TAX COURT OPINION

Case: Sabrina Genevieve Gehrs, Petitioner, and Chad M. Swinehart, Intervenor
Docket Number: 27882-08S
Judge: Colvin
Opinion Type: bench
Filed: 12/16/2009
Pages: 8

UNITED STATES TAX COURT Washington, D .C . 2021 7 SABRINA GENEVIEVE GEHRS , Petitioner , Docket No . 27882-08 S and CHAD M . SWINEHART, Intervenor , V . COMMISSIONER OF INTERNAL REVENUE , Respondent . . 0 R {ID E R 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 th e pages of the transcript of the . trial of the above case before Special Trial Judge Lewis R . Carluzzo at Miami, Florida, on November 20, 2009, . 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 under Rule 155 . Dated : Washington, D .C . December 16, 2009 (Signed) Lewis R. Carluzzo Special Trial Judg e SERVED DEC 1 7 2009 3 1 Bench Opinion by Special Trial Judge Lewis R . Carluzzo 2 November 20, 200 9 3 Gehrs v . Commissioner Docket No . 27882-08S 4 THE COURT : . The Court has decided to render 5 oral findings of factlL and opinion in this case, an d 6 the following represents the Court's oral findings of 7 fact and opinion . The oral findings of fact an d 8 opinion shall not be relied upon as precedent in any 9 other case . 10 Section references contained in this bench 11 opinion are to the Internal Revenue Code of 1986, as 12 amended, in effect for the relevant period . Rul e 13 references are to the Tax Court Rules of Practice an d 14 Procedure . This § 6015(e) proceeding is a small tax 15 case conducted pursuant to the provisions of § 746 3 16 and Rules 170 through 175 . This bench opinion is made 17 pursuant to the authority granted by § 7459(b) and 18 Rule 152 . 19 Sabrina Gehrs appeared pro se . Chad 20 Swinehart appeared pro se . Dawn Clark appeared on 21 behalf of Respondent :I In a notice of determination 22 dated August 21, 2009, Respondent denied Petitioner's 23 claim for Section 6015 relief from her unpaid 200 5 24 federal income tax liability . The relevant facts, 25 many of which have been stipulated and are so found, Heritage Reporting Corporatio n (202) 628-4888 4 1 are for the most part not in dispute and easily 2 summarized . 3 Petitioner and Intervenor married in 1999 . 4 They separated in 20 65 and were divorced in 2006 . 5 They have two children . As had . been their practice 6 for prior years, Petitioner and Intervenor filed a 7 joint federal income return for 2005 (the join t 8 return) . Petitioner has no specific recollection of 9 reviewing or signing the return . Nevertheless, under 10 the circumstances, we find it more likely than no t 11 that she did both . 12 The following items of income are no t 13 included in the income reported on the joint return : 14 (1) $2,614 from a retirement account held b y 15 Intervenor ; (2) $15,444 from Advance Me, Inc . 16 evidenced by a Form 1099 nonemployee compensatio n I 17 'issued by that company showing Petitioner as th e 18 payee ; (3) $3,389 frm Sterling Funding, LLC also 19 evidenced by a Form 1099 issued by that company 20 showing Petitioner as the payee ; and (4) $13 in 21 interest income fromja Sun Trust interest bearing 22 account . 23 These four income items will sometimes b e 24 referred to collectively as the omitted income items . 25 Although, Petitioner"now concedes that she is no t Heritage Reporting Corporation (202) 628-4888 5 1 entitled to § 6015 relief with respect to the interes t 2 from Sun Trust, and that item will not specifically b e 3 further discussed . Ian a notice of deficiency, see § 4 6212, issued to Petitioner and Intervenor for 2005 , 5 Respondent adjusted the income reported on the joint 6 return by the omitted income items . 7 The resulting deficiency was not challenged 8 in this Court, and that deficiency presumably along 9 with the related amounts was assessed in due course . 10 Petitioner describediher status during 2005 as a 11 "stay-at-home mom ." The evidence demonstrates tha t 12 she provided no services to either Advance Me, Inc . or 13 Sterling, Funding, LLC . Her name was used b y 14 Intervenor in connection with both companies in order 15 to conceal a potential conflict of interest wit h 16 another of his employers . 17 Petitioner was aware of Intervenor' s 18 arrangement with Advance Me, Inc ., or at least she 19 should have been, as(she did sign the operative 20 documents establishing an independent contracto r 21 relationship with that company . She was not aware of 22 Intervenor's arrangement with Sterling Fund, Inc ., and 23 nothing in the record suggests that she was aware of 24 the $2,614 distribution from Intervenor's retirement 25 account . HeritagelReporting corporation (202) 628-4888 6 1 The income .from Advance Me, Inc . an d 2 Sterling Funding, LLC was paid through numerous checks 3 in various amounts each showing Petitioner as th e 4 payee . Petitioner endorsed some of the Advance Me, 5 Inc . checks , and some of the proceeds from at least 6 two of those checks was used to repay a loan t o 7 Petitioner ' s parents . In general , married taxpayers 8 may elect to file a joint federal income tax return . 