TAX COURT OPINION

Case: Maria D. Apessos
Docket Number: 10649-11
Judge: Morrison
Opinion Type: bench
Filed: 08/16/2012
Pages: 24

UNITED STATES TAX COURT WASHINGTON, DC 20217 MARIA D. APESSOS, ) ) Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent ) Docket No. 10649-11. ) ) ) ) ORDER OF SERVICE OF TRANSCRIPT Pursuant to Rule 152(b), Tax Court Rules of Practice of Procedure, there is transmitted herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Judge Richard T. Morrison, at Philadelphia, Pennsylvania, on June 29, 2012, containing his oral findings of fact and opinion rendered at the conclusion of the trial. In accordance with the oral findings of fact and opinion, a decision will be entered for respondent. (Signed) Richard T. Morrison Judge Dated: Washington, D.C. August 16, 2012 SVED AUG 1 7 2012 1 2 3 4 5 6 7 8 9 lo 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Bench Opinion by Judge Richard Morrison June 29, 2012 Apessos v. Commissioner Docket No. 10649-11 3 THE COURT: The Court has decided to render Oral Findings of Fact and Opinion in this case. The following represents the Court's Oral Findings of Fact and Opinion, which shall not be relied on as precedent in any other case. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. All section references are to the Internal Revenue Code of 1986, as amended, and all rule references are to the Tax Court Rules of Practice and Procedure Procedural Background: In January 2010, Maria D. Apessos submitted to the Internal Revenue Service (IRS) a Form 8857, Request for Innocent Spouse Relief, requesting relief under Section 6015(f) from joint-and-several liability for the underpayment of a joint income-tax liability owed for the tax year 2008. A On January 20, 2011, the IRS issued to Mrs. Apessos a final appeals determination letter denying her request. On or about April 19, 2011, Mrs. Apessos filed a timely petition with this Court, seeking our review of that determination. At the time she filed Heritage Reporting Corporation (202) 628-4888 4 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 petition, Mrs. Apessos resided in Pennsylvania. On June 25, 2012, at the Court's trial session in Philadelphia, Pennsylvania, the case was tried. The parties submitted a stipulation of facts (with Exhibits 1-J through 18-J. We hold that Mrs. Apessos is not entitled to the relief she seeks. Findings of fact: Mrs. Apessos was born in Greece on February 25, 1951. She has been living in the United States since 1969. She and Mr. Apessos were married in 1968 and remain married. Mrs. Apessos's level of education is high school graduate. Mrs. Apessos and her husband previously owned a residential property located at 1870 August Drive, Huntingdon Valley, Pennsylvania (the "Huntingdon Valley house"). Mrs. Apessos and her husband formed a Pennsylvania Limited Partnership know as 1142 East Erie Avenue Associates, LP, (the "Limited Partnership"). The Limited Partnership owned commercial property located at 1142-52 East Erie Avenue, Philadelphia, Pennsylvania. On April 25, 2008, the Limited Partnership settled a sale contract under which it sold the commercial property. The sale resulted in a capital gain. The contract sale price was $1.1 million. 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 5 On or about September 25, 2008, Mrs. Apessos and her husband purchased their current residence, located at 1810 Morris Circle, Southampton, Pennsylvania (the "Southampton house"), for a purchase price of $292,500 cash without a mortgage. At the time of trial, the Southampton house had a value of approximately $275,000 and did not have a mortgage. On or about April 15, 2009, Mrs. Apessos and her husband requested and received an extension of time to file their 2008 tax return until October 15, 2009. No payment accompanied the request for an extension. On or about May 14, 2009, Mrs. Apessos and her husband sold the Huntingdon Valley house. The sale price was $445,000. After settlement charges and mortgage payoff, Mrs. Apessos and her husband received proceeds of $83,799.63. Mrs. Apessos and her husband received these proceeds after the April 15, 2009 due date of their 2008 income tax return. &n S9, Mrs. Apessos and her husband filed a joint federal income7tax return for the tax year 2008. The return reported a tax liability of $64,313. No tax was remitted with the return. Therefore, the balance reported due on the return was $64,313. The outstanding tax liability due Heritage Reporting Corporation (202) 628-4888 in Sptember 200% [Vk Åpessos Med för Øno#& il bankruptcy. 