t c memo united_states tax_court della h knorr petitioner and duane j knorr intervenor v commissioner of internal revenue respondent docket no filed date michael r n mcdonnell for petitioner duane j knorr pro_se lorianne d masano for respondent memorandum findings_of_fact and opinion cohen judge this proceeding was commenced under sec_6015 for review of respondent’s determination that petitioner is not entitled to relief from joint_and_several_liability for and with respect to joint income_tax returns that she filed with her former husband the issue for decision is whether respondent abused respondent’s discretion in denying petitioner’s request for relief from joint_and_several_liability under sec_6015 for those years unless otherwise indicated all section references are to the internal_revenue_code in effect for the years in issue all amounts have been rounded to the nearest dollar findings_of_fact some of the facts have been stipulated and the stipulated facts are incorporated in our findings by this reference at the time that the petition in this case was filed petitioner resided in naples florida background petitioner married duane j knorr intervenor on date they had three children during the course of their marriage throughout their marriage petitioner was a homemaker and intervenor owned and operated a commercial painting and wall- covering installation business intervenor organized his business as a florida corporation in date under the name universal painters vinyl hangers inc universal painters universal painters was operated as an s_corporation during the years in issue petitioner did not participate in the business activities of universal painters but she was aware of the significant growth in the business’s size and profitability during the course of her marriage to intervenor as a result of universal painters’s growth in profitability petitioner and intervenor experienced a better lifestyle in particular they were able to purchase three houses in naples florida purchase a condominium at the courtyard at kings lake kings lake condominium a property development located in collier county florida invest in stocks and founders funds inc founders funds mutual funds take regular vacations to colorado the florida keys and the bahamas maintain dollar_figure to dollar_figure cash in a safe located in their home pay a housekeeper dollar_figure per day and lease a lincoln navigator petitioner and intervenor jointly owned all three houses the kings lake condominium and the founders funds investments petitioner’s and intervenor’s houses were located in three naples subdivisions golden gate estates golden gate residence forest lakes homes and the crossings stonegate stonegate residence petitioner and intervenor rented the golden gate residence to petitioner’s brother during the years in issue petitioner and intervenor purchased the stonegate residence on date for dollar_figure petitioner and intervenor used their own funds for this purchase and did not incur a mortgage during the early years of their marriage petitioner relied on intervenor to prepare and to file their joint income_tax returns intervenor did not file their joint income_tax returns for through at the times that these returns were due sometime after learning of intervenor’s failure_to_file their returns petitioner confronted intervenor and convinced him to seek the help of a public accountant with respect to their tax matters petitioner and intervenor eventually filed their joint income_tax returns for through with the internal_revenue_service irs on date they did not however file a joint income_tax return for and they did not pay their income_tax_liability for in full until sometime after date despite intervenor’s previous failure_to_file their joint income_tax returns and to pay their income_tax liabilities in full petitioner continued to rely on intervenor to handle the preparation and filing of their joint income_tax returns during the years in issue petitioner’s and intervenor’s joint income_tax returns for through petitioner and intervenor did not file their joint income_tax returns for through at the times that these returns were due petitioner did not question intervenor about their failure_to_file income_tax returns for these years until it was brought to her attention by intervenor petitioner and intervenor eventually filed their joint income_tax returns for through in the latter part of petitioner was neither forced nor coerced to sign these returns on their joint income_tax return for return petitioner and intervenor reported the following sources of income and loss source amount of income loss taxable interest dividends net_long-term_capital_loss other losses universal painters atrium homes development dollar_figure big_number big_number big_number big_number petitioner and intervenor received the dividends that they reported on the return from founder funds petitioner and intervenor reported taxable_income of dollar_figure total_tax of dollar_figure and an estimated_tax penalty of dollar_figure for petitioner and intervenor signed the return on date the irs received the return on date alex p