Court Opinion

ID: 6115034
Source: CourtListenerOpinion
Date Created: 2022-02-03 13:01:59.518534+00
Date Added: 2024-06-11T08:59:50.665258
License: Public Domain

United States Tax Court
                                  Washington, DC 20217

Ana Margarita Fiengo, Petitioner, and      )
Pascual E. Fiengo, Sr., Intervenor         )
                                           )
                Petitioners                )
                                           )     Docket No. 1250-20
                v.                         )
                                           )
Commissioner of Internal Revenue,          )
                                           )
                Respondent

                     ORDER OF SERVICE OF TRANSCRIPT

      Pursuant to Rule 152(b) of the Tax Court Rules of Practice and Procedure, it
is

        ORDERED that the Clerk of the Court shall transmit herewith to petitioner,
intervenor, and to the Commissioner a copy of the pages of the transcript of the
trial in this case before the undersigned judge at the Jacksonville, Florida remote
session containing his oral findings of fact and opinion rendered at the conclusion
of the trial session at which the case was heard.
      In accordance with the oral findings of fact and opinion, a decision will be
entered for respondent.

                                (Signed) Christian N. Weiler
                                          Judge

                                  Served 02/03/22
                                                                   3
1    Bench Opinion by Judge Christian N. Weiler

2    December 17, 2021

3    Ana Margarita Fiengo, Petitioner and Pascuzi E. Fiengo

4    Sr., Intervenor v. Commissioner

5    Docket No. 1250-20

6               THE COURT:   This Court has decided to render

7    oral findings of fact and opinion in this case, and the

8    following represents the Court's oral findings of fact and

9    opinion.   The oral findings of fact and opinion shall not

10   be relied upon as precedent in any other case.

11              This bench opinion is made pursuant to the

12   authority granted by section 7459(b) of the Internal

13   Revenue Code of 1986, as amended, and Rule 152 of the Tax

14   Court Rules of Practice and Procedure.    Hereinafter in

15   this bench opinion, all section references are to the

16   Internal Revenue Code of 1986, as amended, in effect for

17   the years in issue, and all Rule references are to the Tax

18   Court Rules of Practice and Procedure.    Dollar amounts are

19   rounded to the nearest dollar.

20              This case arises from respondent's Final Notice

21   of Determination denying petitioner's request for innocent

22   spouse relief from joint and several liability in respect

23   of underpayments of tax reported on joint Federal income

24   tax returns for the taxable years 2011, 2012, 2013, and

25   2014 (hereinafter "years in issue").     As of November 15,
                                                                   4
1    2021, petitioner owes $11,339 for the 2011 tax year;

2    $11,285 for the 2012 tax year; $4,062 for the 2013 tax

3    year; and $15,668 for the 2014 tax year, all of which are

4    comprised of unpaid taxes, penalties, and interest.

5                 Petitioner filed these joint returns with

6    Pascual E. Fiengo, Sr., her now former spouse.     Petitioner

7    filed a timely petition for review with this Court.

8    Pascual Fiengo, intervenor, exercised his right to

9    intervene in this action pursuant to section 6015(e)(4)

10   and Rule 325(b), and he enjoys the rights of a party in

11   this case.     See Tipton v. Commissioner, 127 T.C. 214, 217

12   (2006).   Both petitioner and intervenor resided in Florida

13   at the time the petition was filed.

14                Petitioner and intervenor appeared at trial pro

15   se.   Edward A. Waters appeared on behalf of respondent.

16   The issue for decision is whether petitioner is entitled

17   to innocent spouse relief pursuant to section 6015(b),

18   (c), or (f) for the years in issue.

19   Background

20                The parties filed with the Court a stipulation

21   of facts, with accompanying exhibits, that is incorporated

22   herein by this reference.

23                Petitioner and intervenor filed joint Federal

24   income tax returns for the years in issue.     The joint

25   returns filed for 2011, 2012, and 2013 were filed after
                                                                5
1    the due date, including extensions.    The joint return for

2    2014 was timely filed.    Respondent accepted petitioner and

3    intervenor's joint returns for all years as filed.

4                Petitioner and intervenor jointly owned a

5    business.   Intervenor acted as the tradesman and performed

6    the actual labor for the business, while petitioner did

7    paperwork for the business and performed other

8    administrative duties.    Petitioner and intervenor listed

9    the business on Schedule E, Supplemental Income and Loss,

10   of their returns filed for the years in issue.    Petitioner

11   and intervenor each received a Schedule K-1, Shareholder's

12   Share of Income, Deductions, Credits, etc., for income

13   related to their interest in the business during the years

14   in issue.   The joint account transcripts for the years in

15   issue reflect underpayments of tax, primarily attributable

16   to income related to the business owned by petitioner and

17   intervenor.   Petitioner was responsible for both the

18   personal and business finances of both petitioner and

19   intervenor from 1984 through 2018.