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 for 2008 stems primarily from a $619,294 capital gain reported on the joint return for the sale of the commercial property. Mrs. Apessos signed the return. She was aware that there was a balance due for federal income taxes for 2008 when she signed the return. On January 15, 2010, the IRS received Mrs. Apessos's Form 8857, Request for Innocent Spouse Relief, requesting relief under Section 6015(f) from joint-and-several liability for the underpayment of the joint income-tax liability owed for the year 2008. 7 On her Form 8857, Mrs. Apessos reported gross monthly income, as of January 8, 2010, of $1,743, but she did not report any living expenses. Mrs. Apessos's request for innocent-spouse relief was assigned for review in the IRS's Innocent Spouse Unit in Covington, Kentucky. On April 14, 2010, the IRS received from Mrs. Apessos a Form 12508, Questionnaire for Non- Requesting Spouse. On May 24, 2010, the IRS issued a preliminary determination letter denying the relief Mrs. Apessos requested for the tax year 2008. In response to the preliminary determination, Mr. Apessos sent the IRS a letter dated June 17, 2010, stating his disagreement with the 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 7 preliminary determination. On June 25, 2010, the IRS received from Mrs. Apessos a Form 12509, Statement of Disagreement, requesting that her case go to IRS _appeals. On December 27, 2010, IRS Appeals Officer Stanley Caudell held a telephone conference with Mrs. Apessos. Appeals Officer Caudell determined that Mrs. Apessos is not entitled to the relief requested for the year 2008. On January 20, 2011, the IRS sent Mrs. Apessos a final appeals determination letter. On October 25, 2011, Mrs. Apessos and her representative met with the IRS trial counsel. On or about January 15, 2012, Mrs. Apessos submitted to IRS trial counsel a completed Form 433-A, Collection Information Statement. On that form, she reported that she and her husband had gross monthly income of $2,308, and that she and her husband pay $2,300 per month for living expenses. The living expenses reported comprise $800 for food/clothing/miscellaneous, $800 for housing and utilities, $200 for vehicle operating costs, $400 for health insurance, and $100 for out-of-pocket health care costs. 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 Let's go off the record. (Pause off the record.) THE COURT: Let's go on the record. IRS trial counsel requested that the IRS Innocent Spouse Unit review Mrs. Apessos's appeal under the guidelines set forth in a proposed revenue procedure, found in Notice 2012-8, 2012-4 I.R.B. 309, instead of the guidelines set forth in Rev. Proc. 2003-61, 2003-2 C.B. 296. Applying the guidelines set forth in the proposed revenue procedure, the Innocent Spouse Unit determined that Mrs. Apessos is not entitled to the relief requested. Calculated as of May 21, 2012, the balance due from Mrs. Apessos and her husband for the tax year 2008, plus accruals, is $87,826.39. Opinion: A husband and wife generally may elect to file a joint federal income-tax return. Section 6013(a). After making such an election, each spouse becomes jointly and severally liable for the tax due on the spouses' aggregate income. See Section 6013(d) (3). An individual who has made a joint return may elect to seek relief from joint-and-several liability understtbsections (b), (c), and (f) of -fection 6015. Section 6015(a) (f). Where the IRS denies a requesting spouse 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 9 éction 6015 (f) , that individual may petition the Court to determine the appropriate relief available, as Mrs. Apessos has done. Section 6015(e) (1) (A). We determine whether a requesting spouse is entitled to equitable relief de novo, Porter v. Commissioner, 132 T.C. 203, 210 (2009), and the requesting spouse bears the burden of proving entitlement to such relief, see Rule 142(a). Pursuant to its grant of authority under -dection 6015(f), the IRS has provided guidelines for determining whether an individual qualifies for equitable relief in Rev. Proc. 2003-61, 2003-2 C.B. 296. The Court considers these guidelines in light of the attendant facts and circumstances to determine whether equitable relief is appropriate, but is not bound by them. See Pullins v. Commissioner, 136 T.C. 7 432, 438-439 (2011); McGhee v. Commissioner, T.C. Memo. 2010-259, 100 T.C.M. (CCH) 473, 474 n.8 (2010). The guidelines begin tablishing threshold requirements that, the IRS contends, must be satisfied before a request for equitable relief should be considered. See Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297-298. They next set forth certain safe harbor conditions which, if met, may result in a 77 grant of equitable relief. See id. sec. 4.02 2003-2 9 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 10 C.B. at 298. Finally, they provide a nonexclusive list of factors that should be considered in determining whether Section 6015(f) relief is prope'r. See id, sec. 4.03, 2003-2 C.B. at 298-299. On January 6, 2012, the IRS released Notice 2012-8, 2012-4 I.R.B. 309, proposing a revenue 277 procedure that, if finalized, would revise the factors to be examined in determining the requesting spouse's claim for equitable relief under MetStion 6015 (f) . We continue to apply the factors in Rev. Proc. 2003-61, 2003-2 C.B. 296, in view of the fact that the proposed revenue procedure is not final and because the comment period under the notice only recently.closed. When a factor would turn out differently under the proposed evenue procedure; we call attention to the effectf(if any of the revision on that factor. 