TAX COURT OPINION

Case: David Douglas Kennedy, Petitioner, and Melanie Warner, Intervenor
Docket Number: 14254-13
Judge: Holmes
Opinion Type: bench
Filed: 04/01/2016
Pages: 23

UNITED STATES TAX COURT WASHINGTON, DC 20217 SEC MELANIE WARNER, et al., Petiticners, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. . ) ) ) ) ) Docket Nos. ) ) ) 13655-13, 14254-13. ORDER 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, intervenor and to respondent a copy of the pages of the transcript of the trial of the above case before Judge Mark V. Holmes at San Francisco, California on February 26, 2016 containing his oral findings of fact and opinion rendered after the conclusion of trial. The Court will enter decisions under Rule 155. (Signed) Mark V. Holmes Judge Dated: Washington, D.C April 1, 2016 SERVED Apr 07 2016 Capital Reporting Company 3 1 2 Bench Opinion by Judge Mark V. Holmes February 26, 2016 3 Melanie Warner, et al., v. Commissioner 4 5 6 7 8 Docket No. 13655-13, 14254-13 THE COURT: In the cases of Melanie Warner v. Commissioner, Docket No. 13655-13, and David Douglas Kennedy, Petitioner, and Melanie Warner, Intervenor v. Commissioner, Docket No. 14254-13, the 9 Court has decided to render oral findings of fact and 10 11 12 13 14 15 16 opinion, and the following represents the Court's oral findings of fact and opinion. This bench opinion is made pursuant to the authority granted by section 7459 (b) of the Internal Revenue Code of 1986, as amended, and Rule 152 of the Tax Court's Rules of Practice & Procedure. The case was tried in San Francisco, 17 California, on October 19th, 2015; it was continued 18 19 20 21 22 23 24 to alloa a final witness to testify on February 22nd, 2016. The transcript and stipulated evidence, together with a few extra exhibits, are the record in the casa. In the lower-numbered case, 13655-13, parties settled all the issues, but the case was connectad, is connected, to Case No. 14254-13, 25 Mr. Ken edy's request for innocent spouse relief 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 4 1 2 3 under sections 66 and 6015 of the Code. Ms. Warner is the Intervenor in this case and opposed relief. Both Mr. Kennedy and Ms. Warner were 4 California residents when they filed their petition, 5 6 7 8 9 as they remain today. Mr. Kennedy met his now ex-wife in the early 1990s. At that time he was a production freelancer for various production companies in Los Angeles, and she was a temporary worker for Disney 10 Studios. In 2001, after his father was diagnosed 11 with a erminal disease, Mr. Kennedy moved back to 12 13 14 15 16 17 18 19 20 21 22 23 24 25 his home town, Fresno, California. This is probably when his marital problems began, because he testified that thlis same year he began planning to leave Ms. Warner. In 2003 or 2004, Kennedy started Liquid Films, reported for the years in question on a Schedula C, using the same skills and doing the same work he did as a freelancer. He operated that business throughout the years at issue here, 2005 through 2009. Liquid Films hired independent contractors as were necessary to complete a job, and around that same time, 2002 to 2004, Mr. Kennedy and Ms. Warner started a magazine called Fresno Home & Lifestyle. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 5 1 Only Warner owned Cactus Media, which was the owner 2 3 4 5 6 7 8 9 10 11 12 13 of the magazine. But the magazine, I find, was formed by both Kennedy and Warner as their family business. It was put in her name, I find, because Kennedy had poor credit at the time. By 2004 when the Fresno magazine was being published on a monthly basis, a large part of the revenue came from advertising, because at that time Fresno Home & Lifestyle was the only monthly lifestyle magazine in the area. Much of this advertising revenue took the form of bartering, however. The magazine was very successful at first, and by 2005, 2006, it was printing 25,000 copies a 14 month with 500 paying subscribers. 15 16 This enabled Ms. Warner and Mr. Kennedy to employ 15 people including a full-time bookkeeper. 