TAX COURT OPINION

Case: Ondria Brown
Docket Number: 910-09S
Judge: Colvin
Opinion Type: bench
Filed: 05/12/2010
Pages: 9

UNITED STATES TAX COURT WASHINGTON , D .C . 2021 7 ONDRIA BROWN, Petitioner , V . Docket No . 910-09 S 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 of the above case before Special Trial Judge Lewis .R . Carluzzo at Miami, Florida, on April 23, 2010, 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 . May 12, 2010 (SERVED MAY 13 2010 3 1 Bench Opinion by Special Trial Judge Lewis R . Carluzzo 2 Ondria Brown v . Commissioner Docket No . 910-09S 3 April 23, 201 0 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 a Small 16 Tax Case conducted pursuant to the provisions of 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 Ondria Brown appeared pro se . D'Aun Clark 21 appeared on behalf of respondent . 22 In a notice of determination, dated 23 October 15, 2008, respondent denied petitioner's claim 24 for section 6015 relief from her unpaid 1999 Federal 25 income tax liability . Our jurisdiction in this case Heritage Reporting Corporatio n (202) 628-4888 14 4 1 is established by 6015(e) and we consider, de novo, 2 petitioner's entitlement to the relief under section 3 6015(f) . Porter v . Commissioner , 132 T .C . (2009) . 4 The relevant facts, many of which have been 5 stipulated and are so found, are for the most part not 6 in dispute and easily summarized . 7 Petitioner is and was at all times relevant, 8 including at the time she made her request for section 9 6015(f) relief, married to Edward Brown . The story 10 here really begins with him . 11 Mr . Brown was employed during 1999 and his 12 income for that year obligated him to file a Federal 13 income tax return, which under usual circumstances 14 would have been due not later than April 17, 2000 . 15 See secs . 6012, 6072, and 7503 . However, as o f 16 July 26, 2004, he had not done so . On that date, 17 having received information relating to his income, 18 respondent issued to him a notice of deficiency for 19 1999 in which a $62,200 deficiency was determined and 20 related additions to tax imposed . The deficiency is 21 computed by treating him as a married individual 22 filing a separate return and takes into account only 23 one exemption deduction and the standard deduction . 24 Taking into account a credit for $38,325 of income tax 25 withholdings, the notice shows his outstanding 1999 Heritage Reporting Corporatio n (202) 628-4888 5 1 tax liability to be $23,875, plus interest and the 2 above-mentioned additions to tax . Mr . Brown did not 3 petition this Court in response to that notice o f 4 deficiency, and the deficiency, additions to tax, and 5 interest were assessed against him in due course . 6 Petitioner was not employed during 1999 and 7 otherwise had no obligation to file a 1999 Federa l 8 income tax return . 9 Because neither petitioner nor Mr . Brown had 10 filed a 1999 separate Federal income tax return before 11 he was issued the notice of deficiency for that year, 12 respondent allowed them to file a 1999 joint return, 13 which return was received by respondent in May 2006 . 14 That return, in effect caused the income tax liability 15 previously assessed against Mr . Brown to be reduced by 16 slightly more than $8,000, without taking into account 17 corresponding reductions in the applicable interes t 18 and additions to tax . Allowing for the above- 19 referenced withholding credits, the 1999 joint return 20 shows a balance due of $15,613, which amount does not 21 take into account interest and additions to tax . 22 The 1999 joint return is signed b y 23 petitioner and Mr . Brown . Petitioner either did not 24 review the return at all, or she did not review it 25 carefully . 'She signed it because her husband, an Heritage Reporting Corporatio n (202) 628-4888 6 1 accountant, requested that she do so . It has and had 2 been their practice during their marriage to fil e 3 joint Federal income tax returns for years other than 4 1999 . 5 In general, married taxpayers may elect to 6 file a joint Federal income tax return, see sectio n 7 6013(a), and this election was available to petitioner 8 and Mr . Brown even though he had previously received a 9 notice of deficiency . After making the election, eac h 10 spouse is jointly and severally liable for the entire 11 amount of tax reported on the return, even if all of 12 the income giving rise to the tax liability i s 13 allocable to only one of them . Sec . 6013(d)(3) ; 14 Cheshire v . Commissioner , 115 T .C . 183, 188 (2000), 15 affd . 282 F .3d 326 (5th Cir . 