martinez c p a martinez prepared the return on their joint income_tax return for return petitioner and intervenor reported the following sources of income and loss source amount of income loss taxable interest long-term_capital_loss carryover universal painters atrium homes development dollar_figure big_number big_number big_number petitioner and intervenor reported taxable_income of dollar_figure total_tax of dollar_figure and an estimated_tax penalty of dollar_figure for petitioner and intervenor signed the return on date the irs received the return on date martinez prepared the return on their joint income_tax return for return petitioner and intervenor reported the following sources of income and loss source amount of income loss taxable interest dividends net_short-term_capital_gain long-term_capital_loss carryover other losses universal painters atrium homes development dollar_figure big_number big_number big_number big_number big_number big_number petitioner and intervenor received the dividends that they reported on the return from the following sources founders money market and bedford money market petitioner and intervenor reported taxable_income of dollar_figure and total_tax of dollar_figure for petitioner and intervenor signed the return on date the irs received the return on date martinez prepared the return on their joint income_tax return for return petitioner and intervenor reported the following sources of income and loss source amount of income loss taxable interest dividends net_short-term_capital_gain net_long-term_capital_loss universal painters dollar_figure big_number big_number big_number big_number petitioner and intervenor received the dividends that they reported on the return from the following sources founders money market oakmark int’l fund and oakmark fund petitioner and intervenor reported taxable_income of dollar_figure and total_tax of dollar_figure for petitioner and intervenor signed the return on date the irs received the return on date martinez prepared the return on their joint income_tax return for return petitioner and intervenor reported the following sources of income and loss source amount of income loss taxable interest dividends net_short-term_capital_gain net_long-term_capital_loss rental income universal painters dollar_figure big_number big_number big_number big_number big_number petitioner and intervenor received the dividends that they reported on the return from the following sources founders funds founders growth funds european stock funds int’l stock fund japan fund new asia fund summit cash reserve oakmark int’l fund oakmark fund oakmark ila gov’t and fsp--pacific basin petitioner and intervenor received the rental income that they reported on the return from two residential properties sunny trail heights and golden gates petitioner and intervenor reported taxable_income of dollar_figure and total_tax of dollar_figure for petitioner and intervenor signed the return on date the irs received the return on date martinez prepared the return on their joint income_tax return for return petitioner and intervenor reported the following sources of income source amount of income net_long-term_capital_gain universal painters dollar_figure big_number a large portion of the net_long-term_capital_gain was attributable to the redemption of big_number shares of founders growth fund one of the founders funds mutual funds jointly owned by petitioner and intervenor on date this redemption generated a dollar_figure long-term_capital_gain petitioner and intervenor reported taxable_income of dollar_figure and total_tax of dollar_figure for petitioner and intervenor signed the return on date the irs received the return on date martinez prepared the return petitioner and intervenor paid the income_tax liabilities reported on their joint income_tax returns for through at or about the times that they filed these returns with the irs at the times that petitioner signed these returns she was aware that each return showed a substantial tax_liability and that the total_tax liabilities reported on these returns exceeded dollar_figure after petitioner and intervenor filed their joint income_tax returns for through the irs determined additions to tax under sec_6651 and and interest with respect to the tax_liabilities reported on these returns the additions to tax were determined in the following amounts year sec_6651 sec_6651 sec_6654 dollar_figure big_number big_number big_number big_number -- dollar_figure big_number big_number big_number big_number big_number dollar_figure big_number big_number -- big_number big_number petitioner and intervenor were aware that they would be liable for additions to tax and interest at the times that they signed the joint income_tax returns for through prior to signing these returns however petitioner and intervenor decided that they would request that the irs abate any additions to tax accordingly they did not pay any amounts in excess of the income_tax liabilities reported on the joint income_tax returns for through at the times that they filed these returns petitioner did not question intervenor at or before the