7 Threshold Conditions. Rev. Proc. 2003- 17 V . 61, sec. 4.01, 2003-2 C.B. at 297-298, sets forth seven threshold conditions that a requesting spouse must satisfy before a request for relief under,Êection 6015(f) will be considered. Those conditions are: (1) the requesting spouse filed a joint return for the taxable year for which relief is sought; (2) relief is not available to the requesting spouse under JtíÊion 6015 (b) or (c) ; (3) the 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 11 requesting spouse applies for relief no later than two years after the date of the IRS's first collection activity with respect to the taxpayer that occurs after July 22, 1998; (4) the spouses did not transfer assets between themselves as part of a fraudulent scheme; (5) the nonrequesting spouse did not transfer disqualified assets to the requesting spouse; (6) the requesting spouse did not file or fail to file the return with fraudulent intent; and (7) absent certain enumerated exceptions, the tax liability from which the requesting spouse seeks relief is attributable to an item of the nonrequesting spouse. Notice 2012-8, sec 3.01, 2012-4 I.R.B. at 311, eliminates the two-year deadline to request equitable relief and replaces it with the period of limitations provided by section 6502 (relating to collection) orMéction 6511 (relating to filing a claim for credit or refund). The IRS does not argue that Mrs. Apessos's request 1s untimely under Rev. Proc. 2003-61 or Notice 2012-8. E The IRS does not contest that Mrs..Apessos meets the first six conditions. It asserts that she only partially satisfies the seventh enumerated condition, i.e., that the liability from which relief is sought is attributable to an item of the 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 12 nonrequesting spouse. According to the IRS, 50 percent of the gain on the sale of the commercial property -- the gain that gave rise to the unpaid tax liability -- is an item of income attributable to Mrs. Apessos. Mrs. Apessos does not argue otherwise. In evaluating the seventh enumerated condition, there is a difference between Rev. Proc. 2003-61 and Notice 2012-8. Under Rev. Proc. 2003-61, sec. 4.01(7), 2003-2 C.B. at 297-298, Mrs. Apessos must show that the gain from the commercial property is an item of income attributable to Mr. Apessos. However, the gain from the commercial property (which was jointly owned) is an item of income attributable to both spouses, not just Mr. Apessos. Therefore, under the Rev. Proc. 2003-61 guidelines, Mrs. Apessos is ineligible for the relief she seeks. no nomGl.-. -~~ ks Although the IRS conceded that she partly -- satisfies the seventh enumerated condition, this concession assumes the applicability of Notice 2012-8 to these proceedings. Notice 2012-8, sec. 4.01(7), 2012-4 I.R.B. at 312, provides that when the liability is partially attributable to an item of the requesting spouse, then relief can only be considered for the portion of the liability attributable to the nonrequesting spouse. Notice 2012-8 is not 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 13 controlling. Nonetheless, in the interest of completeness, we will not ur analysis here. II. Safe Harbor Conditions: Where the threshold conditions are met, equitable relief with respect to an underpayment of tax reported on a joint return may be granted where each of three safe-harbor conditions is met. See Rev. Proc. 2003-61, sec. 4.02, 2003-2 C.B. at 298. These conditions are: (1) when the relief is requested, the requesting spouse is no longer married to, or is legally separated from, the nonrequesting spouse, or has not been a member of the same household as the nonrequesting spouse at any time during the twelve months before the request for relief; (2) when the requesting spouse signed the joint return, he or she did not know or have reason to know that the nonrequesting spouse would not pay the tax liability; and (3) the requesting spouse will suffer economic hardship if relief is not granted. Id As we discuss below, Mrs. Apessos fails to meet any of these safe harbor conditions. III. Facts and Circumstances Test: Our statutory charge under Jifcc'tion 6015 (f) is to determine whether a taxpayer is entitled