TAX COURT OPINION

Case: James Gregory Hurnblad
Docket Number: 1880-08S
Judge: Colvin
Opinion Type: bench
Filed: 12/12/2008
Pages: 7

5V4 X a- 4-W tle t UNITED STATES TAX COURT WASHINGTON, D .C . 2021 7 JAMES GREGORY HURNBLA D Petitioner , V . Docket No . 1880-08 S COMMISSIONER OF INTERNAL REVENUE, Respondent . CAL, STAT . S .T . JUG$ O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, 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 of the above case before Special Trial Judge Lewis R . Carluzzo at San Diego, California, on October 27, 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) Lewis R . Carluzzo Special Trial Judg e Dated : Washington, D .C . December 12, 2008 SERVED DEC 16 2008 3 1 Bench Opinion by Special Trial Judge Lewis R . Carluzz o 2 James Gregory Hurnblad v . Commissione r 3 October 27, 2008 Docket No . 1880-08 S 4 THE COURT : The Court has decided to render 5 oral findings of fact and opinion in this case, an d 6 the following represents the Court's oral findings of 7 fact and opinion . This 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 and 14 Procedure . 15 This Section 6015(e) proceeding is conducted 16 as a Small Tax Case pursuant to the provisions o f 17 Section 7463 and Rules 170 through 175 . This bench 18 opinion is made pursuant to the authority granted by 19 Section 7459(b) and Rule 152 . 20 Karen Nicholson Sommers appeared on behalf 21 of Respondent . 22 In a notice of determination, dated October 23 18, 2007, Respondent denied Petitioner's claim fo r 24 Section 6015(f) relief from his paid and unpaid 2005 25 federal income tax liability . In a timely petition, Heritage Reporting Corporatio n (202) 628-4888' 4 1 filed January 22, 2008, Petitioner requests this Court 2 to review Respondent's determination . Ou r 3 jurisdiction to do so is established by Sectio n 4 6015(e), and we review Respondent's determination for 5 abuse of discretion . Butler v . Commissioner , 114 T .C . 6 276, 292-293 (2000) . 7 All of the facts have been stipulated and 8 are so found . At the time the petition was filed, 9 Petitioner resided in California . 10 Petitioner's marriage to Janice Gay e 11 Hurnblad (Ms . Hurnblad) was terminated by decree of 12 divorce filed on November 3, 2006 in the District 13 Court, Clark County, Nevada (the divorce decree) . 14 Earlier that year, their 2005 joint federal income tax 15 return was filed . That return shows a total ta x 16 liability of $16,076, of which only $13,378 was paid 17 through income tax withholdings from the wages of both 18 Petitioner and Ms . Hurnblad . (A small payment o r 19 payments were made towards the outstanding liability 20 after the return was filed . ) 21 Petitioner was aware of the underpayment of 22 tax shown on his 2005 return . It was hi s 23 understanding that the unpaid liability was to be paid 24 by Ms . Hurnblad, but the divorce decree is silent on 25 the point . Heritage Reporting Corporation (202) 628-4888 S It appears that at some point following th e divorce, Ms . Hurnblad filed a bankruptcy proceeding . As best as can be determined from the record, he r decision to file the bankruptcy proceeding prompted Petitioner to seek Section 6015(f) relief from hi s 2005 federal income tax liability . As Petitioner views the matter, it would be unfair to hold hi m liable for the tax if she were relieved of it in the bankruptcy proceeding . Be that as it may, accordin g to an allocation prepared by Respondent's Appeal s Office, the majority of Petitioner's unpaid 2005 ta x liability is attributable to him . In general, if a taxpayer elects to file a joint federal income tax return with his or he r spouse, then the taxpayer and the taxpayer' s spous e are jointly and severally liable for the tax shown on the return or otherwise determined to be due . Section 6013(d)(3) ; Cheshire v . Commissioner , 115 T .C . 183 , 188 (2000), affd . 282 F .3d 326 (5th Cir . 2005) . In certain situations, and subject a variet y of conditions, Section 6015 provides for relief fro m the joint and several liability that arises from a joint return . If, as in this case, a taxpayer does . not qualify for relief under Subsection (b) o r 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 Subsection (c) of Section 6015, then under procedure s Heritage Reporting Corporation (202) 628-4888 6 1 prescribed in Rev . Proc . 2003-61, 2003-2 C .B . 296 , 2 modifying and superseding Rev . Proc . 2005-15, 2001- 1 3 C .B . 447, the Commissioner has discretionary authority 4 to relieve the taxpayer from joint and severa l 5 liability for a particular year if, "taking into 6 account all the facts and circumstances, it i s 7 inequitable to hold the individual liable for any 8 unpaid tax or any deficiency (or any portion o f 9 either)" for that year . Section 6015(f) . 10 The factors that the Commissioner will take 11 into account in considering a taxpayer's claim fo r 12 Section 6015(f) relief are specifically set forth in 13 the above-referenced revenue procedure . Those factors 14 are sufficiently listed in the Form 5402, Appeal s 15 Transmittal and Case Memo, prepared by Respondent's 16 appeals officer, which document has been stipulated 17 into evidence in this case . Little point would be 18 served by repeating the analysis contained in tha t 19 document in this bench opinion, as Petitioner does not 20 specifically claim that any errors have been made in 21 that analysis . 22 In this case, Respondent's appeals officer 23 took into account the various factors set forth in the 24 above-referenced revenue procedure . The appeal s 25 officer considered whether each factor weighed in Heritage Reporting Corporatio n (202) 628-4888 7 1 favor of or against Petitioner's request for relief 2 after accurately applying the facts of Petitioner' s 3 situation to those factors . Concluding that it would 4 not be inequitable to hold Petitioner liable for hi s 5 2005 federal income tax liability, the appeals officer 6 determined that Petitioner is not entitled to relie f 7 under Section 6015(f) . 8 In order to establish that Respondent' s 9 denial of his Section 6015(f) claim for relief is an 10 abuse of discretion, Petitioner must demonstrate that 11 in not granting relief, Respondent exercised hi s 12 discretion arbitrarily, capriciously, or without sound 13 basis in law or fact . Woodral v . Commissioner , 112 14 T .C . 19, 23 (1999) . The evidence in this case would 15 hardly support any such findings . 16 Under the circumstances presented, we are 17 satisfied that Respondent's denial of Petitioner's 18 request for Section 6015(f) relief is not arbitrary, 19 capricious, or without sound basis in law or fact . It 20 follows that Respondent's determination to den y 21 Petitioner's request for Section 6015(f) relief is not 22 an abuse of discretion . 23 To reflect the foregoing, decision will be 24 entered for Respondent . 25 This concludes the Court's oral findings of Heritage Reporting Corporatio n (202) 628-4888 1 fact and opinion in this case . 2 (Whereupon, at 10 :54 a .m ., the bench opinion 3 in the above-entitled case was concluded . ) 8 4 // 5 6 // 7 // 8 9 // 10 // 11 // 12 // 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 2 4 25 // Heritage Reporting Corporation (202) 628-4888