times that she signed these returns as to how and when the additions to tax and interest would be paid if their request for abatement was denied on date the irs denied petitioner’s and intervenor’s request for abatement as of date the additions to tax and interest totaled more than dollar_figure as of the time of trial on date the additions to tax and interest remained unpaid petitioner’s and intervenor’s divorce proceedings on date petitioner and intervenor separated and petitioner filed a petition for dissolution of marriage petitioner’s and intervenor’s marriage was dissolved by final decree of dissolution of marriage filed on date a final judgment as to equitable distribution alimony and child_support and visitation final judgment was filed on date among other things the final judgment declared intervenor solely responsible for payment of the additions to tax and interest that had been determined or may accrue with respect to the tax_liabilities reported on petitioner’s and intervenor’s joint income_tax returns for through on or about date intervenor filed an appeal with respect to the final judgment on or about date the final judgment was reversed in part an amended final judgment as to equitable distribution alimony and child_support and visitation amended final judgment was filed on date the amended final judgment awarded petitioner the following assets asset value stonegate residence lot southport mortgage proceeds furnishings and jewelry dollar_figure big_number big_number these assets were valued as of date in addition the amended final judgment awarded petitioner a dollar_figure equalizer payment awarded petitioner permanent periodic alimony of dollar_figure per year required intervenor to maintain the payments on petitioner’s automobile for the months succeeding entry of the amended final judgment required intervenor to pay all of the children’s reasonably necessary medical dental ocular psychological and orthodontia expenses and required intervenor to pay petitioner dollar_figure and interest thereon for previously ordered support the equalizer payment and the previously ordered support were to be paid within days of the date of the amended final judgment as set forth in the amended final judgment a hearing was to be held to determine the amount of the monthly child_support payments that intervenor would be required to make to petitioner the amended final judgment also declared intervenor solely responsible for payment of the additions to tax and interest that had been determined or may accrue with respect to the tax_liabilities reported on petitioner’s and intervenor’s joint income_tax returns for through petitioner’s request for relief from joint_and_several_liability on date the irs received petitioner’s form_8857 request for innocent spouse relief on which she requested relief from joint_and_several_liability under sec_6015 with respect to through on date the irs sent to petitioner a notice_of_determination concerning your request for relief from joint_and_several_liability under sec_6015 notice_of_determination with respect to those years the notice_of_determination set forth the following reasons for the denial of petitioner’s request for relief from joint_and_several_liability we’ve determined for the above tax years that you are not eligible for relief under sec_6015 sec_6015 allows us to provide equitable relief when you don’t qualify for relief under either sec_6015 or sec_6015 and when holding you responsible for the tax_liability would be unfair or inequitable given your particular circumstances in this case the unpaid liability is attributable to interest and penalties on the taxes shown on the returns you filed since there are no additional deficiencies assessed subsequent to these taxes relief under sec_6015 or sec_6015 is not applicable for sec_6015 relief is not warranted since you have not established that payment of the amount due would cause an economic hardship or that it would be inequitable to hold you liable for these amounts petitioner’s financial status as of the time of trial as of the time of trial on date intervenor was paying petitioner approximately dollar_figure per month for child_support and an additional dollar_figure per month to pay off the debt that he owed to her as a result of their divorce as of the time of trial petitioner was employed as a personal trainer at a naples area ymca and was earning approximately dollar_figure per week petitioner also had private personal training clients from time to time petitioner was eager to sell the stonegate residence which had a value in excess of dollar_figure as of the time of trial but she had not taken any steps towards doing so opinion generally married taxpayers may elect to file a joint federal_income_tax return sec_6013 after making the election each spouse is fully responsible for the accuracy of the return and jointly and severally liable for the entire tax due for that year sec_6013 114_tc_276 a spouse requesting spouse may however seek relief from joint_and_several_liability by following procedures established in sec_6015 sec_6015 under sec_6015 a requesting spouse may seek