to equitable relief on the basis of all the facts and circumstances. We 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 14 review a claim for equitable relief underØ!'ction 6015(f) de novo. See Porter v. Commissioner, 132 T.C. at 210. Where a requesting spouse satisfies each of the threshold requirements but fails to satisfy the safe harbor conditions under Rev. Proc 2003-61, sec. 4.02, 2003-2 C.B. at 298, the requesting spouse is nevertheless eligible for equitable relief under Section 6015(f) if, taking into account all of the facts and circumstances, it is inequitable to hold the requesting spouse liable for an underpayment. See sec. 6015(f) v. Proc. 2003-61, sec. 4.03, 2003-2 C.B. at 298-299, lists eight nonexclusive factors to consider in determining whether it is inequitable to hold the requesting spouse liable for all or any part of the unpaid tax. No single factors is determinative; rather, all factors are weighed in the light of the surrounding fats and circumstances to determine whether equitable relief is appropriate. Rev. Proc. 2003-61, sec. 4.03(2), 2003-2 C.B. at 298-299. Marital Status: The first factor to be weighed is whether the requesting spouse is legally separated, living apart, or divorced from the nonrequesting spouse. Id. sec. 4.03(2) (a) (i), 2003-2 C.B. at 298. Mr. and Mrs. Apessos have been married continuously since 1968, and they have resided 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 15 together in the same house. Although they live in separate areas of the same residence (she on the second floor, he on the first floor), this is inconsequential because a husband and wife who reside in the same house are considered members of the same household. Cf. sec. 1.6015-3(b) (ii), Income Tax Regs. (relating to proportionate relief under Section 6015 (c) This factor weighs against relief. Unlike Rev. Proc. 2003-61, sec. 4.03(2) (a) (i), 2003-2 C.B. at 298, Notice 2012-8, sec. 4.03(2) (a), 2012-4 I.R.B. at 313, states that the marital-status factor is neutral where a husband and wife are still married. Notice 2012-8, sec. 4.03(2) (a) (iv), 2012-4 I.R.B. at 313, expressly sets forth the rule that spouses are considered members of the same household for any period in which they maintain the same residence. 2. Economic Hardship: The second factor for consideration is whether the requesting spouse would suffer economic hardship were relief not granted. Rev. Proc. 2003-61, sec. 4.03(2) (a)(ii), 2003-2 C.B. at 298. Our analysis of whether such economic hardship would occur is directed to the requesting spouse's economic circumstances at the time 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 16 of trial. Porter v. Commissioner, 132 T.C. at 211 n.7.- Economic hardship, for purposes of ection 6015(f), occurs where the requesting spouse is unable to pay his or her reasonable basic living expenses if held liable, in whole or in part, for the tax owed. See sec. 301.634 UWB Administrative Regulations. ij b) (4) (i) , Procedural & A taxpayer's ability to pay basic living expenses is determinéd by considering, among other t_bdã5fs~~-' the individual's age, employment status and history, ability to.earn, ^¾eurs and number of dependents; the amount reasonably necessary for food, clothing, housing, medical expenses, transportation, and current tax payments; the cost of living in the geographic area in which the taxpayer resides; & ndÂy-'ot¼ifr'extraordinary circumstances. See sec. 301.6343-1(b) (4) (ii), Procedural and Administrative Regulations. While an inquiry into the reasonableness of basic living expenses considers the individual taxpayer's unique circumstances, it does not require an allowance to maintain affluent or luxurious standards of living. See sec . 301. 6343 -1 (b) (4 ) (i) , Procedural and Administrative Regulations. Mrs. Apessos was unemployed and was 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 17 supported by government benefits when the trial of this case was held. Although the record concerning her financial status at the time of trial is inadequately developed, we conclude that Mrs. Apessos was able to meet her basic living expenses. The Southampton house, where she and her husband reside, was owned free and clear of any encumbrances. In the form she submitted to IRS trlal counsel, which is part of the trial record, Mrs. Apessos stated that the couple's income was virtually equal to their expenses. However, the reported expenses included an $800 per month housing-and - U utilities expense and, given that there are no mortgage or rental payments due for the Southampton house, we are not convinced that Mr. And Mrs. Apessos paid $800 for housing and utilities expenses. Therefore we conclude that, even largely accepting Mrs. Apessos's own reporting, she had some income exceeding expenses.f73 0° Furthermore, the fact that Mr. Apessos was able to eat. taurants for virtually every meal, and that Mrs. Apessos was able to travel to Greece every year confirms that Mrs. Apessos was able to meet her basic living expenses. This factor weighs.against relief. 