TAX COURT OPINION

Case: Angelo Charles Vozzella
Docket Number: 12399-12S
Judge: Carluzzo
Opinion Type: bench
Filed: 06/04/2013
Pages: 9

UNITED STATES TAX COURT WASHINGTON, D.C. 20217 ANGELO CHARLES VOZZELLA, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) ) ) ) Docket No. 12399-12S ) ) ) ) OR DE R Pursuant to the determination of the Court as set forth in its bench opinion rendered on April 26, 2013, it is 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 in the above case before Special Trial Judge Lewis R. Carluzzo at Burlington, Vermont, 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) Lewis R. Carluzzo Special Trial Judge Dated: Washington, D.C. June 4, 2013 SERVED JUN -5 2013 Capital Reporting Company 3 1 2 Bench Opinion by Special Trial Judge Lewis R. Carluzzo 3 April 2 , 2013 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Angelo Charles Vozzella v. Commissioner Docket No. 12399-12S THE COURT: The Court has decided to render oral findings of fact and opinion in this case and the following represents the Court's oral findings of fact and opinion (bench opinion). Unless otherwise noted, section references made in this bench opinion are to the Internal Revenue Code of 1986, as amended, in effect for the relevant period, and Rule references are to the Tax Court Rules of Practice and Procedure. This bench opinion is made pursuant to the authority granted by section 7459(b) and Rule 152. This proceeding is a small tax subject to the provisions of section 7463 and Rules 170 through 175. Pursuant to section 7463(b), the decision entered in this case shall not be treated as precedent for any other case. Except as provided in rule 152(c), this bench opinion shall not be cited as authority. Angelo Charles Vozzella appeared on his own behalf. Patrick F. Gallagher appeared on behalf of 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 respondent. Attached to the petition in this case, filed May 16, 2012, are: (1) a notice of deficiency dated April 16, 2012 (deficiency notice); and (2) a final appeals determination, dated April 19, 2012 (final determination). Both the deficiency notice and the final determination relate to petitioner's 2009 Federal income tax liability. Liberally construing the allegations contained in the petition, it appears that petitioner disputes the determinations made in the deficiency notice as well as respondent's denial of his request for section 6015 relief as shown in the appeals determination. As it turns out and for reasons explained below, we need to focus only on an issue arising from the final determination, that is whether petitioner qualifies for relief under section 6015(f) from the unpaid amount of income tax (underpayment) shown on his 2009 joint Federal income tax return. Some of the facts have been stipulated and are so found. Petitioner resided in Vermont at the time the Petition was filed. Petitioner and Janice Vozzella (petitioner's former spouse) married in 1996. They separated in 2010 and were divorced in 2011. 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 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 each year that they were married they filed a joint Federal income tax return prepared by the same paid Federal income tax return preparer. This is what happened for 2009, even though by the time their 2009 joint Federal income tax return (return) was filed petitioner and his former spouse had already separated. Not all of the income tax liability reported on the return was paid with the return. Although the record does not allow for precision, the underpayment probably results from insufficient Federal income tax withholdings attributable to: (1) the wages paid to petitioner's former spouse; and (2) a taxable distribution from petitioner's annuity. At the time the return was signed by petitioner he was aware of the underpayment, and according to the stipulation of facts, he knew that the underpayment "would not be paid" by his former spouse. In the separation agreement entered into in connection with his divorce from his former spouse, he agreed to be responsible for the underpayment and in January 2011 he entered into an installment agreement with respondent in order to satisfy that liability. Petitioner made numerous payments pursuant 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 to the installment agreement but stopped making those payments soon after his request for Section 6015 relief was received by Respondent on October 5, 2011. Unbeknownst to petitioner, a taxable distribution from a retirement account held by 6 petitioner's former spouse was received by her during 7 8 9 10 11 12 13 14 15 16 17 18 2009 but not included in the income reported on the return (understatement). The understatement resulted in the deficiency determined and penalty imposed in the deficiency notice. A fair reading of petitioner's request for Section 6015 relief suggests that petitioner was seeking relief only from the liability resulting