relief from liability under sec_6015 or if eligible may allocate liability according to the provisions under sec_6015 relief from joint_and_several_liability under sec_6015 or c is premised on the existence of a deficiency for the year for which relief is sought sec_6015 c see h conf rept pincite 1998_3_cb_747 consequently if there is no deficiency for the year for which relief is sought relief from joint_and_several_liability is not available under either subsection see 120_tc_137 see also 121_tc_73 120_tc_62 118_tc_494 n cf sec_6015 in this case petitioner seeks relief from additions to tax and interest that respondent determined with respect to the tax_liabilities reported on the joint income_tax returns for through rather than from deficiencies for those years accordingly no relief is available to petitioner under sec_6015 or c if relief is not available under either sec_6015 or c an individual may seek equitable relief under sec_6015 sec_6015 sec_6015 permits relief from joint_and_several_liability where it is inequitable to hold the individual liable for any unpaid tax or any deficiency or any portion of either sec_6015 equitable relief under sec_6015 is granted at the commissioner’s discretion we review the commissioner’s determination to deny equitable relief under sec_6015 using an abuse_of_discretion standard butler v commissioner supra pincite under this standard of review we defer to the commissioner’s determination unless it is arbitrary capricious or without sound basis in fact 118_tc_106 citing butler v commissioner supra pincite 101_tc_117 affd 353_f3d_1181 10th cir the question of whether the commissioner’s determination was arbitrary capricious or without sound basis in fact is a question of fact 115_tc_183 affd 282_f3d_326 5th cir we are not limited to the matters contained in the commissioner’s administrative record when deciding this question 122_tc_32 petitioner bears the burden of proving that respondent abused respondent’s discretion in denying her relief under sec_6015 washington v commissioner supra pincite jonson v commissioner supra pincite petitioner’s brief contains bold and general rhetoric and no analysis of the evidence or of the applicable authorities notwithstanding the court’s specific direction that her brief address sec_6015 and the relevant factors as directed by sec_6015 the commissioner has prescribed procedures to use in determining whether a relief- seeking spouse qualifies for relief under that subsection notice_98_61 1998_2_cb_756 provided interim guidance for taxpayers seeking equitable relief from joint_and_several_liability notice_98_61 supra was superseded by revproc_2000_15 2000_1_cb_447 effective date which in turn was superseded by revproc_2003_61 2003_32_irb_296 effective for requests for relief filed on or after date and for requests for relief pending on date for which no preliminary determination had been issued as of that date revproc_2003_61 secs and i r b pincite revproc_2000_15 secs and c b pincite petitioner’s request for relief and respondent’s determination are subject_to revproc_2000_15 2000_1_cb_447 because that revenue_procedure was in effect when respondent evaluated petitioner’s request and when respondent issued the notice_of_determination on date see ewing v commissioner supra pincite n this court has upheld the use of these procedures in reviewing a negative determination see eg washington v commissioner supra pincite jonson v commissioner supra pincite cf ewing v commissioner supra pincite subsequent modification of these procedures by revproc_2003_61 2003_32_irb_296 does not affect our analysis of this case revproc_2000_15 sec_4 c b pincite lists seven threshold conditions that must be satisfied before the commissioner will consider a request for relief under sec_6015 respondent conceded that petitioner has met those seven threshold conditions if the threshold conditions are satisfied revproc_2000_15 sec_4 c b pincite lists circumstances where relief will generally be granted in cases where a liability reported on a joint income_tax return has gone unpaid we have considered the circumstances listed in revproc_2000_15 sec_4 c b pincite in cases where the liability reported on a joint income_tax return was unpaid see eg morello v commissioner tcmemo_2004_181 august v commissioner tcmemo_2002_201 collier v commissioner tcmemo_2002_144 castle v commissioner tcmemo_2002_142 we have declined to consider them where the liability for which equitable relief was sought was not such a reported but unpaid liability see eg demirjian v commissioner tcmemo_2004_22 mellen v commissioner tcmemo_2002_280 in the instant case petitioner and intervenor paid the income_tax liabilities reported on their joint income_tax returns for through at or about the times that they filed these returns the additions to tax and interest resulted from among other things petitioner’s and intervenor’s failure_to_file these returns at the times that they were due consequently revproc_2000_15 sec_4 c b pincite is not applicable here if the requesting spouse satisfies the threshold conditions of revproc_2000_15 sec_4 c b pincite but does