TAX COURT OPINION

Case: Claudia Diana Coggins
Docket Number: 11779-07
Judge: Colvin
Opinion Type: bench
Filed: 05/27/2008
Pages: 6

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 CLAUDIA DIANA COGGIN S Petitioner, * V . Docket No . 11779-07 COMMISSIONER OF INTERNAL REVENUE Respondent . * * ORDE R FILE S Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith to petitioner and to respondent a copy of the pages of the transcript of the trial of the above case before Judge Joseph R . Goeke at Baltimore, Maryland, on May 5, 2008, containing his oral findings of fact and opinion rendered at the conclusion of trial . In accordance with the oral findings of fact and opinion, decision will be entered for respondent . (Signed) Joseph Robert Goeke Judge DATED : Washington, D .C . May 27, 2008 SERVED MAY 3 0 2008 3 1 Bench Opinion by Judge Joseph Robert Goeke May 5, 200 8 2 Coggins v . Commissioner Docket No . 11779-0 7 3 THE COURT : The Court has decided to render 4 oral findings of fact and opinion in this case, an d 5 the following represents the Court's oral findings of 6 fact and opinion . The oral findings of fact an d 7 opinion shall not be relied upon as precedent in any 8 other case . 9 This bench opinion is made pursuant t o 10 Section 7459(b) of the Internal Revenue Code, and Rule 11 152 of the Tax Court Rules of Practice and Procedure . 12 Section references in this bench opinion are to the 13 Internal Revenue Code . 14 This case was before the Court for review of 15 Respondent's determination that Petitioner should be 16 denied relief from joint and several liability, under 17 Section 6015(f) . 18 Petitioner timely petitioned final 19 determination letters Respondent issued to th e 20 Petitioner, which determined that Petitioner was not 21 entitled to relief, under Section 6015(f) . 22 Let's go off the record for a second . 23 (Whereupon, a short recess was taken . ) 24 THE COURT : Back on the record . Petitioner 25 sought relief from outstanding joint tax liabilities Heritage Reporting Corporatio n (202) 628-4888 4 1 for the years 1985, 1986, 1987, 1988, 1989, 1991, 2 1992, 1993, 1996, 2000, and 2002 . 3 The pattern for all these years is similar . 4 As Petitioner testified, her husband was a n 5 independent contractor who operated a dumptruck . He 6 would receive 1099 income, and file a Schedule C on 7 their joint return reporting that income and th e 8 related expenses . There were no estimated tax 9 payments made with respect to his income . 10 Petitioner testified that after a certain 11 point in time, she did begin to have extr a 12 withholdings from her earnings as a registered nurse 13 to try to cover the additional tax owed on he r 14 husband's earnings . But every year, or at least the 15 years in issue, the Petitioners would unreport the 16 amount of tax shown on the return, and thei r 17 liabilities would increase . 18 We find the Petitioner's testimony to be 19 credible, and we appreciate her efforts to hold her 20 family together and to struggle to pay these ta x 21 liabilities . 22 Respondent determined that the Petitione r 23 knew during the years in question that the liabilities 24 would not be paid when the joint returns were filed, 25 and Petitioner admitted as much at trial . Heritage Reporting Corporation (202) 628-4888 5 1 Petitioner did make a strong case that due 2 to her family situation and the fact that her husband 3 is now no longer engaged in gainful employment o r 4 business activities, that there is economic stress on 5 her family that would be dramatically increased if she 6 should be held liable for these tax liabilities . 7 So we find that Respondent's determination 8 that the factor involving economic distress as being 9 unfavorable to the Petitioner is incorrect . However , 10 we must review all of the applicable factors in Rev . 11 Proc . 2003-61 as set forth in Section 4 .03(2)(a) of 12 the Rev . Proc . 13 This Court has previously accepted those 14 factors in other cases involving the review o f 15 Respondent's determinations under Section 6015(f) . 16 (See E . G . Farmer v . Commissioner , T .C . Memo 2007-74 .) 17 Respondent's determinations are tha t 18 Petitioner was not abused ; that she knew the ta x 19 liabilities would not be paid ; and that she remains 20 married to her husband, with whom she filed the joint 21 returns in question . That her husband does not have a 22 legal obligation to solely pay those liabilities, and 23 that she herself is not in poor mental or physica l 24 health . 25 Respondent admits that Petitioner did not Heritage Reporting Corporatio n (202) 628-4888 6 1 receive a significant benefit beyond normal support 2 relative to the taxable income in question, and 3 Respondent admits that Petitioners made an attempt to 4 comply with the federal income tax law . 5 As stated previously, the parties disagree 6 on whether the income tax liability would caus e 7 economic hardship . And we find, based on the record, 8 that it would, which is contrary to Respondent' s 9 determination . 10 However, we think the record is clear that 11 Petitioner was well aware that the taxes in question 12 would not be paid at the time the joint returns were 13 filed . And although the Petitioner made numerou s 14 efforts over many years to resolve these tax 15 liabilities, she continued to file joint returns with 16 her husband, which resulted in unreported incom e 17 nearly every taxable year . 18 Given this factor, which is a strong factor 19 in the Revenue Procedure, we are compelled to uphold 20 Respondent's determination that Petitioner is no t 21 entitled to relief . We do this with a great deal of 22 reluctance, given the Petitioner's circumstances and 23 her efforts to support her family over these many 24 years . 25 We would advise the Petitioner that should Heritage Reporting Corporatio n (202) 628-4888 1 2 3 4 5 6 7 8 9 10 11 12 13 1 4 15 1 6 1 7 1 8 1 9 2 0 2 1 2 2 2 3 2 4 25 7 Respondent pursue collection actions, such as a lie n or levy, she does have recourse to pursue a hearin g and subsequent judicial review in this Court relativ e to those specific collection actions at some subsequent time . Nevertheless, based upon the record in thi s case, we are left with no choice but to enter a decision for Respondent . This concludes the Court's oral findings o f fact and opinion in this case . (Whereupon, at 4 :15 p .m ., the bench opinio n in the above-entitled matter was concluded . ) Heritage Reporting Corporation (202) 628-4888