20               On or about November 16, 2018, intervenor filed

21   a Petition for Dissolution of Marriage.    Pursuant to the

22   Final Judgment of Dissolution of Marriage and Order on

23   Report and Recommendation of General Magistrate, dated

24   April 6, 2021, petitioner and intervenor are now divorced.

25   Prior to their divorce being finalized, petitioner and
                                                                  6
1    intervenor lived separate and apart for more than 12

2    months.     Petitioner has no dependents who are minor

3    children.

4                Petitioner filed Form 8857, Request for Innocent

5    Spouse Relief, which was received by respondent on or

6    about February 13, 2019.     Respondent issued a Final Notice

7    of Determination to petitioner, dated November 15, 2019,

8    denying relief under section 6015(f).     Petitioner filed a

9    petition with this Court on January 21, 2020, challenging

10   respondent's determination.     Intervenor subsequently filed

11   a Notice of Intervention with this Court on August 3,

12   2020.

13               Petitioner's tax returns filed for the tax years

14   2016, 2017 reflect a filing status of "married filing

15   separate".     Petitioner's tax returns filed for the tax

16   years 2018, 2019, and 2020, reflect a filing status of

17   "single".    Petitioner's returns for 2016 and 2017 were

18   filed untimely, however she received a refund for both of

19   those years.    Petitioner's tax returns for 2018, 2019, and

20   2020 were timely filed.

21   Discussion

22               Generally, married taxpayers may elect to file a

23   joint Federal income tax return.     Section 6013(a).    After

24   making the election, each spouse is jointly and severally

25   liable for the entire tax due.     Section 6013(d)(3).
                                                                7
1    Nevertheless, if certain requirements are met, the

2    requesting spouse may be relieved of joint and several

3    liability under section 6015.

4             Section 6015 provides a spouse with three

5    alternative avenues to relief: (1) full or partial relief

6    under subsection (b); (2) proportionate relief under

7    subsection (c); and (3) if relief is not available under

8    subsections (b) or (c) and taking into account all of the

9    facts and circumstances it would be inequitable to hold

10   the requesting spouse liable for all or a portion of the

11   unpaid tax, equitable relief under subsection (f).

12            Petitioner does not contend that she is entitled

13   to relief under section 6015(b) or (c).   Furthermore,

14   relief is not available to petitioner under section

15   6015(b) or (c) in this case because the amounts due for

16   the years in issue are attributable to underpayments of

17   tax as opposed to understatements of tax or tax

18   deficiencies.

19            We therefore only need to address whether

20   petitioner is entitled to relief under section 6015(f).

21            Section 6015(e)(7) provides that the Court's

22   review of a determination made under that section shall be

23   reviewed de novo and shall be based upon the

24   administrative record established at the time of the

25   determination and any additional newly discovered or
                                                                 8
1    previously unavailable evidence.   Petitioner, the

2    requesting spouse, bears the burden of proving that she is

3    entitled to relief.   Rule 142(a); Porter v. Commissioner,

4    132 T.C. 203, 210 (2009).

5              In Revenue Procedure 2013-34, the Commissioner

6    prescribed a nonexclusive list of factors that are

7    considered in determining whether equitable relief should

8    be granted to a requesting spouse.   Although the Court

9    consults these guidelines when reviewing the

10   Commissioner's denial of relief, see Washington v.

11   Commissioner, 120 T.C. 137, 147-152 (2003), the Court is

12   not bound by them inasmuch as our analysis and

13   determination ultimately turn on an evaluation of all the

14   facts and circumstances.    See Pullins v. Commissioner, 136

15   T.C. 432, 438-439 (2011).

16             Revenue Procedure 2013-34, section 4.01 sets

17   forth threshold conditions that must be satisfied before

18   the Commissioner will consider a request for equitable

19   relief under section 6015(f).   There is no dispute that

20   petitioner satisfies the threshold conditions.   At trial

21   it was established that a portion of the underpayment tax

22   liabilities at issue are attributable to petitioner.

23   Accordingly, we find that relief for petitioner is

24   available only as to the portion of income attributable to

25   intervenor, as provided in in Revenue Procedure 2013-34,
                                                                9
1    section 4.01(7).