not qualify for relief under revproc_2000_15 sec_4 c b pincite the commissioner looks to revproc_2000_15 sec_4 c b pincite to determine whether the taxpayer should be granted equitable relief revproc_2000_15 sec_4 c b pincite provides a partial list of positive and negative factors that the commissioner is to take into account when considering whether to grant an individual full or partial equitable relief under sec_6015 as revproc_2000_15 sec_4 c b pincite makes clear no single factor is to be determinative in any particular case all factors are to be considered and weighed appropriately and the list of factors is not intended to be exhaustive revproc_2000_15 sec_4 c b pincite lists the following two factors that if true the commissioner weighs in favor of granting relief and that if not true are neutral the taxpayer is separated or divorced from the nonrequesting spouse and the taxpayer was abused by his or her spouse respondent conceded that the marital status factor weighs in petitioner’s favor the abuse factor is neutral in this case because petitioner failed to provide any detailed or corroborating evidence with respect to her generalized claim that intervenor was physically and emotionally abusive in addition revproc_2000_15 sec_4 c b pincite lists the following two factors that if true the commissioner weighs against granting relief and that if not true are neutral the taxpayer received a significant benefit from the unpaid liability and the taxpayer has not made a good_faith effort to comply with the federal_income_tax laws in the years following the year to which the request for relief relates the significant benefit factor weighs against petitioner because she and intervenor were able to purchase the stonegate residence and to maintain their comfortable lifestyle as a result of not paying the additions to tax and interest at the times that they filed their joint income_tax returns for through the noncompliance factor is neutral in this case because neither evidence nor argument has been presented as to whether this factor weighs against petitioner finally revproc_2000_15 sec_4 c b pincite lists the following four factors that if true the commissioner weighs in favor of granting relief and that if not true the commissioner weighs against granting relief the taxpayer would suffer economic hardship if relief were denied the taxpayer did not know and had no reason to know that the liability would not be paid at the time that the return was signed the liability for which relief is sought is solely attributable to the nonrequesting spouse and the nonrequesting spouse has a legal_obligation pursuant to a divorce decree or agreement to pay the outstanding liability the legal_obligation factor weighs in favor of granting relief only if the taxpayer did not know or have reason to know that at the time that the divorce decree or agreement was entered into the nonrequesting spouse would not pay the liability and weighs against granting relief only if the taxpayer has the obligation revproc_2000_15 sec_4 e f c b pincite petitioner argues that the economic hardship factor weighs in favor of granting her relief for the reasons discussed below the economic hardship factor the knowledge or reason to know factor and the attribution factor weigh against petitioner the legal_obligation factor would have weighed in petitioner’s favor but for the facts and circumstances of this case establishing that she knew or had reason to know that at the time that the amended final judgment was filed intervenor would not pay the additions to tax and interest consequently the legal_obligation factor is neutral in this case economic hardship is determined by using rules similar to those under sec_301_6343-1 proced admin regs and generally involves an inability to pay reasonable basic living_expenses this regulation provides that the commissioner will consider any information offered by the taxpayer that is relevant to the determination including but not limited to the taxpayer’s age ability to earn responsibility for dependents and the amount reasonably necessary for basic living_expenses see sec_301_6343-1 proced admin regs after respondent issued the notice_of_determination intervenor successfully appealed a portion of the final judgment and as a result an amended final judgment was filed in date as set forth in the amended final judgment petitioner was awarded unencumbered assets with a value in excess of dollar_figure as of date and intervenor was required inter alia to pay to petitioner more than dollar_figure with respect to previously ordered support and an equalizer payment among the unencumbered assets awarded to petitioner was the stonegate residence which as of the time of trial on date had appreciated to a value in excess of dollar_figure moreover as of the time of trial intervenor was paying to petitioner dollar_figure per month to satisfy his debt to her as well as approximately dollar_figure per month for child_support and petitioner was employed as a personal trainer and was earning approximately dollar_figure per week excluding any earnings from private personal training clients