TAX COURT OPINION

Case: Julie A. Swanson
Docket Number: 13498-08
Judge: Colvin
Opinion Type: bench
Filed: 10/16/2009
Pages: 7

UNITED STATES TAX COUR T I WASHINGTON , DC 2021 7 JULIE A . SWANSON, Petitioner , v . ) Docket No . 13498-08 . COMMISSIONER OF INTERNAL REVENUE, . Respondent . O R D E 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 trial in the above case before Judge David Gustafson at St . Paul, Minnesota, on September 17, 2009, containing his oral findings of fact and opinion rendered at the conclusion of the trial . In accordance with the oral findings of fact and opinion, decision will be entered for petitioner . (Signed ) David Gustafson Judge Dated : Washington, D .C . October 16, 2009 SERVED Oct 20 2009 3 1 Benc Opinion by Judge David Gus --2 Julie A . Swanson v . Commissioner Docket No . 13498-0 8 3 THE COURT : The Court has decided to render ora l 4 Findings of Fact and opinion in this case, and the following 5 represents the Court's oral Findings of Fact and Opinion . 6 The oral Findings of Fact and opinion shall not be relied on 7 as precedent in any other case . 8 This Bench Opinion is made pursuant to th e 9 authority granted by section 7459(b) of the Internal Revenue 10 Code of 1986, as amended, and Rule 152 of the Tax Cour t 11 Rules of Practice and Procedure . 12 By a notice of determination dated March 13, 2008 13 (Ex . 5-J), the Internal Revenue Service (IRS) denied th e 14 request of petitioner Julie A . Swanson, pursuant to section 15 6015 of the Internal Revenue Code (26 U .S .C .), for relief 16 from joint liability for returns she filed with her husband 17 for the years 2000, 2001, and 2002 . She timely petitioned 18 this Court for review of that determination on June 3, 2008 . 19 Trial of this case was conducted on September 15, 20 2009, in St . Paul, Minnesota, and Ms . Swanson gave he r 21 testimony . The parties' Stipulation of Facts, with Exhibits 22 1-J through 5-J, was admitted into evidence . Ms . Swanson 23 also offered Exhibits 6-P through 20-P to prove variou s 24 aspects of the merits of her claim . Respondent objected on 25 the grounds of relevance, since he concedes the merits of Heritage Reporting Corporatio n (202) 628-4888 4 1 her claim, but the Court overruled the objection, and Ms . 2 Swanson's exhibits were received into evidence . 3 FINDINGS OF FACT 4 Petitioner Julie Swanson married Emer Barfuss in 5 August 1996 and was divorced from him almost 7 years late r 6 in June 2003 . That is, they were married during each of the 7 years in suit -- 2000, 2001, and 2002 . Mr . Barfuss abuse d 8 Ms . Swanson mentally and, as the years passed, physically as 9 well . On one occasion, in front of their children, h e 10 grabbed her off the chair, dragged her through the house, 11 threw her in a room, and locked her in it . In May 2003 he 12 entered a plea of guilty to a misdemeanor charge of domestic 13 assault . (See Ex . 7-P . ) 14 Mr . Barfuss insisted on being in control of the 15 family and Ms . Swanson . He did not even allow her out of 16 the house to do grocery shopping, doing it himself instead . 17 Mr . Barfuss insisted on paying all the household bill s 18 himself ., He did not involve Ms . Swanson in family finances, 19 but kept all the records in a locked room to which she had 20 no access . 21 In the years 2000 through 2002 Mr . Barfuss wa s 22 self-employed as a roofer ; but unknown to Ms . Swanson he was 23 also involved in illegal drug activity . Ms . Swanson was not 24 involved in Mr . Barfuss's roofing business . 25 For the years 2000, 2001, and 2002, Mr . Barfuss Heritage Reporting Corporation (202) 628-4888 5 1 prepared joint tax returns that he instructed Ms . Swanson to 2 sign . She complied . She did not ask him any question s 3 about the returns, because she feared the consequences o f 4 annoying him . The returns showed tax due, but only a small 5 payment was made with .the 2000 return (see Ex . 1-J), and no 6 payments were made with the returns for 2001 and 2002 (see 7 Exs . 