17 Mr. Kennedy was paid through the magazine's payroll 18 19 20 21 22 23 24 25 and received the same benefits as other employees. He served as creative director, was on the masthead of the nagazine, oversaw its art department, and did photography and commercials for the magazine. He spent about 40 percent of his time there, nad his equipment at the magazine. His headquarters of Liquid Film was at the magazine's headquarters and he and Ms. Warner seemed to be true 866.488.DEPO www.Capital]ReportingCompany.com Capital Reporting Company 6 1 2 3 4 5 partners, though there was no formal partnership agreement. I found credible the testimony of Ms. Mora, the magazine's bookkeeper and accountant, who said that money was flowing back and forth between 6 Mr. Kennedy and Ms. Warner. Ms. Warner was largely 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 in charge of the magazine, Mr. Kennedy was largely in charge of Liquid Films, but they were both on signature cards for some shared bank accounts and did not keep their accounts entirely separate. Mr. Kennedy in par.ticular seemed deeply involved in the day-to-day affairs of the magazine and he knew very early on about the tax troubles that ultimately sank the magazine. Moreover, the magazine had staff meetings about once a week; some were general sales and others were about money. Mr. Kennedy, at least occasionally, attended these meetings where the bookkeeper was talking about the financial travails that were looming. From 2005 to 2008, Mr. Kennedy and Ms. Warner filed their tax returns jointly. These tax retµrns were filled with overstated deductions and claimed deductions for nondeductible personal items. They also understated gross receipts and 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 failed to report most of the barter income that the 2 Warner-Kennedys were receiving through advertisers in 3 4 5 6 7 the magazine. More importantly, Cactus Media was failing to pay large amounts of employment taxes, which is always a disaster for a small business. In 2009, the last of the tax years at issue here, they stopped 8 married filing jointly, Mr. Kennedy didn't file at 9 all, and the couple were divorced in 2010. 10 11 12 Mr. Kennedy is currently engaged to another woman, and he receives at least some financial support from her. In the past she has paid bills for 13 Mr. Kennedy, including a $25,000 child support 14 15 16 17 18 19 20 payment and. his attorney's fees in the divorce proceeding, which was quite contentious. The amount of deficiencies at stake here, together with additions to tax under sections 6651(a)(1) and -(a)(2), as well as, in 2009, section 6654, add up to well more than $1 million. As I said before, Ms. Warner settled all the issues in her case 21 with the Commissioner, leaving the only issues for 22 decision whether Mr. Kennedy is eligible for innocent 23. spouse relief for the 2005 to 2008 tax years, and 24 25 whether he is eligible for relief from the operation of commanity property law under section 66(c) for the 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 2009 tax year in which he did not file a return. He also does not challenge the underlying deficiencies in the case. The parties settled some of those deficiencies as part of the stipulation process. Let me turn to the usual innocent spouse law that applies in these kinds of cases and these cases in particular. In general, a spouse who files a joint federal income tax return is jointly and severally liable for the income tax liability. See section 6013(d) (3). Sections 6015(b) and -(f) grant innocent spouse relief from joint liability to qualifying spouses. So does section 6015(c), but there's no suggestion anywhere in the record that Mr. Kennedy seeks relief under this section. He said in his application and in his pleading in this Court that it would be unfair for him to have joint liability with Ms. Warner. This is a concept for 6015(b) and -(f), not -(c). We regard any claim under 6015(c), therefore, as waived. Under section 6015(b), a requesting spouse 23 must meat the following conditions. One, file a 24 25 joint tax return for the year in question. Two, there must be an understatement of tax 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 9 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 attributable to erroneous items of the nonrequesting spouse. Three, the requesting spouse must not know and have no reason to know of the understatement at the time he signed the return. Four, taking into account all the facts and circumstances, it must be inequitable to hold him liable for the deficiency attributable to the understatement. And five, his request for relief must be made within two years from the date of the first collection activity with respect to the requesting spouse. See section 6015(b). There is no dispute that Kennedy and Warner filed j intly for the tax years 2005 to 2008. I'll focus, however, on factor number three: Whether Kennedy knew or had reason to know of the understatements at the time those returns were filed. Under Treasury regulations, section -- 26 CFR section 