Court Opinion

ID: 4474538
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:00.035408+00
Date Added: 2024-06-11T14:53:52.335070
License: Public Domain

COLVIN, Judge: Respondent determined that petitioner is not entitled to relief from joint liability for tax under section 6015(f) for 1995. Petitioner filed a petition under section 6015(e)(1) seeking our determination whether she is entitled to relief under section 6015(f). The issues for decision are:1  (1) Whether, in determining petitioner’s eligibility for relief under section 6015(f), we may consider evidence introduced at trial which was not included in the administrative record. We hold that we may; (2) whether petitioner is entitled to relief from joint liability for tax under section 6015(f). We hold that she is. Section references are to the Internal Revenue Code in effect for the applicable years. Rule references are to the Tax Court Rules of Practice and Procedure. FINDINGS OF FACT Some of the facts have been stipulated and are so found. A. Petitioner and Petitioner’s Husband 1. Petitioner Petitioner resided in Martinez, California, when she filed her petition. She married Richard Wiwi (Mr. Wiwi) on September 9, 1995. At the time of trial, they were still married and living together. Petitioner is a licensed clinical laboratory scientist. In 1995, she worked full time for the Blood Bank of Alameda/ Contra Costa Counties as a medical technologist and was eligible for various employee benefits (not described further in the record). Later in 1995, the blood bank changed her position to part time. From 1997 to 1999, petitioner was employed in two temporary medical technologist positions, and she received no employee benefits. 2. Petitioner’s Husband In 1995, Mr. Wiwi was the sole proprietor of a financial services business. He was licensed to trade securities and sell insurance. Petitioner knew about his business, but she did not know how much he earned. He concealed from her the fact that he had prior financial obligations, including unpaid income tax for 1993 and 1994. 3. Petitioner and Her Husband’s 1995 Tax Return Taxes in the amount of $10,862 were withheld from petitioner’s wages in 1995. Mr. Wiwi made no estimated tax payments to the United States and was not subject to withholding in 1995. Petitioner and Mr. Wiwi filed a joint Federal income tax return for 1995. On that return, they reported Federal income tax withheld on petitioner’s wages of $10,862 and additional tax due of $6,220. However, they paid only $1,620 with their return; petitioner paid $1,069, and Mr. Wiwi paid $551. As a result of withholding and the payment with the return, petitioner paid an amount equal to the tax on her income, but Mr. Wiwi paid less than the tax due on his income. Mr. Wiwi told petitioner (and she reasonably believed) that he would pay the unpaid 1995 tax as provided in a proposed installment agreement that he submitted with their 1995 income tax return. Mr. Wiwi failed to pay the remaining 1995 tax, but he concealed that fact from petitioner until 1998. Early in 1999, he filed an offer in compromise in which he said he could not pay the unpaid tax for 1995. 4. Petitioner’s Finances Petitioner and Mr. Wiwi have always kept their finances separate. Petitioner paid her own expenses (including Federal income tax on her income) beginning before they were married and continuing until the time of trial. Petitioner paid at least half of their household expenses from the date they were married until 1997. Mr. Wiwi began having medical problems in 1996. He lost his license to sell securities in 1997, and his income decreased dramatically. Since 1997, petitioner has worked at several temporary jobs and paid all of her and about 80 percent of Mr. Wiwi’s expenses. Petitioner’s total monthly household expenses on behalf of herself and Mr. Wiwi in 1997 and 1998 (including rent, utilities, transportation, food, clothing, and medical insurance) were about $2,800. Petitioner had about $5,000 in her savings account in 1996 and $13,500 at the time of trial. She received wages of $65,792 in 1997, $65,338 in 1998, $66,315 in 2000, and $79,000 in 2002.2  Mr. Wiwi’s medical condition worsened, which prevented him from working in 2000. He had hip replacement surgery in 2000 and 2001. In 2000, petitioner liquidated an individual retirement account (ira) and used the proceeds (about $20,000) as part of a $33,000 downpayment to buy a $333,000 residence for Mr. Wiwi and herself. The monthly mortgage payment was about the same as their previous rent payments. At the time of trial, petitioner had a section 401(k) retirement account with the American Red Cross. The record does not indicate the value of that account. B. Petitioner’s Request for Relief From Joint Tax Liability On February 2, 1999, petitioner filed Form 8857, Request for Innocent Spouse Relief (And Separation of Liability and Equitable Relief), in which she sought relief from joint liability for a portion of the amount of the unpaid tax liability shown on the 1995 joint return. On June 6, 1999, respondent sent petitioner a letter which said that respondent had preliminarily determined that petitioner was not entitled to relief under section 6015(f). An Appeals officer met with petitioner’s representative for 3 hours on November 18, 1999, and