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 18 The guidelines for determining whether a requesting spouse will suffer economic hardship differs somewhat under Notice 2012-8, sec. 4.03(2) (b), .2012 d.R.B. at 313. In particular, if the requesting spouse's monthly income is less than 250 percent of federal poverty guidelines, or if the requesting spouse's monthly income (after expenses) is $300 or less, the requesting spouse will be deemed to suffer economic hardship and this factor will weigh in favor of relief. Notice 2012-8, sec. 4.03(2) (b), 2012-4 I.R.B at 313. no n However, the requesting spouse will not be deemed to suffer economic hardship and this factor will not weigh in favor of relief if the requesting spouse has sufficient assets to pay part of the liability and still satisfy reasonable basic living expense. See id. Under Notice 2012-8, sec. 4.03(2) (b), 2012-4 I.R.B. at 313, the economic hardship factor is considered neutral where denying the relief requested will not result in economic hardship to the requesting spouse In documents submitted to the IRS, Mrs. Apessos reported monthly income virtually equal to expenses. Although we found above that Mrs. Apessos has some monthly income in excess of expenses, the 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 19 record is not sufficiently developed for us to precisely determine her monthly income after expenses. However, we do find that Mrs. Apessos has sufficient assets with which to pay at least a part of the tax liability and still be able to meet reasonable living expenses . Mrs. Apessos has an interest in a house worth approximately $275,000 and on which she could obtain a mortgage. Although a mortgage would require Mrs. Apessos to make monthly mortgage payments, we found that she had some income (after expenses) with which ay the monthly mortgage expense . We do not She CouJd take the view that Mrs. Apessos could pay the entire liability (or half of the liability), but the question is whether she can pay a portion of the liability. We find that she can. Under the Notice 2012-8, 2012-4 I.R.B. 309, guidelines, this factor would be neutral. 3. Knowledge or Reason to Know: The third factor in the case of an underpayment of tax contemplates whether the requesting spouse knew or had reason to know that the nonrequesting spouse would not pay the incomeztax liability when the return was signed. See Toppi v. Commissioner, T.C. Memo. 2008- avD 156, 95 T.C.M. (CCH) 1612, 1615 (2008); Rev. Proc. 2003-61, sec 4.03(a) ii), 2003-2 C.B. at 298. 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 20 Mrs. Apessos argues that she had no reason to believe that her husband would not pay the liability reported on the 2008 return because she was not involved in the couple's finances and the couple had never had problems with the IRS before. We have interpreted the knowledge requirement in an underpayment case as focusing on whether the taxpayer knew that his or her spouse would not pay the tx within a reasonably prompt time after filing the joint return. See Banderas v. Commissioner, T.C. Memo. -129, 93 T.C.M. (CCH) 1247, 1251 (2007); cf. Notice 2012-8, sec. 4.03(2) (c) (ii), 2012-4 I.R.B. at 314. Mr. Apessos declared bankruptcy shortly before the filing of the 2008 tax return. Mrs. Apessos knew that the couple would have trouble paying the tax reported on the 2008 tax return. This is confirmed by statements made by both Mr. And Mrs. Apessos during the administrative process in which the IRS considered innocent spouse relief. This factor weighs against relief. 4. Nonrequesting Spouse's Legal Obligation: The fourth factor of consideration is whether the nonrequesting spouse was under a legal obligation to pay the outstanding tax liability under a divorce 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 21 decree or other agreement. See Rev. Proc. 2003-61, MND. sec. 4.03(a) (iv), 2003-2 C.B. at 298. The record does not show Mrs. Apessos was legally obligated under a divorce decree or other contractual arrangements to pay the tax liability on the 2008 return. This factor is neutral. 5 . Significant Bene f it A The f i f th f actor to be weighed is whether the requesting spouse benefitted from the unpaid income tax liability beyond normal support. See Rev. Proc. 2003-61, sec. 4.03(2) (a) (v), 2003-2 C.B. at 299. A significant benefit may be direct or indirect. Sec. 1.6015-2(d), .Income Tax Regs. By failing to pay their 2008 tax liability through withholding or estimated tax payments, Mr. and Mrs. Apessos were able to purchase the Southampton house without a mortgage. We conclude hat Mrs. Apessos received a significant benefit from the unpaid income-tax liability. Accordingly, this factor weighs against relief. 