from the understatement. It appears, however, that respondent treated his request to include relief from the underpayment as well, and we do likewise. In general, spouses "may make a single return jointly of income taxes." Sec. 6013(a). Like 19 most decisions, and individual's decision to file a 20 21 22 23 24 25 joint return with the individual's spouse has consequences. One consequence to the individual is the assumption of an income tax liability for income not otherwise attributable to the individual. This is so because if, for any given year, a joint return is made by spouses, then with respect to that year 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 "the tax shall be computed on the aggregate income and the liability with respect to the tax shall be joint and several." Sec. 6013(d) (3), see, Section 1.6013-4 (b) Income Tax Regs. "[J]oint and several liability" for the tax shown on a Federal income tax return means that although the tax may be collected only once, each spouse is responsible for the payment of the entire tax without apportionment between. 9 Cluck v Commissioner, 105 T.C. 324, 326, n.4 (1995); 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Pesch v Commissioner, 78 T.C. 100 (1982); Grubich v. Commissioner, T.C. Memo. 1993-194. In turn, this means that the Commissioner may, as he sees fit, collect the tax from either one. See, Pesch v Commissioner, supra. Section 6015 provides various ways that a taxpayer/spouse can get relief from the joint and several income tax liability resulting from a joint Federal income tax return. Because of the parties' concessions (petitioner, if only by implication, concedes the deficiency and penalty shown in the deficiency notice - respondent in turn, concedes that he is relieved from those liabilities pursuant to Section 6015(c))only one of those ways need be discussed here, that is, if after taking into account 25 all of the facts and circumstances it is inequitable 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 to hold petitioner liable for the underpayment. See, sec. 6015(f). The "facts and circumstances" routinely taken into account for purposes of section 6015(f) are listed in Rev. Proc. 2003-61, 2003-2 C.B. 296, 6 modifying and superseding Rev. Proc. 2000-15, 2000-1 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 C.B. 447. Those factors are adequately discussed in respondent's prerial memorandum and will not be repeated here. Furthermore, whether the application of each factor supports or frustrates petitioner's entitlement to relief under section 6015(f) is sufficiently analyzed in the workpapers and memorandum prepared while petitioner's request for section 6015 relief was under administrative consideration. Because we find no fault with the conclusions reached in those documents, we see little point to repeat that analysis in this bench opinion. It is clear that petitioner knew that a portion of the tax reported on the return was not being paid with the return, even if, as he indicated, he is unsophisticated in matters of Federal income taxation. It is likewise clear that Petitioner could not have had a reasonable expectation that the unpaid portion would be paid by his former spouse after the return was filed. They were already separated, and 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 1 within months after the return was filed he and 2 3 4 5 6 7 8 9 respondent entered into an installment agreement designed to satisfy the underpayment as contemplated in the separation agreement. Furthermore, petitioner's financial situation, then and now, measured against the amount of the underpayment would hardly support a finding that petitioner would suffer a hardship if not relieved from liability from that underpayment. 10 Petitioner candidly admitted as much during his 11 12 13 14 testimony. From his presentation at trial, we would not be surprised to learn that petitioner's claim for section 6015(f) relief from the underpayment not so much reflects his belief that he is entitled to it as 15 much as it reflects his dissatisfaction with the 16 manner in which the marital assets were divided as a 17 18 19 20 21 22 23 24 25 result of his divorce from his former spouse. We have given a fresh look at petitioner's entitlement to Section 6015(f) equitable relief from the underpayment. See, Porter v Commissioner, 132 T.C. 203 (2009). In so doing, we consider petitioner's direct and honest presentation at trial and the factors set forth in the above-cited revenue procedure. Taking into account the facts and circumstances leads to the conclusion that petitioner 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company is not entitled to such relief, and we so hold. To reflect the foregoing and the parties' concessions, decision will be entered under Rule 155. 10 And this concludes this bench opinion. (Whereupon, at 10:10 a.m., the above- entitled matter was concluded.) 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