for 2 hours on September 21, 2000. Respondent determined on October 31, 2000, that petitioner was not entitled to equitable relief under section 6015(f) for 1995. Respondent’s only stated reasons were: “You had knowledge of the liability, and you are still married and living with the nonrequesting spouse.” Exhibit 10-R, which includes the materials assembled by the examining agent and the Appeals officer in response to petitioner’s claim for equitable relief, is respondent’s administrative file (the administrative file) for this case. Petitioner timely filed a petition in this Court. OPINION A. Whether We Are Limited to Respondent’s Administrative Record in Making Our Determination 1. Respondent’s Position Respondent contends that, in making our determination under section 6015(f), we may not consider evidence introduced at trial which was not included in the administrative record. More specifically, respondent contends that, pursuant to the Administrative Procedure Act (apa), 5 U.S.C. secs. 551-559, 701-706 (2000), and cases decided thereunder, this Court may consider only the administrative record (the record rule) in making our determination in this case.3 See Camp v. Pitts, 411 U.S. 138, 142 (1973); United States v. Carlo Bianchi & Co., 373 U.S. 709, 715 (1963). We disagree. As discussed next, our holding herein is based on more than 75 years of well-established interpretative history and practice before this Court: 2. Our Jurisdiction To Determine Whether the Taxpayer Qualifies for Relief Under Section 6015(f) Section 6015(f)4 authorizes the Secretary to prescribe procedures under which, taking into account all the facts and circumstances, the Secretary may determine that it is inequitable to hold an individual jointly liable for tax. Section 6015(e)(1)(A)5 provides our jurisdiction in section 6015 cases. Section 6015(e)(1)(A) provides that a taxpayer against whom a deficiency has been asserted and who elects to have section 6015(b) or (c) apply may petition this Court “to determine the appropriate relief available to the individual” under section 6015, including relief under section 6015(f). Fernandez v. Commissioner, 114 T.C. 324, 330-331 (2000). To prevail under section 6015(f), petitioner must show that respondent’s denial of equitable relief from joint liability under section 6015(f) was an abuse of discretion. Jonson v. Commissioner, 118 T.C. 106, 125 (2002), affd. 353 F.3d 1181 (10th Cir. 2003); Cheshire v. Commissioner, 115 T.C. 183, 198 (2000), affd. 282 F.3d 326 (5th Cir. 2002); Butler v. Commissioner, 114 T.C. 276, 292 (2000). 3. Determinations and Redeterminations by This Court Section 6015(e)(1)(A), which authorizes this Court to determine the appropriate relief available under section 6015, is similar to our deficiency jurisdiction in section 6213, which provides that taxpayers who receive a notice of deficiency may petition this Court for a redetermination of the deficiency. Sec. 6213(a). It is well established that the APA does not apply to deficiency cases in this Court; that is, cases arising under section 6213 or 6214 in which we may redetermine the taxpayer’s tax liability. O’Dwyer v. Commissioner, 266 F.2d 575, 580 (4th Cir. 1959), affg. 28 T.C. 698 (1957); Nappi v. Commissioner, 58 T.C. 282, 284 (1972).6 In contrast, respondent contends that the APA applies to our proceedings under section 6015(f). As discussed next, we find no convincing reason to treat our determinations under section 6015(f) and section 6213(a) differently for purposes of applicability of the APA. We make redeterminations under section 6213(a) de novo. O’Dwyer v. Commissioner, supra at 580; Greenberg’s Express, Inc. v. Commissioner, 62 T.C. 324, 327-328 (1974); see Clapp v. Commissioner, 875 F.2d 1396, 1403 (9th Cir. 1989); Raheja v. Commissioner, 725 F.2d 64, 66 (7th Cir. 1984), affg. T.C. Memo. 1981-690; Jones v. Commissioner, 97 T.C. 7, 18 (1991) (“a trial before this Court is a proceeding de novo; hence our determination of a taxpayer’s liability must be based on the merits of the case and not on any previous record developed at the administrative level”). Congress has used both “determine” and “redetermination” in establishing the jurisdiction of the Tax Court. We see no material difference between the words “determine” in section 6015(e) and “redetermination” in section 6213(a) for purposes of this discussion. Since 1924, the Tax Court (and the predecessor Board of Tax Appeals, see Consol. Cos. v. Commissioner, 15 B.T.A. 645, 652 (1929)) has had jurisdiction to “redetermine” deficiencies and additions to tax, secs. 6213 and 6214(a); and, since 1926, to determine overpayments, sec. 6512(b). Under section 6213(a) and its predecessors, we (and earlier, the Board of Tax Appeals) have “redetermined” deficiencies de novo, not limited to the Commissioner’s administrative record, for more than 75 years. We can presume that Congress was aware of this long history in 1998 when Congress used the word “determine” in section 6015. If Congress includes language from a prior statute in a new statute, courts can presume that Congress intended the longstanding legal interpretation of that language to be applied to the new statute. Commissioner v. Noel’s Estate, 380 U.S. 678, 680-681 (1965); United States v. 101.80 Acres, 716 F.2d 714, 721 (9th