1.6015-2(c.), whether a taxpayer has reason o know of an understatement can be inferred by his ailure to inquire at or before the time the return as signed about items on a return that a reasonaale person would have questioned. I've already found that Mr. Kennedy spent a great deal of 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 10 time in olved in Ms. Warner's business, really both their b siness, and even attended meetings with the niagazin ' s bookkeeper. He looked over the returns for eac year with an accountant on his own side. At one point during trial, Mr. Kennedy claimed that he had no reason to suspect that anythin was wrong with the 2005-to-2008 returns, but he was 1ready aware by 2005 that the magazine had issues ith the IRS, especially with regard to employm nt taxes. When Mr. Kennedy claims that Ms. War er told him it was being taken care of, he also kn w that Ms. Warner had barter income to report and tha the returns should have been altered. In fact, Mr. Kennedy even began reporting his own business as a Schedule C in 2006 to, he thought, distance it from Ms. Warner's corporation. It has been held in many cases that if a taxpaye at least suspects something is awry with the tax ret rns, as Mr. Kennedy' s decision to distance his bus ness from the magazine suggests he knew, then he has eason to know of the understatement. See, for exa ple, Wicksell v. Commissioner, 90 F.3d 1459, 1463 (9 h Cir. 1996), affg. 1994 WL 71252 (Tax Court 1994) . Therefore, we find that Mr. Kennedy had 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.Capita1ReportingCompany.com Capital Reporting Company 11 1 2 3 4 5 6 7 8 9 10 11 12 13 actual knowledge of at least one of the items leading to the understatement and reason to know of the numerous existing issues with the IRS. This is enough to trigger a duty on his part to inquire. See Motsko v. Commissioner, TC Memo 2006-17 (taxpayer has reason to know of an understatement where spouse was under audit for previous tax years); see also Feldman .v. Commissioner, TC Memo 2003-201, affd. 152 Fed. Appx. 622(9th Cir. 2005)(knowledge of an ex-spouse's deteriorating mental condition should have caused the taxpayer to inquire into whether his ex-spouse had paid their taxes). Because of these facts, we find that 14 Mr. Kennedy knew or at least had very good reason to 15 16 17 18 19 20 21 22 23 24 25 know of an understatement on the 2005-to-2008 returns. This allows me to stop. Mr. Kennedy does not qualify for innocent spouse relief under section 6015(b). That leaves section 6015(f). A spouse may be relieved from joint and several liability under section 6015(f) if, taking into account all the facts and circumstances, it would be inequitable to hold him liaale for any unpaid tax. We look to Revenue Procedure 2013-34 which lists the factors to consider in deciding whether to 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 12 1 2 3 4 grant relief under section 6015(f). The inquiry is divided into three .parts, a threshold part all of the conditions of which must be met to go forward; streamlined part, if any of those conditions are 5 missing, streamlined relief is not available; and 6 7 8 9 10 11 12 13 14 15 then a multi-factor balancing test. Let's look first at the threshold conditions listed in section 4.01 of Revenue Procedure 2013-34. Was there a joint return for each of the years in issue. This is not disputed; there was, at least for 2005 to 2008. Is relief available under section 6015(b) or -(c). This is easy. We've denied relief under section 6015(b), and treat any relief under section 6015(c) as waived and thus unavailable for 16 Mr. Kennedy as well. 17 18 19 20 21 22 23 24 25 Third, the claim for relief must be timely filed. The Commissioner concedes that it was. Fourth, no assets were transferred between the spouses as part of a fraudulent scheme. The Commissioner concedes this as well. Fifth, the nonrequesting spouse, that would be Ms. Narner, did not transfer disqualified assets to the requesting spouse. The Commissioner concedes this as well. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 13 1 2 3 4 5 6 7 8 9 The requesting spouse did not knowingly participate in the filing of a fraudulent joint return. Commissioner concedes this. And finally, the income tax iability from which the requesting spouse seeks relief, is attributable either in full or in part to an item of the nonrequesting spouse. Commissioner concedes that this, too, is met in this case. Therefore, the threshold requirements are 10 met, and we can go forward to the streamlined relief 11 12 13 14 15 16 17 18 provisions, which are laid out in section 4.02 of the revenue procedure. For streamlined relief to be available, the requesting spouse must no longer be married to the nonrequesting spouse. That's true. Mr. Kennedy and his wifa separated in 2009 and divorced in 2010. The requesting spouse must also suffer an economic hardship if relief were not granted. 