2-J., 3-J) . These liabilities are among the debts that 8 the June 2003 divorce decree (Ex . 6-P) required Mr . Barfuss 9 to pay, but he has not paid them . The IRS commence d 10 collection activity against Ms . Swanson for these unpaid 11 liabilities on March 9, 2005, when it sent to her and Mr . 12 Barfuss°a notice of intent to levy . (Stip . para . 1 .) At 13 some point after the divorce Mr . Barfuss was incarcerated, 14 and he remains so today . 15 Ms . Swanson now lives in Section 8 housing with 16 her four sons (two age 9 and the others ages 11 and 13) . 17 She is employed at Noodles & Co . at a rate of $10 .15 per 18 hour . She receives no child support from her incarcerated 19 husband . 20 On-July 23, 2007, Ms . Swanson submitted to the IRS 21 a request for relief from joint liability for the year s 22 2000, 2001, and 2002, on Form 8857 ("Request for Innocent 23 Spouse Relief") . The IRS denied the request on March 13, 24 2008, and she petitioned this Court on June 3, 2008, at 25 which time she resided in Minnesota . Heritage Reporting Corporation (202) 628-4888 6 1 OPINION 2 In determining whether a petitioner is entitled to 3 equitable relief under sec . 6015(f), we apply a de novo 4 standard of review . Porter v . Commissioner , 132 T .C . 5 (Apr . 23, 2009) . However, in this case the facts are not in 6 dispute ; and, as we will show below, the IRS's error i n 7 denying relief was one of law, which by definition is an 8 abuse of discretion (see, .e .g ., Cooter & Gell v . Hartmar x 9 Corp . , 496 U .S . 384, 405 (1990) (abuse of discretion occurs 10 if ruling was based on erroneous view of law)) . 11 Consequently, the standard of review does not affect the 12 outcome of this case . 13 I . The alleged untimeliness of Ms . Swanson's 14 reques t 15 Ms . Swanson's request for relief was submitted to 16 the IRS July 23, 2007 -- two years and four and a hal f 17 months after the IRS began collection activity against Ms . 18 Swanson by sending a notice of intent to levy to her and Mr . 19 Barfuss on March 9, 2005 . Section 1 .6015-5 of the Income 20 Tax Regulations purports to limit the time for requesting 21 relief under section 6015(f) to 2 years from the firs t 22 collection activity against the requesting spouse . 23 Respondent asks the Court to deny relief to Ms . Swanson 24 solely on the basis that her administrative request for 25 relief was filed four and a half months later than the Heritage Reporting Corporation ' (202) 628-4888 7 1 regulation would require . Respondent does not argue tha t 2 Ms . Swanson's behavior in submitting her claim was dilatory 3 but just that she filed it later than two years afte r 4 collection activity had begun . 5 This Court has recently held that Section 1 .6015-5 6 of the regulations is invalid insofar as it imposes a n 7 unqualified two-year rule for requests under sectio n 8 6015(f), see Lantz v . Commissioner , 132 T .C . (Apr . 7, 9 2009) . However, in this case the IRS continues to defend 10 its regulation, and it suggests no standard -- other than a 11 bright-line 2-year rule -- by which we could evaluate th e 12 timeliness of Ms . Swanson's request . Rather, to support its 13 rejection of Ms . Swanson' .s request, the IRS relie s 14 exclusively on the agency's unbending two-year rule that we 15 have held invalid . Consequently, we must reject it s 16 argument, and we hold that Ms . Swanson's claim must be 17 considered on its merits . 18 II . The merits of Ms . Swanson's reques t 19 Respondent concedes that, apart from its alleged 20 untimeliness, Ms . Swanson's request has merit and should 21 have been allowed . 22 In view of respondent's concession of the merits, 23 decision will be entered in favor of petitioner . 24 This concludes the Court's oral Findings of Fact 25 and Opinion in this case . Heritage Reporting Corporation (202) 628-4888 1 (Whereupon, at 9 :18 a .m the bench opinion in the 2 above-entitled matter was concluded .) 8 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Heritage Reporting Corporation (202) 628-4888