Cir. 1983). There are other situations in which this Court makes determinations de novo. For example, section 7436(a) provides that the Tax Court may “determine” whether the Commissioner’s determination regarding an individual’s employment status is correct. Congress intended that we conduct a trial de novo with respect to our determinations regarding employment status. See H. Rept. 105-148, at 639 (1997), 1997-4 C.B. (Vol. 1) 319, 961; S. Rept. 105-33, at 304 (1997), 1997-4 C.B. (Vol. 2) 1067, 1384; H. Conf. Rept. 105-220, at 734 (1997), 1997-4 C.B. (Vol. 2) 1457, 2204. As another example, section 6404 authorizes this Court to “determine” whether the Secretary’s refusal to abate interest was an abuse of discretion. Our practice has been to make our determination after providing an opportunity for a trial de novo. See, e.g., Goettee v. Commissioner, T.C. Memo. 2003-43; Jean v. Commissioner, T.C. Memo. 2002-256; Jacobs v. Commissioner, T.C. Memo. 2000-123. Our long tradition of providing trials de novo in making our determinations, and Congress’s use of the word “determine” in our jurisdictional grant in section 6015(e)(1)(A), suggest that Congress intended that we provide an opportunity for a trial de novo in making our determinations under section 6015(f).7  4. Whether Trial De Novo Is Appropriate in Determining Whether Respondents Determination Under Section 6015(f) Was an Abuse of Discretion Respondent contends that, because a taxpayer is entitled to relief under section 6015(f) only if we determine that the Commissioner’s determination was an abuse of discretion, we may consider only the Commissioner’s administrative record in making our determination. We disagree. Respondent’s view that we should not provide a trial de novo if the standard of review is abuse of discretion is at odds with decades of Tax Court precedent and practice. The traditional effect of applying an abuse of discretion standard in this Court is to alter the standard of review, not to restrict what evidence we consider in making our determination. Courts have used various, but similar, phrases to describe the meaning of an abuse of discretion standard, such as: The taxpayer bears a heavy burden of proof, the Commissioner’s position deserves our deference, and we do not interfere unless the Commissioner’s determination is arbitrary, capricious, clearly unlawful, or without sound basis in fact or law. See, e.g., Thor Power Tool Co. v. Commissioner, 439 U.S. 522, 532-533, 550 (1979); Jonson v. Commissioner, 118 T.C. at 125; see also Patton v. Commissioner, 116 T.C. 206, 210 (2001); Buzzetta Constr. Corp. v. Commissioner, 92 T.C. 641, 648 (1989); Oakton Distribs., Inc. v. Commissioner, 73 T.C. 182, 188 (1979). Our longstanding practice has been to hold trials de novo in many situations where an abuse of discretion standard applies. In those cases, our practice has not been to limit taxpayers to evidence contained in the administrative record or arguments made by the taxpayer at the administrative level. Examples of actions in which we conduct a trial de novo are whether it was an abuse of discretion for the Commissioner to (1) determine that a taxpayer’s method of accounting did not clearly reflect income under section 446, e.g., Thor Power Tool Co. v. Commissioner, supra at 533 (Supreme Court used Tax Court findings in making its determination); Mulholland v. United States, 25 Cl. Ct. 748 (1992);8 (2) reallocate income or deductions under section 482, e.g., Bausch & Lomb, Inc. v. Commissioner, 933 F.2d 1084, 1088 (2d Cir. 1991) (U.S. Court of Appeals for the Second Circuit implicitly approved our de novo consideration of section 482 reallocations), affg. 92 T.C. 525 (1989); (3) fail to waive penalties and additions to tax, e.g., Krause v. Commissioner, 99 T.C. 132, 179 (1992) (based in part on the Commissioner’s expert’s testimony that taxpayers were influenced by energy crisis to invest in energy partnerships, failure to waive the addition to tax for underpayment attributable to valuation overstatement under section 6659(e) was an abuse of discretion), affd. sub nom. Hildebrand v. Commissioner, 28 F.3d 1024 (10th Cir. 1994); (4) refuse to abate interest under section 6404, see par. A-3, above; (5) refuse to grant the taxpayer’s request for an extension of time to file, e.g., Estate of Proios v. Commissioner, T.C. Memo. 1994-442 (taxpayer’s failure to call witnesses held against the taxpayer); and (6) disallow a bad debt reserve deduction, e.g., Newlin Mach. Corp. v. Commissioner, 28 T.C. 837, 845 (1957) (testimony and evidence considered). We are aware of no reason to depart from this longstanding practice in making our determination under section 6015(f). 