6. Compliance With Tax Laws: The sixth factor for consideration is whether the requesting spouse has made a good faith effort to comply with income-tax laws in years after the year ch relief is requested, e Rev. Proc. 2003-61, sec. 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 22 4.03(2) (a) (vi), 2003-2 C.B. at 299. In recent case law we have consistently recognized that a taxpayer's good faith effort to comply with income tax laws in the years following the year for which relief is requested is a factor weighing in favor of relief. See e.g., Pullins v. urVD Commissioner, 136 T.C. at 452; Karam v. Commissioner, T.C..Memo. 2011-230, 102 T.C.M. (CCH) 311, 315 (2011); Hiramanek v. Commissioner, T . Memo. 2011-280, 102 T.C.M. (CCH) 546, 550 (2011); Haqqerty v. Commissioner, T. . Memo. 2011-284, 102 T.C.M. (CCH) 563, 566 (2011). The Appeals Officer, Stanley Caudell, found that Mrs . Apessos "has been tax compliant . " However, IRS workpapers related to the case, dated February 21, 2012, statefVÊhat Mrs. Apessos "has not filed 2009, 2010 returns . " IRS trial counsel, in a pretrial memorandum states: "Respondent's counsel determined that Petitioner did file a delinquent _federal income tax return for 2009 which Respondent received on June 3, 2010." (. . The pretrial memorandum, of course, 1s not evidence, although it serves as a concession that, at the very least, Mrs. Apessos filed a late return for 2009. IRS trial counsel concludes that this factor 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 23 weighs against relief. Given Mrs. Apessos's circumstances (she reads English with difficulty; her husband handled her financial affairs), we consider this factor neutral. Notice 2012-8, sec. 4.03(2) (f), 2012-4 I.R.B. at 314-315, states that full compliance with the tax laws weighs in favor of relief and that good faith partial compliance should be considered neutral. 7. Abuse: Abusive behavior by the nonrequesting spouse toward the requesting spouse is a factor favoring relief. Rev. Proc. 2003-61, sec. 4.03(2) (b) (i), 2003-2 C.B. at 299. Abuse may be physical or mental. Nihiser v. Commissioner, T. . Memo. 2008-135, 95 T.C.M. (CCH) 1531, 1536-1537 (2008). Mrs. Apessos does not allege that she was abused by Mr. Apessos. Consequently, this factor is neutral. 8. Mental or Physical Health: The final enumerated factor focuses on whether the requesting spouse was in poor mental or physical health on the date she signed the tax return or when relief was requested. Rev. Proc. 2003-61, sec. 4.03(2) (b) (ii), 2003-2 C.B. at 299. Where the requesting spouse is not in poor mental or physical health, this factor is considered neutral. See id. sec. 4.03(2) (b), 2003-2 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 24 C.B. at 299 h----- Although the administrative record reflects statements by Mrs. Apessos that she has arthritis of the knees and was depressed, IRS Appeals did not conclude that these conditions demonstrated poor mental or physical health. More importantly, the testimony at trial did not demonstrate that she was in poor mental or physical health. This factor is neutral. 9. Conclusion: Of the factors listed in Rev. Proc. 2003-61, sec. 4.03, 2003-2 C.B. at 298-299, none favors relief, four weigh against relief (marital status, economic hardship, knowledge or reason to know, and significant benefit) and four are neutral (legal obligation, compliance with tax laws, physical abuse, and mental or physical health). 7 our analysis, as informed by Rev. Proc. 2003-61, 2003-2 C.B. 296, we conclude that Mrs. Apessos is not entitled to equitable relief. If Notice 2012-8, 2012-4 I.R.B. 309, were to be applied, two otherwise negative factors (marital status and economic hardship) turn neutral. This rebalance of factors, however, would not alter our perception that Mrs. Apessos is not entitled to equitable relief. After balancing the record as a whole and with due 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 25 consideration of the equitable considerations presented, we hold that Mrs. Apessos is not entitled to relief from joint-and-several liability under Mction 6015 (f) . In so deciding, we have considered all of Mrs. Apessos's argument for a contrary holding, and to the extent not discussed herein, we conclude they are irrelevant, moot, or without merit. To give effect to the foregoing, decision will be entered in favor of theffe'spondent. This conclude the Court's Oral Findings of Fact and Opinion in this case. The Court is in recess. (Whereupon at 9:36 a.m., the bench opinion in the above-entitled matter was concluded.) // // // // // // // // // // // Heritage Reporting Corporation (202) 628-4888