TAX COURT OPINION

Case: Peter Lassa, Petitioner and Gina M. Jausoro, Intervenor
Docket Number: 29028-13
Judge: Buch
Opinion Type: bench
Filed: 04/27/2015
Pages: 8

UNITED STATES TAX COURT WASHINGTON, DC 20217 DRB PETER LASSA, PETITIONER AND GINA M. JAUSORO, INTERVENOR, Petitioner(s), v. ) ) ) ) ) ) Docket No. 29028-13. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ) ORDER Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it is ORDERED that the Clerk of the Court shall transmit with this order to petitioner, intervenor, and respondent a copy of the pages of the transcript of the trial in this case before Judge Ronald L. Buch at San Francisco, California, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be entered under Rule 155. (Signed) Ronald L. Buch Judge Dated: Washington, D.C. April 27, 2015 SERVED Apr 28 2015 Capital Reporting Company 3 1 Bench Opinion by Judge Ronald L. Buch 2 April 15, 2015 3 4 5 6 Peter Lassa, Petitioner, and Gina M. Jausoro, Intervenor, v. Commissioner Docket No. 29028-13 THE COURT: The following represents the 7 Court's oral findings of fact and opinion. The oral 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 findings of fact and opinion may not be relied upon as precedent in any other case. This opinion is in conformity with Internal Revenue Code section 7459(b) and Rule 152(a) of the Tax Court Rules of Practice & Procedure. Any section references refer to the Internal Revenue Code or the Treasury regulations in effect during the year at issue. The rule references are to Tax Court Rules of Practice & Procedure. Mr. Peter Lassa seeks innocent spouse relief as to years 2008 and 2009. Respondent has gone back and forth regarding allowing innocent spouse relief. After tentatively determining to grant relief under section 6015(c), the IRS later denied relief. Mr. Lassa petitioned while residing in 23 California. 24 25 On answer, Respondent conceded relief. Ms. Gina Jausoro, Petitioner's ex-wife, 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 4 also while residing in California, intervened, opposing relief. If a spouse has petitioned the Court for relief under section 6015, the nonrequesting spouse has a right to intervene in the case under section 6015(e)(4). Corson v. Commissioner, 114 TC 354 (2000); Rule 325. By doing so, the Intervenor becomes a party. Tipton v. Commissioner, 127 TC 214, 217 (2006). After concessions by the parties, the only issue remaining for decision is whether Mr. Lassa is entitled to relief as to certain adjustments that arose during the examination of the couple's 2008 and 2009 returns. Those adjustments relate to itemized deductions for unreimbursed employee expenses, car and truck expenses claimed on Schedule C, profit or loss from business, and, for 2009, expenses for business use of the home reported on Schedule C. The Schedules C for both years identify only Ms. Jausoro as the proprietor and describe her business as outside sales. The Forms 2106-EZ, unreimbursed employee business expenses, for both years identify only Ms. Jausoro and her business of outside sales. And the Form 8829, expenses for 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 2 3 4 5 business use of home for 2009 likewise identifies only Ms. Jausoro and her business of outside sales. The parties dispute the precise level of involvement of Mr. Lassa in reviewing and preparing these forms. The parties agree that Ms. Jausoro's 6 mother prepared the tax returns. The parties 7 8 9 10 11 12 13 14 15 generally agree that Ms. Jausoro determined what expenses related to her business, although Ms. Jausoro contends that Mr. Lassa had the opportunity to review the expenses and the returns, whereas Mr. Lassa contends that he had no such opportunity to review. It is clear to the Court, however, that it was Ms. Jausoro who controlled the reporting of expenses related to her business of outside sales. 16 Mr. Lassa was an on-again, off-again, wage earner 17 with no role in Ms. Jausoro's business. 18 The parties also dispute the extent to 19 which Mr. Lassa was permitted to participate in the 20 21 examination of their joint return. However, given that both parties agree to the adjustments, this, as 22 with many of the personal disputes between Mr. Lassa 23 24 25 and Ms. Jausoro, is irrelevant to the issues before the Court. Discussion: Generally, married taxpayers 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 may elect to file a joint federal income tax return. Section 6013(a). QTpon-f-i-1--iæ-er. Upon e1ecting ta fi1e, jointly, each spouse is jointly and severally liable for the entire tax due for that year. Section 6013(d)(3). In certain circumstances, however, a spouse who filed a joint return may seek relief from joint and several liability under the procedures in section 6015. See section 6015(a). Section 6015(a) allows a spouse to seek relief from joint and several liability under(eeetion subsection (b), or, if eligible, to allocate the liability according to the provisions set forth in subsection (c). If a taxpayer does not qualify for relief under either subsection (b) or (c), the taxpayer may be eligible for equitable relief under subsection (f). Except as otherwise provided in section 6015, the taxpayer bears the burden of proving that he or she is entitled to section 6015 relief. Rule 142(a); Alt v. Commissioner, 119 TC 306, 311 (2002), aff'd, 101 Fed. Appx. 34 (6th Cir. 2004). Both the scope and the standard of our review in cases requesting relief from joint and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 9 10 11 several liability are de novo. Porter v. Commissioner, 132 TC 203, 210 (2009). Under section 6015(c), a divorced or separated spouse may elect to limit liability for a deficiency on a joint return to the portion of the deficiency that is allocable to her under subsection (d). The election may be filed at any time after the deficiency is asserted but not later than two years after the Secretary has begun collection activities. Section 6015(c)(3)(B). Additionally, the electing individual, one, 12 must no longer be married or must be legally 13 14 15 16 17 18 19 20 21 22 23 24 25 separated from the individual with whom the joint return was filed or, two; must not have been a member of the same household with the individual with whom the joint return was filed during the 12-month period before the election was filed. Section 6015(c)(3)(A). Mr. Lassa and Ms. Jausoro had been separated at least 12 months when the election was filed. Subject to certain limitations, any item giving rise to a deficiency on a joint return is generally allocated to the individuals filing the return in the same manner as it would have been if 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 8 1 2 3 4 the individuals had filed separate returns. Section 6015(d) (3)(A). Because all of the items that remain in dispute are attributable to the reporting of 5 Ms. Jausoro's work in outside sales, all of the items 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 would have been reported on Ms. Jausoro's return had she filed separately. An election under section 6015(c) is invalid with respect to all or part of a deficiency if it can be demonstrated that the individual making the election had actual knowledge at the time of signing the joint return of any item giving rise to the deficiency or portion thereof that is not allocable to that individual under section 6015(d). Section 6015(c)(3)(C). Actual knowledge must be demonstrated by a preponderance of the evidence. Culver v. Commissioner, 116 TC 189, 196 (2001). The actual-knowledge standard is narrower than the reason-to-know standard applied under section 6015(b) and (f). McDaniel v. Commissioner, TC Memo 2009-137. Actual knowledge in this sense refers to "Actual knowledge of the factual circumstances which made the item unallowable as a deduction." King v. Commissioner, 116 TC 198, 204 (2001). See also 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 2 3 4 Treasury regulation 1.6015-3(c)(2)(B. Mr. Lassa did not have actual knowledge of Ms. Jausoro's erroneous deductions related to her work in outside sales. Accordingly, the exception 5 potentially invalidating Mr. Lassa's claim for relief does not apply. Mr. Lassa is entitled to relief under section 6015(c) for the adjustments remaining at issue. Because of concessions by the parties, decision will be entered under Rule 155. (Whereupon, at 9:10 a.m., the above- entitled matter was concluded.) 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com