5. Magana v. Commissioner Does Not Govern This Case In Magana v. Commissioner, 118 T.C. 488 (2002), a case in which we reviewed the Commissioner’s determination under section 6330(d)(1) that tax lien filings were appropriate, we held that, absent special circumstances, the taxpayer could not raise before this Court an issue he had not raised in a hearing conducted by the Commissioner’s Appeals Office under section 6330(b). Id. at 493. The issue the taxpayer first sought to raise before this Court was that collection of tax would cause hardship to him because of his poor health and the resulting cloud on title to his residence, his only significant asset. Id. at 493-494. We said that, absent special circumstances, in our review of whether the Commissioner’s determination was an abuse of discretion under section 6330(d),9 we consider only arguments, issues, and other matters that were raised at the section 6330(b) hearing or otherwise brought to the attention of the Appeals Office. Id. Respondent contends that, under our holding in Magana, we may not consider facts or issues that were not previously raised by the taxpayer during the Commissioner’s consideration of the taxpayer’s request for relief under section 6015(f). We disagree that Magana applies here, for several reasons. First, in Magana, we said we were not deciding whether our holding therein applies to claims for relief from joint liability under section 6015 raised in a collection proceeding under section 6330. Id. at 494 n.3. Clearly, then, our holding in Magana does not apply to claims for relief from joint liability not brought under section 6330, e.g., brought as stand-alone claims under section 6015(f). Second, we did not say in Magana that the taxpayer would be limited to the administrative record or that the taxpayer may not offer evidence in the proceeding in this Court. Third, in Magana we did not discuss the APA or the record rule. Thus, we conclude that Magana does not govern here. 6. Our Adoption of Respondent’s Position Would Lead to Inconsistent Procedures in Similar Cases Adoption of respondent’s position would lead to the anomaly of proceedings in some section 6015(f) cases on the basis of the Commissioner’s administrative record and trials de novo in others. Consider two examples. First, a trial de novo would be necessary if a taxpayer petitions this Court 6 months after filing an election for section 6015 relief and the Commissioner has made no determination granting or denying relief. Sec. 6015(e)(l)(A)(i)(II). We have jurisdiction to make a determination in this situation, even though there may be no administrative record. Thus, trial de novo is clearly authorized and appropriate. Second, in a deficiency case, we hold a trial de novo relating to a taxpayer’s affirmative defense that he or she is entitled to innocent spouse relief under section 6015(f). See, e.g., Butler v. Commissioner, 114 T.C. at 287, 292. Adoption of respondent’s position here would cause us to apply different procedures in our determinations under section 6015 cases. We have previously indicated our preference for uniform procedures under section 6015(e). For example, we have declined to treat nonelecting spouses in deficiency proceedings differently from nonelecting spouses in stand-alone proceedings (i.e., cases in which a taxpayer requests relief from joint and several liability that are independent of any deficiency proceeding). Corson v. Commissioner, 114 T.C. 354, 364 (2000). Similarly, we believe taxpayers should have the same opportunity to have a trial de novo relating to entitlement to relief under section 6015(f) whether relief was raised as an affirmative defense in a deficiency proceeding, in a stand-alone proceeding where the Commissioner has issued a final determination denying the taxpayer’s request for relief, or in a stand-alone proceeding where the Commissioner has failed to rule on the taxpayer’s claim within 6 months of its filing. In Corson v. Commissioner, supra at 364, we stated: we believe that the interests of justice would be ill served if the rights of the nonelecting spouse were to differ according to the procedural posture in which the issue of relief under section 6015 is brought before the Court. Identical issues before a single tribunal should receive similar treatment. * * * As in Corson, we believe that cases in which the taxpayer seeks relief under section 6015(f) should receive similar treatment and, thus, the same standard of review. The nonrequesting spouse may elect to intervene in the judicial proceeding in which we determine whether the requesting spouse qualifies for relief under section 6015(f). Sec. 6015(e)(4).10 This election is available both in deficiency cases in which section 6015 relief is requested, and in standalone cases, such as this case. Rule 325; King v. Commissioner, 115 T.C. 118, 122-123 (2000); Corson v. Commissioner, supra at 365. The fact that Congress provided for intervention by nonrequesting spouses in the Tax Court proceeding suggests Congress intended that we conduct trials de novo in making our determinations under section 6015(f) to permit the intervenor to offer evidence to challenge the requesting spouse’s entitlement to relief. 7. Conclusion Part of our interpretative responsibility here is to give proper effect to both section 6015(e) and (f). Courts attempt to read statutory provisions harmoniously, so as to give proper effect to all of the words of the statute. