FINDINGS OF FACT Petitioner Mark Guzman was divorced in 2010. Leading into that divorce he had significant credit card debt. One of those credit card liabilities was owed to Citi Bank. Under the terms of the judgment of divorce, Mr. Guzman' s ex-wife was to pay the Citi Bank credit card debt, among others; whereas, Mr. Guzman was to pay specified other debts. Apparently his ex-wife failed to meet her obligations under the judgment of divorce. In 2011 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 Citi Bank issued a Form 1099-C to Mr. Guzman for 2 3 4 5 6 7 8 9 10 11 cancellation of indebtedness stemming from the credit card liability that his ex-wife never paid. Based on the limited evidence in the record, it appears that the credit card was in Mr. Guzman's name and he does not allege that when the liability was incurred, the liability was solely that of his ex-wife. OPINION Under Section 6 1(a)(12) of the Internal Revenue Code, a taxpayer who is liable for a debt 12 must recognize income when that debt is forgiven. 13 14 The parties do not dispute that before Mr. Guzman's divorce he and his then ex-wife incurred a debt to 15 City Bank and the limited evidence in the record 16 17 18 19 20 21 22 23 24 25 indicates that Mr. Guzman was liable for that debt. He does not dispute that he was originally liable, however, he points to the 2010 judgment of divorce and claims that it made his ex-wife liable to Citi Bank. There's nothing in the record to indicate that the legal liability to Citi Bank belonged to Mr. Guzman's ex-wife. The record is crystal clear that she had an obligation under the judgment of divorce to pay that liability regardless of whose name the credit card may have been in and we offer no opinion 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 on what rights Mr.Guzman may have, vis-à-vis, his ex- 2 wife. But neither City Bank nor the IRS was a party 5 to that judgment of divorce and Mr. Guzman remained liable to Citi Bank. Thus, when Citi Bank forgave the debt, it was Mr. Guzman' s liability that was forgiven. This T6 case is indistinguishable from Jcnson v Commissioner, den sen TC Memo 2010-77, and we reach the same conclusion here. Decision will be entered for Respondent. MR. FORBORD: Thank you, Your Honor. THE COURT: Thank you. (Whereupon, at 9:18 a.m., the above- entitled matter was concluded.) 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