19 Whether a requesting spouse suffers an economic 20 21 22 23 24 25 hardshia is based on rules similar to those found in 26 CFR section 301.6343-1(b) (4). You take into consideration the requesting spouse's income and expenses as well as any of his assets. We also take into consideration whether the requesting spouse shares expenses or has expenses 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 14 1 2 3 4 paid by another individual. In deciding whether the requesting spouse would suffer an economic hardship were we not to grant relief, we compare his income to the federal poverty guidelines, and particularly 5 whether his income exceeds 250 percent of those 6 7 8 9 10 11 12 guidelines for somebody in his position. There are problems with Mr. Kennedy's request in that regard. Mr. Kennedy is currently engaged to be married to another woman. They live together in a house owned by her mother. Mr. Kennedy doesn't pay any rent to live there. In his request for innocent spouse relief, 13 Mr. Kennedy did not include the household's income 14 15 16 17 but only his own. He also did not include his fiancee's income from her marketing firm, the income she receives from a trust, or the value of that trust. He assumes that the trust has more than a 18 million dollars in it, however. 19 20 21 22 23 Mr. Kennedy's testimony concerning his income and expenses also does not match the numbers he put on his request for innocent spouse relief. I'll give just a couple of examples. In his request for innocent spouse relief, 24 Mr. Kennedy claimed over. a thousand dollars in 25 accountant's fees, but during trial we figured out 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 15 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 that those were actually business expenses, not household expenses. He also claimed that he additionally pays 1500 or $2000 to a CPA to file his return. On his request, he listed his child care expenses at $500 a month and his child support at $1404 a month. But during trial his child care expenses, he said, were the same. And he said that his support payments were only 600 to $620 a month. In his request he claimed his income from the business that he continues to operate was about $2700 a month, but during trial inflated that to 3500 to $4000 each month. Moreover, he submitted no substantiation for any of his expenses. Because of the contradictions between his request for innocent spouse relief and his testimony, and the absence of any substantiation for his expenses, as we've just noted, this lack of substantiation greatly undermines his credibility. Even if we take his income at his word, tTat income is about 250 percent greater than the federal guidelines and does not even include his fiancee's income which she contributes to the expense of their joint household. Mr. Kennedy does claim that his expenses 866.488.DEPO www.Capita1ReportingCompany.com Capital Reporting Company 16 1 2 3 4 5 6 7 exceed his income by at least $300 which would constitute economic hardship. But we don't find his account of his expenses credible and we also take into account the fact that Mr. Kennedy is able to receive help and has received help in the past from his fiancée. Though the two do not share bank accounts, Mr. Kennedy is frequently able to borrow 8 money from his fiancée, and as I've said and find, 9 she does pay some of his expenses for him. 10 11 12 13 14 We therefore conclude that Mr. Kennedy would not suffer economic hardship if relief is denied. granted (aic). Moreover, as a condition for (K { streamlined relief, a requesting spouse must not have knowledge or reason to know of an understatement, but 15 we've already found that Mr. Kennedy has reason to 16 17 18 19 20 21 22 23 24 25 know of the understatement for each of the years in this case. So no streamlined relief for Mr. Kennedy. That brings us to the multi-factor balancing tests to determine whether to grant equitable relief. Those factors are listed in section 4.03 of Revenue Procedure 2013-34. I'll address them one by one. First, Mr. Kennedy's marital status. He is no longer married to Ms. Warner. This factor weighs 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 17 1 2 in favor of relief. Second, whether