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (citing FTC v. Mandel Bros., Inc., 359 U.S. 385, 389 (1959)); Bend v. Hoyt, 38 U.S. 263, 272 (1839). We have done so here. We read these provisions to give effect to the other. Our de novo review of the Commissioner’s determinations under section 6015(f) gives effect to the congressional mandate that we determine whether a taxpayer is entitled to relief under section 6015. The measure of deference provided by the abuse of discretion standard is a proper response to the fact that section 6015(f) authorizes the Secretary to provide procedures under which, based on all the facts and circumstances, the Secretary may relieve a taxpayer from joint liability. That approach (de novo review, applying an abuse of discretion standard) properly implements the statutory provisions at issue here, and has a long history in numerous other areas of Tax Court jurisprudence. See supra pp. 40-41. We conclude that our determination whether petitioner is entitled to equitable relief under section 6015(f) is made in a trial de novo and is not limited to matter contained in respondent’s administrative record, and that the APA record rule does not apply to section 6015(f) determinations in this Court.11  B. Whether Petitioner Is Entitled to Equitable Relief Respondent contends that, even if we consider matter raised at trial which was not included in the administrative file, respondent’s determination that petitioner is not entitled to equitable relief was not an abuse of discretion. We disagree. The Commissioner announced a list of factors in Rev. Proc. 2000-15, sec. 4.03, 2000-1 C.B. 447, 448,12 that the Commissioner will consider in deciding whether to grant equitable relief under section 6015(f). Rev. Proc. 2000-15, supra, lists the following two facts, which if true, the Commissioner weighs in favor of granting relief: (1) The taxpayer is separated or divorced from the nonrequesting spouse; and (2) the taxpayer was abused by his or her spouse; and the following two facts, which if true, the Commissioner weighs against granting relief: (3) the taxpayer received significant benefit from the unpaid liability or the item giving rise to the deficiency; and (4) the taxpayer has not made a good faith effort to comply with Federal income tax laws in the tax years following the tax year to which the request for relief relates. Rev. Proc. 2000-15, supra, implies that the Commissioner will generally not consider the absence of facts (1), (2), (3), or (4) in determining whether to grant relief under section 6015(f). However, based on caselaw deciding whether it was equitable to relieve a taxpayer from joint liability under former section 6013(e)(1)(D), we consider the fact that a taxpayer did not significantly benefit from the unpaid liability or item giving rise to the deficiency as a factor in favor of granting relief to that taxpayer.13 Ferrarese v. Commissioner, T.C. Memo. 2002-249 (citing Belk v. Commissioner, 93 T.C. 434, 440-441 (1989); Foley v. Commissioner, T.C. Memo. 1995-16; Robinson v. Commissioner, T.C. Memo. 1994-557; Klimenko v. Commissioner, T.C. Memo. 1993-340; Hillman v. Commissioner, T.C. Memo. 1993-151). Rev. Proc. 2000-15, supra, lists the following four facts which, if true, the Commissioner weighs in favor of granting relief, and if not true, the Commissioner weighs against granting relief: (5) the taxpayer would suffer economic hardship if relief is denied; (6) in the case of a liability that was properly reported but not paid, the taxpayer did not know and had no reason to know that the liability would not be paid; (7) the liability for which relief is sought is attributable to the nonrequesting spouse; and (8) the nonrequesting spouse has a legal obligation pursuant to a divorce decree or agreement to pay the outstanding liability (weighs against relief only if the requesting spouse has the obligation). Rev. Proc. 2000-15, sec. 4.03(2), supra, also states: No single factor will be determinative of whether equitable relief will or will not be granted in any particular case. Rather, all factors will be considered and weighed appropriately. The list is not intended to be exhaustive. As discussed next, none of the factors used by the Commissioner in making section 6015(f) determinations supports respondent’s determination in this case. 1. Petitioner’s Marital Status Petitioner was still married to Mr. Wiwi at the time of trial. Respondent determined without further explanation, but did not otherwise argue before the Court, that the marital status factor weighs against petitioner. We conclude that this factor is neutral. 2. Spousal Abuse Mr. Wiwi did not abuse petitioner. Respondent does not contend that the spousal abuse factor weighs against petitioner. We conclude that this factor is neutral. 3. Significant Benefit Respondent does not argue that petitioner significantly benefited from Mr. Wiwi’s underpayment of tax for 1995. Petitioner has paid more than one-half of her and Mr. Wiwi’s expenses since the time they were married. Petitioner has not received any income or other financial benefit from Mr. Wiwi. Petitioner’s financial situation worsened after 1995 due to Mr. Wiwi’s financial problems. We conclude that petitioner did not significantly benefit from Mr. Wiwi’s failure to pay tax on his income and that this factor favors petitioner. 