TAX COURT OPINION

Case: John E. Hebert
Docket Number: 16095-08
Judge: Colvin
Opinion Type: bench
Filed: 07/06/2009
Pages: 9

6DI s 1, K UNITED STATES TAX COURT WASHINGTON , D .C . 2021 7 JOHN E . HEBERT, Petitioner, V . COMMISSIONER OF INTERNAL REVENUE, ) Respondent . Docket No . 16095-08 ORDE 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 the pages of the transcript of the proceedings of the above case before Judge Diane L . Kroupa at Houston, Texas on June 24, 2009, 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 Judg e Date : Washington, D .C . July 6, 2009 SERVED Jul 08 2009 3 1 Bench Opinion by Judge Diane L . Kroupa 2 June 24, 200 9 3 Hebert v . Commissioner Docket No . 16095-08 4 The Court has decided to render ora l 5 findings of fact and opinion in this case, and th e 6 following represents the Court's oral findings of fact 7 and opinion . These oral findings of fact and opinion 8 shall not be relied upon as precedent in any othe r 9 case . 10 This bench opinion is made pursuant to the 11 authority granted by Section 7459(b) of the Internal 12 Revenue Code and Rule 152 of the Tax Court Rules o f 13 Practice and Procedure . All section references are to 14 the Internal Revenue Code for 2002, 2003, 2004, and 15 2005, which years shall be collectively referred to as 16 the years at issue, and all rule references are to the 17 Tax Court Rules of Practice and Procedure . 18 Charles Reed appeared on behalf o f 19 Petitioner, and Ashley Vaughan appeared on behalf of 20 Respondent . 21 FINDINGS OF FAC T 22 Certain facts have been stipulated . The 23 stipulation of facts the parties filed, wit h 24 accompanying exhibits, is incorporated by this 25 reference . The facts are so found . Petitioner Heritage Reporting Corporatio n (202) 628-4888 4 1 resided in Texas at the time he filed the petition i n 2 this case . 3 Petitioner and his ex-wife were married 13 4 years, from May 8, 1993, through October 5, 2006 . 5 They filed joint returns for each of the years at 6 issue, each reflecting a balance due, yet they failed 7 to remit payment with the return . 8 Petitioner and his ex-wife lived in the same 9 house during all of the years at issue . They 10 apparently did not discuss tax issues, excep t 11 Petitioner knew that his ex-wife claimed single and 12 two exemptions for withholding purposes . 13 Petitioner admits that he knew that ther e 14 was an underpayment for the year 2005, but his ex-wife 15 was required, pursuant to the divorce, decree, to pay 16 all income,taxes through 2005 . Petitioner denies that 17 he knew there was an underpayment, however, for 2002, 18 2003, or 2004 . Petitioner believed that his ex-wife 19 filed the returns without his signature for 2002 , 20 2003, or 2004 . The return for 2002 was not filed 21 electronically, while the returns for 2003 and 2004 22 were . 23 During each of the years at issue , 24 Petitioner was employed as a welder instructor at the 25 Federal Bureau of Corrections and had income taxes Heritage Reporting Corporatio n (202) 628-4888 5 1 withheld from his wages . Petitioner completed the W-4 2 to have his employer withhold taxes from his wages . 3 Petitioner failed to have sufficient amounts withheld 4 from his wages to pay the tax liability . 5 Petitioner filed a Form 8857, Request for 6 Innocent Spouse Relief, for the years at issue . 7 Respondent determined that Petitioner is not eligible 8 for relief under either subsection (b) or (c) o f 9 Section 6015 because relief is not available under 10 either of these subsections for underpayments as we 11 have here . 12 Respondent also determined in the Notice of 13 Determination Concerning Your Request for Relief from 14 Joint and Several Liability Under Section 6015, dated 15 April 24, 2008 (the determination notice), tha t 16 Petitioner did not qualify for relief under subsectio n 17 (f) of Section 6015 . Petitioner timely filed a 18 petition asserting that Respondent abused his 19 discretion in denying him relief from joint and 20 several liability . 21 The parties filed a stipulation of settled 22 issues before trial . began . The parties agree that 23 Petitioner is not entitled to relief under subsectio n 24 (b) or (c) of Section 6015 because neither subsection 25 applies to underpayments . Heritage Reporting Corporation (202) 628-4888 6 1 The parties further agree that Petitioner is 2 entitled to relief under subsection . ) for th e F 3 portion of the underpayments attributable to items of 4 his ex-wife . Specifically , Petitioner is entitled to 5 relief of $ 1,307 for 2002 , $ 2,109 for 2003 , $ 396 8 for 6 2004, and $2,773 for 2005 . The remaining underlying 7 liabilities at issue are for the underpayment o f 8 income taxes attributable to Petitioner's wages as 9 reported on the joint income tax returns . '10 OPINION .11 The issue we are asked to decide is whether 12 Petitioner is entitled to relief under subsection (f) 13 of Section 6015 if the remaining liability is solely 14 attributable to Petitioner's wages . 15 We begin with the general principles o f 16 joint returns . Married taxpayers may elect to file a 17 joint federal income tax return with-i-e or her spouse . 