petitioner did not present evidence of her reasonable basic living_expenses or otherwise show economic hardship she asserted that liens in excess of dollar_figure have been placed on the stonegate residence since the time of her divorce from intervenor it is unclear whether the liens that she had in mind included liens for the tax_liabilities in dispute but in any event the record suggests that she would have substantial equity in the residence after satisfaction of those tax_liabilities and discharge of any other liens petitioner’s situation is dissimilar to the situations of those taxpayers who were living at or near poverty level at the time of their request for relief from joint_and_several_liability and who proved that they would suffer economic hardship without relief see eg washington v commissioner t c pincite foor v commissioner tcmemo_2004_54 ferrarese v commissioner tcmemo_2002_249 august v commissioner tcmemo_2002_201 rowe v commissioner tcmemo_2001_325 on the record in this case petitioner has not persuaded us that the economic hardship factor weighs in favor of granting her relief in order to satisfy the knowledge or reason to know factor under the circumstances of this case petitioner must establish that it was reasonable for her to believe that intervenor would pay the additions to tax and interest at the times that she signed those returns see eg ewing v commissioner t c pincite hopkins v commissioner t c pincite washington v commissioner supra pincite morello v commissioner tcmemo_2004_181 keitz v commissioner tcmemo_2004_74 foor v commissioner supra ogonoski v commissioner tcmemo_2004_52 wiest v commissioner tcmemo_2003_91 collier v commissioner tcmemo_2002_144 at the times in that petitioner signed the joint income_tax returns for through she was well aware of intervenor’s past failures to file their returns on time and to pay their income taxes petitioner was also aware that additions to tax and interest were owed on their joint liabilities for through petitioner testified as follows q by petitioner’s counsel did you have any discussions with him intervenor about paying penalties a i knew that there were penalties to be paid yes but as far as how much and how they were going to be paid no despite her knowledge of intervenor’s habitual delinquency with respect to their income_tax obligations petitioner agreed to defer payment of the additions to tax and interest and request that the additions to tax be abated petitioner did not question intervenor at or before the times that she signed the joint income_tax returns for through as to how and when the additions to tax and interest would be paid if their request for abatement was denied under these facts and circumstances petitioner has not established that it was reasonable for her to believe that intervenor would pay the additions to tax and interest at the times that she signed the joint income_tax returns for through furthermore petitioner has identified no ground warranting an abatement nor otherwise shown that it would have been reasonable for her to believe that an abatement would be granted we have consistently applied the principle that the provisions providing relief from joint_and_several_liability are designed to protect the innocent not the intentionally ignorant dickey v commissioner tcmemo_1985_478 see eg morello v commissioner supra demirjian v commissioner tcmemo_2004_22 feldman v commissioner tcmemo_2003_201 taylor v commissioner tcmemo_1997_513 barnhill v commissioner tcmemo_1996_97 shannon v commissioner tcmemo_1991_207 berry v commissioner tcmemo_1990_396 affd without published opinion 935_f2d_1280 3d cir cohen v commissioner tcmemo_1987_537 consequently the knowledge or reason to know factor weighs against granting petitioner relief the unpaid liability in this case is the result of among other things petitioner’s and intervenor’s failure_to_file their joint income_tax returns for through and to pay their income taxes for those years when they were due all taxpayers have a duty to file timely and accurate returns and to pay the amounts shown as due on those returns see generally sec_6001 sec_6011 sec_6012 sec_6072 sec_6151 therefore petitioner’s reliance on intervenor to handle the preparation and filing of their joint income_tax returns does not establish that the additions to tax and interest are solely attributable to intervenor furthermore petitioner has not denied that the income_tax liabilities reported on the joint income_tax returns for through were in part attributable to assets that she jointly owned with intervenor consequently the attribution factor weighs against granting petitioner relief based on our examination of the facts and circumstances in this case the factors in revproc_2000_15 sec_4 c b pincite weighing against granting petitioner relief outweigh those weighing in favor of granting her relief accordingly we conclude that respondent did not abuse respondent’s discretion by acting arbitrarily capriciously or without sound basis in fact in denying petitioner’s request for equitable relief under sec_6015 to reflect the foregoing decision will be entered for respondent