4. Compliance With Tax Laws Petitioner filed returns for tax years following 1995 and has complied with tax laws at least since 1995. Respondent contends that petitioner was not in compliance with Federal tax laws because taxes were underwithheld from petitioner’s income for 1997. We disagree. Although taxes were under-withheld from petitioner’s income for 1997, petitioner paid an amount equal to the tax on her income for that year by paying $4,453 with the 1997 joint return she timely filed with Mr. Wiwi. Respondent does not explain how the fact that petitioner was underwithheld for 1 tax year shows that she was noncompliant with the tax laws; respondent does not contend that petitioner’s payment for 1997 was late or inadequate or that she was underwithheld in any other year. The fact that taxes were underwithheld from petitioner for 1997 does not mean that she was not in compliance with the tax laws. On the contrary, her timely payment of all taxes she owed for that year shows she complied with the tax laws.14 Rev. Proc. 2000-15, supra, lists tax compliance as a factor which the Secretary will consider only against granting relief. We conclude that this factor is neutral. 5. Economic Hardship Respondent contends that petitioner had enough assets and income from which to pay the unpaid tax for 1995 and that petitioner failed to show that she would suffer economic hardship if relief were denied. Petitioner contends that she would suffer economic hardship if relief were denied because she would be unable to pay for basic living expenses for herself and Mr. Wiwi. Petitioner paid all of her and at least half of Mr. Wiwi’s monthly living expenses, totaling about $2,800, in 1997 and 1998. During that time, petitioner had only temporary and part-time jobs and had no benefits. Mr. Wiwi’s medical condition worsened, and his ability to earn any income decreased. Petitioner remained married to Mr. Wiwi and paid his increasing expenses. Petitioner was prudent in saving some money under these circumstances. On the facts of this case, we disagree with respondent that petitioner would not suffer a hardship if she were required to use her savings, or to borrow against the equity in her house, to pay the unpaid tax attributable to Mr. Wiwi. We conclude that this factor favors petitioner. 6. Knowledge or Reason To Know In determining whether a taxpayer in an underpayment case is entitled to equitable relief under section 6015(f), we consider whether the requesting spouse knew, or had reason to know, that the tax would be unpaid when the return was signed. Hopkins v. Commissioner, 121 T.C. 73, 88 (2003); Wiest v. Commissioner, T.C. Memo. 2003-91. Respondent contends that, when petitioner signed the 1995 return, she knew or had reason to know that Mr. Wiwi would not pay the tax due for 1995, and that it was not reasonable for petitioner to believe that Mr. Wiwi would pay the tax. We disagree. When Mr. Wiwi and petitioner filed their 1995 tax return, he told her, and she reasonably believed, that he would pay the unpaid tax for 1995 according to an installment agreement he had attached to the return. However, Mr. Wiwi failed to pay that tax or to pay tax according to the installment agreement. Mr. Wiwi concealed from petitioner until 1998 that he had failed to pay the unpaid 1995 tax. During those years petitioner did not know and had no reason to know of Mr. Wiwi’s failure to pay that tax. This fit his pattern of deception; Mr. Wiwi had also concealed from her that he owed tax for 1993 and 1994. Respondent offered no contrary evidence on this factor. We conclude that this factor favors petitioner. 7. Whether the Underpayment of Tax Is Attributable to Petitioner’s Husband Respondent concedes that the underpayment of tax for 1995 is attributable to Mr. Wiwi. 8. Legal Obligation To Pay Tax Respondent does not argue that the legal obligation factor weighs against petitioner. We conclude that the legal obligation factor does not apply here because petitioner and Mr. Wiwi are not divorced. Ferrarese v. Commissioner, T.C. Memo. 2002-249; see Washington v. Commissioner, 120 T.C. 137, 148-149 (2003). 9. Other Factors A taxpayer is entitled to equitable relief under section 6015(f) if, taking into account all the facts and circumstances, it is inequitable to hold that individual liable. Rev. Proc. 2000-15, supra, acknowledges that the factors listed therein are not exhaustive. Despite this, respondent did not consider the fact, as discussed above, that petitioner did not participate in any wrongdoing in this case; on the contrary, the problem began with Mr. Wiwi, who, as discussed above, concealed from petitioner that he had not paid the unpaid tax for 1995. In deciding whether it is inequitable to hold a spouse liable under section 6015(b)(1)(D),15 we have considered whether the failure to report the correct tax liability on the joint return results from concealment, overreaching, or any other wrongdoing on the part of the other spouse. Hayman v. Commissioner, 992 F.2d 1256, 1262 (2d Cir. 1993), affg. T.C. Memo. 1992-228; Alt v. Commissioner, 119 T.C. 306, 314 (2002); Jonson v. Commissioner, 118 T.C. at 119. It is also relevant to petitioner’s claim for relief that petitioner and Mr. Wiwi were married for less than 4 months in 1995; all of the problems began with Mr. Wiwi in that most of Mr. Wiwi’s underpayment of tax for 1995 apparently occurred because he failed to make estimated tax payments before they were married. These facts support petitioner’s claim that she is entitled to relief under section 6015(f). 