2002) ; Butler v . 16 Commissioner , 114 T .C . 276, 282 (2000 ) ; see sec . 17 1 .6013-4(b), Income Tax Regs . 18 The decision to file a 1999 joint Federal 19 income tax return resulted both in a benefit and a 20 burden to petitioner . The burden, of course, is that 21 she, in effect, assumed liability for a tax no t 22 attributable to her except for the filing of the 1999 23 joint return . The benefit was that the tax liability 24 previously assessed against Mr . Brown, her then and (cid:127)25 current husband, a family member and a member of he r Heritage Reporting Corporation (202) 628-4888 7 1 household, was substantially reduced . No doubt that 2 this anticipated tax savings was discussed betwee n 3 them before the return was filed . 4 In certain situations and subject to a 5 variety of conditions, section 6015(f) provides for 6 relief from the joint and several liability tha t 7 arises from a joint return . If, as in this case, a 8 taxpayer does not qualify for relief under subsection 9 (b) or subsection (c) of section 6015 because th e 10 underlying liability results from unpaid tax reported 11 on a Federal income tax return, then taking int o 12 account various relevant factors, some included in 13 procedures prescribed in Rev . Proc . 2003-61, 2003-2 14 C .B . 296, a taxpayer may be relieved from joint and 15 several liability for a particular year if, "taking 16 into account all the facts and circumstances, it is 17 inequitable to hold the individual liable for any 18 unpaid tax or any deficiency (or any portion o f 19 either)" for that year . Sec . 6015(f) . Some of those 20 factors are discussed in the Schedule of Adjustments 21 introduced into evidence in this case and will not be 22 repeated here . 23 One factor typically taken into .account is a 24 taxpayer's ability to pay the tax and consideration is 25 given to the hardship endured by the taxpayer i f Heritage Reporting Corporation (202) 628-4888 8 1 required to do so . At trial petitioner pointed out 2 that the financial information relied upon b y 3 respondent in denying relief improperly includes Mr . 4 Brown's income as well as her own . She explained that 5 her income is and was during the relevant period, much 6 less than shown on the schedule respondent relie d 7 upon . We accept her testimony on the points . 8 Measured against other "facts and circumstances, " 9 however, we find that her financial situation, even as 10 now claimed by her, carries little weight in deciding 11 whether it would be inequitable to hold petitione r 12 liable for the unpaid tax reported on the 1999 joint 13 return . 14 Instead, we look at the overall situation 15 and find any financial hardship suggested by he r 16 testimony is mitigated by the fact that her marriage 17 to Mr . Brown is and has . remained at all times relevant 18 intact . 19 Another factor typically taken into account 20 is whether the taxpayer knew or had reason to know of 21 the underpayment of tax . Petitioner takes th e 22 position that she did not know, or have reason to know 23 that there was an outstanding tax liability shown on 24 the return, and that she had no reason to believe that 25 any such liability would not be paid . We disagre e Heritage Reporting Corporation (202) 628-4888 9 1 with her on these points . It is clear that a simple 2 review of the return would have shown the liability . 3 If she elected to sign the return, without firs t 4 reviewing it, or without carefully reviewing it , 5 section 6015 provides little opportunity to her fo r 6 relief . See, e .g . Morello v . Commissioner , T .C . Memo . 7 2004-181 . 8 Decisions have consequences . This is particularly true in matters of Federal incom e 10 taxation . We find it more than a little inconsistent 11 for petitioner, on the one hand to accept the benefits 12 to her family that resulted from her decision to file 13 a 1999 joint return with Mr . Brown, while on the other 14 hand argue that she should be relieved from the burden 15 imposed upon her for so doing . 16 All things considered, we find that 17 petitioner is not entitled to section 6015(f) relief 18 from the joint and several liability resulting from 19 the filing of the 1999 joint Federal income tax 20 return . 21 To reflect the foregoing, decision will be 22 entered for respondent . 23 This concludes the Court's oral findings of 24 fact and opinion in this case . 25 Heritage Reporting Corporation (202) 628-4888 1 (Whereupon , at 9 :39 a .m ., the bench opinion 2 in the above - entitled matter was concluded . ) 1 0 3 4 5 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