9 Section 6013(a) . 10 After making the election , each spouse is 11 jointly and severally liable for the entire amount o f 12 tax reported on the return as well as for th e 13 liability of any deficiency subsequently determined, 14 even if all of the income giving rise to the ta x 15 liability is allocable to only one of them . Section 16 6013(d)(3) ; Cheshire v . Commissioner , 115 T .C . 183 , 17 188 (2000), affd . 282 F .3d 326 (5th Cir . 2002) ; Butler 18 v . Commissioner 114 T .C . 276, 282 (2000) ; see § 19 1 .6013-4(b) Income Tax Regs . 20 Subject to various conditions and in a 21 variety of ways, an individual who has made a joint 22 return may elect to seek relief from the joint and 23 several liability arising from that joint retur n 24 pursuant to § 6015 . There are three types of relief 25 available under that section . Heritage Reporting Corporation (202) 628-4888 7 1 In general, § 6015(b) (1) provides full o r 2 apportioned relief from joint and several liability, § 3 6015(c) provides proportionate tax relief to divorced 4 or separated taxpayers, and § 6015(f) provide s 5 equitable relief from joint and several liability i n 6 certain circumstances if relief is not available under 7 § 6015(b) or (c) . A spouse or former spous e 8 requesting relief under any or all of thes e 9 subsections generally has the burden of proof . 10 McClelland v . Commissioner T .C . Memo 2005-121 ; § 11 1 .6015-3(d)(3), Income Tax Regs .. 12 Under § 6015(c) however, the Commissioner 13 has the burden to show actual knowledge of an item 14 giving rise to a deficiency if a taxpayer other wise 15 qualifies for relief under that section . See § 16 6015(c)(3)(C) . In this case, Petitioner has requested 17 relief under all three subsections of 6015 . Th e 18 requirements to qualify for relief under thos e 19 subsections are adequately set forth in Respondent's 20 pretrial memorandum served on Petitioner o n 21 November 5, 2009, and will not be discussed in detail 22 in this bench opinion . 23 Instead, after a general comment or two, .. we 24 will summarize our findings with respect t o 25 Petitioner's entitlement to relief under § 6015 . Se e Heritage Reporting Corporation (202) 628-4888 8 1 § 7463(a) . Petitioner's presentation at tria l 2 strongly suggests that she believes that she should be 3 relieved of liability because the omitted income items 4 are not attributable to her . 5 Had she and Intervenor filed separat e 6 federal income tax returns for 2005, we would no t 7 surprised if it were ultimately determined that, with 8 the exception of the Sun Trust interest, the omitte d 9 income items should have been reported on Intervenor' s 10 return and not on Petitioner's return . See Lucas v . 11 Earl , 281 U .S . 111 (1930) . Petitioner's focus on 12 whose income it was however misses the point . 13 Because a joint return was filed, th e 14 question of whether the omitted income was hers or, 15 Intervenor's is not as important as the questio n 16 regarding the extent of her knowledge with respect to 17 the omitted income items at the time the return was 18 signed . Focusing on that question and applying the 19 applicable provisions of § 6015 to the fact s 20 summarized above, we :find as follows : 21 (1) Petitioner knew or had reason to know 22 of the understatement of tax attributable to th e 23 omission of income from Advance Me, Inc ., and she is 24 not entitled to relief from the liability attributable 25 to that item under § 6015(b) or (c) ; (2) Petitione r Heritagel!Reporting Corporation (202) 628-4888 9 1 did not know or have reason to know of the 2 understatement of tax attributable to the omission of 3 income from Sterling, Funding, Inc . for the 4 distribution from Intervenor's retirement account, and 5 she is relieved of liability attributable to thos e 6 items under either § ;6015 (b) or 6015(c) ; 7 And (3) taking into account the factors set 8 forth in Respondent's pretrial memorandum, Petitioner 9 has failed to establish that she is entitled to relie f 10 under § 6015(f) . To'reflect the foregoing, decisio n 11 will be entered under Rule 155 . This concludes th e 12 Court's oral findings of fact and opinion in this 13 case . 14 (Whereupon, at 9 :47 a .m ., the bench opinion 15 in the above-entitled matter was concluded . ) 16 17 18 19 20 21 22 23 2 4 25 Heritage ; Reporting Corporation 1(202) 628-4888