10. Conclusion Petitioner has presented an especially strong case for relief from joint liability under factors promulgated by the Commissioner in Rev. Proc. 2000-15, supra: all of these factors either weigh in favor of petitioner or are neutral, and none of those factors weigh against granting relief to petitioner. Petitioner did not significantly benefit from the underpayment, the underpayment was solely attributable to Mr. Wiwi, she has complied with Federal tax laws at least since 1995, she did not know or have reason to know Mr. Wiwi would not pay the unpaid tax for 1995, and payment of the tax would cause economic hardship. The neutral factors include petitioner’s marital status and lack of spousal abuse. The legal obligation factor does not apply here because petitioner and Mr. Wiwi are still married. We determine that respondent’s denial of relief under section 6015(f) was an abuse of discretion, and that, on the basis of all the facts and circumstances, it would be inequitable to hold petitioner liable for the underpayment of tax for 1995. To reflect the foregoing, Decision will be entered for petitioner. Reviewed by the Court. Wells, Cohen, Swift, Gerber, Laro, Vasquez, Gale, Thornton, Haines, Goeke, and Kroupa, JJ., agree with this majority opinion. Wherry J., concurs in the result only.   We have previously decided that we have jurisdiction in this case. Ewing v. Commissioner, 118 T.C. 494 (2002).    The record does not indicate the amount of petitioner’s income for 1999 and 2001.    The Commissioner has recently taken the contrary position in three U.S. Courts of Appeals cases. Specifically, the Commissioner contended that the Tax Court did not err in collection cases arising under sec. 6330 in allowing the introduction of evidence that was not part of the administrative record. See the Commissioner’s briefs in Holliday v. Commissioner, 57 Fed. Appx. 774 (9th Cir. 2003), affg. T.C. Memo. 2002-67; Lindsey v. Commissioner, 56 Fed. Appx. 802 (9th Cir. 2003), affg. T.C. Memo. 2002-87; and Chase v. Commissioner, 55 Fed. Appx. 717 (5th Cir. 2002), affg. T.C. Memo. 2002-93. In the Commissioner’s brief in Holliday v. Commissioner, supra, the Commissioner argued that the: taxpayer labors under the faulty assumption that judicial review of CDP hearings is governed by the “record review” requirements of the Administrative Procedure Act, * * ® Although judicial review of the merits of agency actions pursuant to the APA is generally limited to the administrative record upon which the challenged action was based, see, e.g., Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743-44 (1985); Camp v. Pitts, 411 U.S. 138, 142 (1973), taxpayer’s petition in Tax Court was founded upon I.R.C. §6330(d)(l), not the judicial review provisions of the APA. * * * Section 6330 does not impose any requirement that the Office of Appeals create a record or that judicial review by the Tax Court be limited to the facts or documents presented at the CDP hearing. These three Courts of Appeals opinions are unpublished and are not binding precedent. In each of those opinions, the Court of Appeals upheld the Commissioner’s position.    Sec. 6015(f) provides: SEC. 6015(f). Equitable Relief. — Under procedures prescribed by the Secretary, if— (1) taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either); and (2) relief is not available to such individual under subsection (b) or (c), the Secretary may relieve such individual of such liability.    SEC. 6015(e). Petition for Review by Tax Court.— (1) In general. — In the case of an individual against whom a deficiency has been asserted and who elects to have subsection (b) or (c) apply— (A) In general. — In addition to any other remedy provided by law, the individual may petition the Tax Court (and the Tax Court shall have jurisdiction) to determine the appropriate relief available to the individual under this section if such petition is filed—    In O’Dwyer v. Commissioner, 266 F.2d 575, 580 (4th Cir. 1959), affg. 28 T.C. 698 (1957), the U.S. Court of Appeals for the Fourth Circuit held that 5 U.S.C. sec. 554(a)(1) does not apply to deficiency determinations in this Court because in those cases we are not reviewing a record of a formal proceeding; i.e., there is no hearing transcript, witness testimony, or exhibits introduced by the parties. To emphasize that the Tax Court is a trial court, the court in O’Dwyer pointed out that the Tax Court is empowered to prescribe rules of practice and procedure and is required to apply the rules of evidence applicable to nonjury trials in the U.S. District Court for the District of Columbia and to make findings of fact upon such evidence. Secs. 6213, 7453, 7459.    