18 Sec . 6013(a) . Each spouse-filing the return i s 19 jointly and severally liable for the entire tax shown 20 on the return or otherwise determined to be due . Sec . 21 6013(d)(3) ; Cheshire v . Commissioner , 115 T .C . 183 , 22 188 (2000), affd . 282 F .3d 326 (5th .Cir . '2002) . 23 A taxpayer may seek relief, however, from 24 joint liability under Section 6015 . Section 6015 25 provides for relief from the joint and severa l Heritage Reporting Corporation (202) 628-4888 7 1 liability that arises from a joint return in certain 2 situations and subject to a .variety of conditions . 3 Relief under subsection (f) applies if, taking into 4 account all of the facts and circumstances, it would . 5 be inequitable to find the requesting spouse liable . 6 Respondent agrees that Petitioner satisfies 7 each of the factors and requirements set forth in Rev . 8 Proc . 2003-61, 2003-2 C .B . 296, regarding underpayment 9 amounts attributable to his ex-wife . Responden t 10 argues, however, that Petitioner does not qualify for 11 relief under subsection (f) nor would it b e 12 inequitable to hold . Petitioner liable for th e 13 underpayments attributable to his own wages . We 14 agree . 15 Petitioner seeks relief from the income tax 16 liability attributable to income he earned, no t 17 attributable to income of his ex-wife, the non- 18 requesting spouse . Respondent determined tha t 19 Petitioner is entitled to equitable relief from the 20 portion of the underpayment that is attributable to 21 Petitioner's ex-wife . This is reflected in the 22 stipulation of,settled issues . 23 Respondent thus determined that he is liabl e 24 for the underpayment that is attributable to him . Th e 25 remaining underpayment for which Petitioner is liabl e Heritage Reporting Corporation (202) 628-4888 8 1 is solely attributable to Petitioner's wages . 2 Petitioner failed to have sufficient amounts withheld 3 from his wages to pay the taxes due on such amounts . 4 Petitioner completed the Form W-4 to have his employer 5 withhold taxes . His wife had nothing to do with th e 6 amount of withholding . 7 Petitioner asserts nonetheless that th e 8 Court should absolve him for his own liability for the 9 wages he earned because his ex-wife had a gamblin g 10 habit . Her gambling habit is not what caused the 11 underpayment attributable to Petitioner's wages . 12 Petitioner's under-withholding is-what caused the 13 underpayment attributable to his wages . Respondent 14 has granted Petitioner relief for portions of the 15 underpayment attributable to items of his forme r 16 spouse . 17 Moreover, Petitioner urges the Court to find 18 that his ex-wife handled all the tax matters and that 19 she kept all the tax information from him . Petitione r 20 further wants the Court to find that he . trusted her 21 unconditionally with the taxes because she was smart . 22 To so find would require the Court to find 23 that Petitioner and his ex-wife lived together during 24 all the years at issue and they never discussed taxes 25 or finances . In testing these assertions, the Cour t Heritage Reporting Corporation (202) 628-4888 9 1 notes that Petitioner knew how many exemptions hi s 2 wife apparently was claiming for withholding purposes . 3 This inconsistency is damaging to Petitioner' s 4 credibility . 5 In addition, Petitioner relies upon two 6 cases to argue that Petitioner is entitled t o 7 additional relief under subsection (f) . These cases 8 are Sunleaf v . Commissioner , T .C . Memo . 2009-52 and 9 Sullivan-Alioto v . Commissioner , T .C . Memo . 2008-185 . 10 These cases are distinguishable . Neither of 11 the two cases grants relief for an underpaymen t 12 attributable to the requesting spouse . They bot h 13 relate to liability of the non-requesting spouse . In 14 each case, the Court dealt with the eligibility of a 15 widow to be absolved of the tax liabilities of thei r 16 deceased spouses . 17 Moreover, the widow in Sunleaf sold a house 18 and other assets to,pay the taxes . Here Petitioner 19 secured a loan to pay the mortgage to avoi d 20 foreclosure . The court does not-understand why it 21 would create an economic hardship for Petitioner t o 22 pay the taxes attributable to his wages but apparentl y 23 not cause an economic hardship to pay the mortgage to 24 avoid foreclosure . 25 We agree with Respondent that nothing in the Heritage Reporting Corporation (202) 628-4888 1 0 1 record or from trial convinces us that Petitioner is 2 entitled to relief under Section 6015(f) for th e 3 underpayment attributable to income Petitioner earned . 4 In addition, holding him liable for the 5 underpayment attributable to his wages is not 6 inequitable considering all the facts an d 7 circumstances of this case . Petitioner is therefore 8 liable for $1,564 for 2002, $15 for 2003, $5,569 for 9 2004, and $5,589 for 2005 . 10 We shall issue an order and decision holding 11 to such effect . 12 THIS CONCLUDES THE COURT'S ORAL FINDINGS OF 13 FACT AND OPINION IN THIS CASE . 14 (Whereupon, at 12 :05 p .m ., the bench opinion 15 was concluded . ) 16 17 18 19 20 21 22 23 24 / / 25 Heritage Reporting Corporation (202) 628-4888