the requesting spouse, 3 Mr. Kennedy, will suffer an economic hardship. I've 4 5 6 7 8 9 already determined that Mr. Kennedy will not suffer an economic hardship if denied relief. This factor is neutral. Third, the next factor considers whether the requesting spouse knew or had reason to know of an understatement. We've already established that 10 Mr. Kennedy had reason to know of the understatements 11 12 13 14 15 16 17 in question, and so this factor weighs against relief. There is an exception to this for claims of abuse. Mr. Kennedy doesn't actually claim he was abused ay Ms. Warner and stated to the Commissioner that he was not a victim of abuse. There was some discussion of this factor during trial; however, 18 Mr. Kennedy claimed that on one occasion his wife 19 20 21 22 23 24 25 attacking him with wooden hangers. But the isolated incident was in 2009 after the tax years at issue. We also note that Mr. Kennedy was actually confined for a few days for hitting his wife sufficiently severelf that police got involved. Even so, we don't believe that this isolatedi incident had any bearing on Mr. Kennedy's 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 18 1 ability to reason independently and follow the tax 2 3 4 5 6 7 8 9 10 11 laws. See section 4.03(2)(c)(iv) of Revenue Procedure 2013-34. Fourth, both spouses here have a legal obligation to pay the liability under their marital settlement agreement. This factor is neutral. Fifth, we consider whether Mr. Kennedy significantly benefited from the understatement. He admitted during trial that he did benefit from the barter income received by the magazine that was a substantial source of the understatement of the 12 Warner-Kennedy taxes. 13 14 For example, his children received braces as a result of the barter. Mr. Kennedy and Ms. 15 Warner received housekeeping services as a result of 16 17 18 19 barter, and they used a variety of gift cards and certificates as well. Mr. Kennedy enjoyed the use of a BMW during the years at issue. He enjoyed several vacations 20 with his family during those years. They went to 21 22 23 24 25 Italy, France, Switzerland, Buenos Aires. They also went to Disneyland a handful of times. And it appears that many of the personal expenses erroneously claimed as business deductions were greatly enjoyed by Mr. Kennedy. These included 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 19 1 2 deductions for personal expenses, including his BMW, groceries, movie tickets, video rentals, personal 3 meals and alcohol, book purchases, and personal 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 credit card bills. Clearly, Mr. Kennedy significantly benefited from the understatement, so this factor weighs strongly against relief. Sixth, we look at whether Mr. Kennedy has been in compliance with the tax laws in the year following his divorce. He did not file his 2009 return and he filed his 2010 and 2011 returns late. This factor weighs against relief. And finally, we consider any mental or physical health issues. On his request for innocent spouse relief, Mr. Kennedy stated that he did not suffer any such issues presently or during the years at issue. This factor is neutral. So that's one factor in favor of relief, namely, that they are divorced; three factors neutral and three factors weighing against relief. As in any multi-factor balancing test, we 22 must have something in mind as the appropriate 23 24 25 fulcrum when there are factors weighing down both sides of the lever. And here I think the appropriate fulcrum is the extent to which the economic unity of 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 20 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 the household filing a joint return has been broken down by the actions of the nonrequesting spouse in a way that did not allow the requesting spouse a reasonable exit. Here, however, Mr. Kennedy was all in with Ms. Warner on the business of the family's magazine in 2005 through 2008. He was all in financially if not emotionally perhaps with his wife, enjoying with her the benefits of their work together. I therefore find that no relief should be given him under 6015(f). That leaves only one year, 2009, for which the couple did not file a joint return. Mr. Kennedy therefore seeks relief from attribution of liability based on the community property laws of California under section 66(c). He argues that for the 2009 tax year, since California is a community property state and married couples who don't file joint tax returns generally must report half of the total community income aarned by them during the taxable year, that he is eatitled to relief under subsection (c) of section 66. This Court has jurisdiction to hear claims in defiriency cases, like this one, .as an affirmative defense to the deficiency. Bernal v. Commissioner, 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 120 TC 102, 107-8 .