This Court has jurisdiction to issue declaratory judgments relating to the status, qualification, valuation, or classification of certain sec. 501(c)(3) organizations, retirement plans, gifts, governmental obligations, and installment payments under sec. 6166. Secs. 7428, 7476, 7477, 7478, 7479. None of those sections authorizes us to make a determination; instead, those provisions authorize this Court, after the Commissioner has made a determination, to make a declaration with respect to the matter. Our Rules relating to declaratory judgment cases provide for consideration of evidence not in the administrative record under various circumstances. Our disposition of actions under sec. 7476 for declaratory judgment involving the initial qualification of a retirement plan and actions under sec. 7428 for the initial qualification or classification of an exempt organization, private foundation, or private operating foundation is “ordinarily” based on the administrative record, unless, “with the permission of the Court, upon good cause shown,” the Court permits a party to introduce evidence that had not been presented to the Commissioner. Rule 217(a). Our disposition of a governmental obligation action under sec. 7478 is “made on the basis of the administrative record, augmented by additional evidence to the extent that the Court may direct.” Id. Our disposition of a declaratory judgment action involving a revocation, gift valuation, or the eligibility of an estate with respect to installment payments under sec. 6166 “may be made on the basis of the administrative record alone only where the parties agree that such record contains all the relevant facts and that such facts are not in dispute.” Id.    The U.S. Court of Federal Claims conducts a trial de novo in tax refund cases in which the Commissioner has exercised discretion and determined that the taxpayer’s method of accounting does not clearly reflect income under sec. 446(b). Mulholland v. United States, 25 Cl. Ct. 748 (1992). In Mullholland, the Claims Court rejected the Government’s contention that Thor Power Tool Co. v. Commissioner, 439 U.S. 522 (1979), limits the court to review of the record and the facts upon which the Commissioner relied in making the determination. The court said that the Supreme Court did not indicate in Thor Power Tool Co. v. Commissioner, supra, and AAA v. United States, 367 U.S. 687 (1961), “that either the Tax Court or the Court of Claims improperly conducted a trial de novo to determine whether the Commissioner had, in fact, abused his discretion in determining whether the accounting method clearly reflected income. Instead, the [Supreme] Court relied on the findings of fact of both courts in making its own determination.” Mulholland v. United States, supra at 756.    Under sec. 6330, we review a taxpayer’s underlying tax liability de novo. Sego v. Commissioner, 114 T.C. 604, 610 (2000); Goza v. Commissioner, 114 T.C. 176, 181-182 (2000). Magana v. Commissioner, 118 T.C. 488, 493 (2002), involved only issues where our review was for abuse of discretion. In Magana, underlying tax liability was not at issue.    Sec. 6015(e)(4) provides in pertinent part that “The Tax Court shall establish rules which provide the individual * * * not making the election * * * with adequate notice and an opportunity to become a party to a proceeding”.    Our holding herein is consistent with APA provisions relating to judicial determinations made in connection with agency actions. Tit. 5 U.S.C. sec. 554 (2000) (“Adjudications”) does not apply to matters subject to trial of the law and the facts de novo, such as our redetermination of a deficiency. O’Dwyer v. Commissioner, 266 F.2d 575, 580 (4th Cir. 1959), affg. 28 T.C. 698 (1957). Tit. 5 U.S.C. sec. 706(2)(F) (2000) provides, inter alia, that a “reviewing court” shall “hold unlawful and set aside agency action, findings and conclusions found to be * * 4 unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.” A matter may be made subject to trial de novo by U.S. Code provisions applicable to a specific action. See, e.g., 7 U.S.C. sec. 2023(a)(15) (2000) (suits for judicial review of certain agency actions under the food stamp program are by “a trial de novo * * * in which the court shall determine the validity of the questioned administrative action in issue”). As held herein, our determinations under sec. 6015(e) are made based on trials de novo. The legislative history of sec. 6015 does not suggest that Congress contemplated changing the well-established inapplicability of the APA to Tax Court determinations. S. Rept. 105-174, at 55-60 (1998), 1998-3 C.B. 537, 591-596; H. Conf. Rept. 105-599, at 249-255 (1998), 1998-3 C.B. 747, 1003-1008.    Respondent’s determination was subject to Rev. Proc. 2000-15, 2000-1 C.B. 447, because it was in effect when respondent’s Appeals officer evaluated petitioner’s request and when respondent issued the notice of determination. Rev. Proc. 2000-15, supra, superseded Notice 98-61, 1998-2 C.B. 756, effective Jan. 18, 2000. Rev. Proc. 2003-61, 2003-32 I.R.B. 296 (Aug. 11, 2003), superseded Rev. Proc. 2000-15, supra, for requests for relief under sec. 6015(f) pending on Nov. 1, 2003, for which no preliminary determination letter had been issued as of Nov. 1, 2003, and for requests for relief filed on or after Nov. 1, 2003.    Cases deciding whether a taxpayer was entitled to equitable relief under sec. 6013(e)(1)(D) are helpful in deciding whether a taxpayer is entitled to relief under sec. 6015(f). Mitchell v. Commissioner, 292 F.3d 800, 806 (D.C. Cir. 2002), affg. T.C. Memo. 2000-332; Cheshire v. Commissioner, 282 F.3d 326, 338 n.29 (5th Cir. 2002), affg. 115 T.C. 183 (2000).    Respondent does not contend that petitioner is liable for the penalty under sec. 6654 for failure to pay estimated tax for 1997.    The equitable factors we consider under sec. 6015(b)(1)(D) are the same equitable factors we consider under sec. 6015(f). Alt v. Commissioner, 119 T.C. 306, 316 (2002); Butler v. Commissioner, 114 T.C. 276, 291 (2000).