TAX COURT OPINION

Case: Steven Ray Baxter
Docket Number: 2864-11
Judge: Kroupa
Opinion Type: bench
Filed: 02/01/2012
Pages: 7

UNITED STATES TAX COURT WASHINGTON, DC 20217 STEVEN RAY BAXTER, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. BW ) ) ) ) ) Docket No. 2864-11 ) ) ) ) ORD E R 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 Diane L. Kroupa at Houston, Texas on January 11, 2012, containing her oral findings of fact and opinion. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) Diane L. Kroupa Judge Dated. Washington, D.C. February 1, 2012 SERVED Feb 03 2012 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 Diane L. Kroupa Docket No. 2864-11 January 11, 2012 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 opi ion is made pursuant to the authority granted in section 7459(b) and Rule 152. All section references a$e to the Internal Revenue Code as amended and in effect for 2005, and all Rule references are to the Tax Court Rules of Practice and Procedure. Mr. Baxter appeared pro se, and Susan Fenner appeared on behalf of res'pondent. FINDINGS OF FACT Certain facts häve 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 Texas at the time he filed the petition. Petitioner suffered a stroke in 2000 that left him unable to work. He relied on social security income as he was unable to otherwise earn a living. Heritage Reporting Corporation (202) 628-4888 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 4 Petitioner and his ex-wife timely filed a joint income tax return for 2005. On the return, they reported $6,691 of social security income and identified $5,687 of that amount as taxable. In fact, petitioner received social security income of $13,382 in 2005, of which $11,375 was taxable. Respondent assèssed additional tax of $855 for 2005. Petitioner filed a Form 8857, Request.for Innocent Spouse Relief. Respondent determined that petitioner is not eligible for relief because all of the understated income e¼cept $23 was attributable to petitioner. Petitioner timely filed a petition. OPINION We are asked to decide whether petitioner is entitled to relief under:section 6015. We begin with the general principles of joint returns. When a husband and wife file a joint Federal income tax return, they are jointly and severally liable for the full amount of the tax. Sec. 6013(d) (3). A spouse may qualify for relief, howe er, from joint and several liability under section 6015(b), (c) or (f) if various requirements are met. P titioner contends he qualifies for full relief from joint liability under section 6015(b) and (c), and if not, that he is entitled to equitable relief under section 6015(f). Heritage Reporting Corporation (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 We apply a de novo scope and standard of review in determining the appropriate relief available under section 6015. Porter v. Commissioner, 132 T.C. 203, 210 (2009). The burden is on petitioner to prove that he is entitled to relief. See Rule 142(a); Porter v. Commissioner, supra at 210. The Commissioner is authorized to grant relief from joint and several liability for tax under section 6015(b) (1) if th taxpayer requesting relief satisfies five requirements. If the requesting spouse fails to meet any one of the five requirements, he fails to qualify for relief. Alt v. Commissioner, 119 T.C. 306, 313 (2002), affd. 101 Fed. Appx. 34 (6th Cir. 2004). One of the five requirements is that an understatement of tax be attributable to erroneous (cid:16)042 items of the other person filing the joint return. Sec. 6015(b) (1) (B). Petitioner and respondent stipulated that the joint return for 200$ shows $6,691 of social security income but that petitioner in fact received $13,382 of social securi y income for that year, of which $11,375 was taxable. The parties further stipulated that responde t accordingly assessed additional tax of $855 for the tax year 2005. As previously mentioned, each of the five requirements of Heritage Repo¶ting Corporation (202) !628-4888 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 6 the statute must be satisfied for relief. Accordingly, petitioner is not eligible for relief from joint and several liability under section 6015 (b) (1), and we need not consi·der the other requirements. Petitioner further claims eligibility for relief under section 6015(c). If the requesting spouse is no longer married to, or is legally separated from, the spou e with whom he filed the joint return, the requesting spouse may elect to limit his liability to the deficiency properly allocable to him. Sec. 6015(c). As discussed above, the parties stipulated that respondent assessed additional tax because the joint return understated petitioner's social security income. Accordingly, petitioner is not eligible for relief from joint and several liability under section 6015(c). A taxpayer who does not qualify for relief under section 6015(b) or (c) can qualify for relief under section 6015(f) if, taking into account all the facts and circumstances, it would be inequitable to hold the taxpayer liable for any unpaid tax or any deficiency. Sec. 6015(f). The Commissioner has outlined procedures for determining whether the requesting spouse qualifies for equitable relief under Heritage Reporting Corporation (202) !628-4888 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 section 6015(f). See Rev Proc. 2003-61, 2003-2 C.B. 296. A requesting spouse must satisfy seven threshold conditions before the Commissioner will consider a request for relief. Id.(sec. 4.01, 2003-2 C.B. at 297. The final threshold condition is that the income tax liability fro which the requesting spouse seeks relief must be att ibutable to an item of the nonrequesting spouse, unlless one of the four enumerated exceptions applies. Id. sec. 4.01(7), 2003-2 C.B. at 297-298. ¡As discussed above, the additional tax assessed is attributable to petitioner. Petitioner does not quali!fy for any of the enumerated exceptions. Id. sec. 4.01}(7),.2003-2 C.B. at 297-298. Accordingly, petitioner hás failed to,meet the threshold conditions for bonsideration for relief from joint and several liability under section 6015(f). We are sympathetic to petitioners' health and financial situations, and understand that $855 is a tremendous amount of money to him at this time. Nevertheless, we are boun by the language of the statute as it is written, and we must apply it equally among all taxpayers. Petitioner does not qualify for relief under section 6015 and therefore is liable for the unpaid Heritage Reporting Corporation (202) 628-4888 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 8 amount for 2005. We shall issue a decision for respondent. THIS CONCLUDES THE COURT'S ORAL FINDINGS OF FACT AND OPINION IN THIS CASE. (Whereupon, at 11:35 a.m., the bench opinion in the above-entitled ma ter was concluded.) // // // // // // // // // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888