(2003). Section 66(c) offers two avenues toward relief. He can get traditional relief by meeting all the requirements listed in the Code, or equitable relief, the test for which is virtually the same as under section 6015(f). Taking them in order, I look first to traditional relief. There are four requirements for this, but one of them is the requirement that the requesting individual not know or have reason to know of the community income. Mr. Kennedy stated during trial that he knew Warner was operating a magazine in 2009; he claims he didn't know anything about whether the magazine was making money, but again, I don't find hin credible. Mr. Kennedy knew that Ms. Warner was operating the business and had at least some reason to suspect that she was profiting from it. This 19 makes it similar to the situation in Hardy v. 20 21 22 23 24 25 Commissioner, 181 F.3d 1002, 1007-1008 (9th Cir. 1999). Mr. Kennedy therefore does not qualify for traditional relief under section 66(c). That leaves equitable relief under section 66. The factors for equitable relief are listed in 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 22 1 2 3 4 5 6 7 8 9 10 11 12 conjunction with the factors for relief under section 6015(f) and Revenue Procedure 2013-34, section 4. They're almost identical, but I'll briefly walk through them again. The.threshold condition under section 4.01 are the same as those for section 6015(f) except that the recuesting spouse need not have filed a joint return, which Kennedy did not in 2009, and relief does nct have to be unavailable under sections 6015(b) and -(c), an irrelevant condition under the circumstances of this case. The Commissioner already conceded that 13 Mr. Kennedy meets the rest of these threshold 14 15 16 17 18 19 conditions, so he passes through the threshold and on to the streamlined relief provisions. Those provisions are also under section 4.02 of the revenue procedure and are exactly the same as before. Because we have found that Mr. Kennedy 20 would not suffer an economic hardship if not granted 21 22 23 24 25 relief, and.again, we have determined that Mr. Kennedy had reason to know Ms. Warner's income in 2009, he does not get streamlined relief. This leads us right back to the multi- factor test of section 6015(f) except that now it's 866.488.DEPO www.Capital:ReportingCompany.com Capital Reporting Company 23 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 under ection 66(c). These are listed again in the same s ction of the revenue procedure, 4.03(2). First, Kennedy's marital status, again, weighs in favor of relief. They are divorced and were at the time of his request for innocent spouse relief. Second, economic hardship. We've already determined that Mr. Kennedy will not suffer an economic hardship if denied relief. This factor is neutral. Third, knowledge or reason to know. We've concluded that Mr. Kennedy had reason to know that Ms. Warner had income in 2009. This factor weighs against relief. Legal obligation, that Mr. Kennedy and Ms. Warner are equally liable for tax liabilities under their marital separation agreement. This factor remains neutral. Five, significant benefit. I do think this is a little bit different. Mr. Kennedy separated from his wife in 2009, and I don't believe he received a significant benefit from any understatement or portion of her income in that year. This means that factor is now neutral. Sixth, compliance with income tax laws. 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 Mr. Kennedy, as I said, did not file for 2009, was 24 late fcr 2010 and 2011. This factor weighs against relief. Seven, mental or physical health. This hasn' t changed and remains neutral. Again, this is one factor in favor of relief: Four neutral now, and two against relief. For the same reasons that I found against him for 2005 to 2008, I find against him for 2009. A decision will be entered for Respondent in this case. The underlying deficiencies will have to be computed under 155. But there will be no relief for Mr. Kennedy under sections 6015 or 66(c). This concludes the Court' s oral findings of fact and opinion in this case. (Whereupon, at 1:35 p.m., the above- entitled matter was concluded.) 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