2             If a requesting spouse meets the threshold

3    conditions for relief and is not eligible for streamlined

4    relief (as is the case here because petitioner admitted to

5    having knowledge of the underpayments at trial), the

6    Commissioner may grant full or partial equitable relief

7    after considering the following nonexclusive list of

8    factors provided in Rev. Proc. 2013-34, sec. 4.03: (1)

9    whether the requesting spouse was separated or divorced

10   from the nonrequesting spouse when the IRS makes its

11   determination; (2) whether the requesting spouse will

12   suffer any economic hardship if relief is not granted; (3)

13   whether (in an underpayment case) on the date the joint

14   return was filed the requesting spouse did not know and

15   had no reason to know that the nonrequesting spouse would

16   not or could not pay the tax liability; (4) whether the

17   requesting or nonrequesting spouse has a legal obligation

18   to pay the outstanding Federal income tax liability; (5)

19   whether the requesting spouse significantly benefitted

20   from the unpaid income tax liability; (6) whether the

21   requesting spouse has made a good faith effort to comply

22   with Federal income tax laws for the taxable years

23   following the taxable years to which the request for

24   relief relates; and (7) whether the requesting spouse was

25   in poor physical or mental health at the time the returns
                                                             10
1    for which relief is requested were filed, or at the time

2    the requesting spouse requested relief. Any indication of

3    abuse or the exercise of financial control by the

4    nonrequesting spouse is a factor that may impact the other

5    factors.   Revenue Procedure 2013-34, section 4.03(2).

6               In making a determination under section 6015(f),

7    we consider the enumerated factors as well as any other

8    relevant factors.   No single factor is dispositive.     See

9    Pullins v. Commissioner, 136 T.C. at 448.

10              1.    Marital Status

11              Petitioner and intervenor divorced in April

12   2021, which was several years after respondent made his

13   determination.   Therefore, we deem this factor to be

14   neutral.

15              2.    Economic Hardship

16              A requesting spouse will suffer economic

17   hardship if payment in part or all of the tax liability

18   "will cause the requesting spouse to be unable to pay

19   reasonable basic living expenses".   Revenue Procedure

20   2013-34, section 4.03(2)(b); see section 301.6343-

21   1(b)(4)(i), Procedure & Administration Regulations.      The

22   determination as to what constitutes a reasonable amount

23   for basic living expenses may vary with the circumstances

24   of the individual taxpayer but will not include the

25   maintenance of an affluent or luxurious lifestyle.      Id.
                                                            11
1             Petitioner did not present any evidence that she

2    would face economic hardship if she is required to pay any

3    part of the tax liabilities for the years in issue.

4    Accordingly, we find that petitioner would not face

5    economic hardship if she was denied relief, and this

6    factor is therefore neutral.

7             3.   Knowledge or Reason to Know

8             In the case of an underpayment of tax due, this

9    factor turns on whether, as of the date the return was

10   filed or the date the requesting spouse reasonably

11   believed the return was filed, the requesting spouse knew

12   or had reason to know that the nonrequesting spouse would

13   not or could not pay the tax at the time or within a

14   reasonable time after the filing of the return.   Revenue

15   Procedure 2013-34, section 4.03(2)(c)(ii).

16            At trial, petitioner acknowledged that she held

17   check writing authority over both business and personal

18   accounts and handled the payment of business expenses and

19   bills for at least some of the relevant time period.     We

20   therefore conclude that petitioner had knowledge of the

21   underpayment, and this factor weighs against relief.

22            4.   Legal Obligation

23            Petitioner and intervenor's Final Judgment of

24   Dissolution of Marriage and Order on Report and

25   Recommendation of General Magistrate, dated April 6, 2021,
                                                             12
1    does not impose a legal obligation on either petitioner or

2    intervenor to pay outstanding income tax liabilities.

3    Revenue Procedure 2013-34, section 4.03(2)(d).     Therefore,

4    this factor is neutral.

5                5.   Significant Benefit

6                This factor calls for an evaluation of whether

7    the requesting spouse received a significant benefit,

8    beyond normal support, from the underpayment of tax.

9    Revenue Procedure, section 4.03(2)(e).      Normal support is

10   measured by the circumstances of the particular parties.

11   Porter v. Commissioner, 132 T.C. at 212.

12               There is no indication in the record that

13   petitioner lived an extravagant lifestyle during the years

14   in issue.   Although it is likely petitioner received some

15   benefit from the underpayments of tax, we cannot say on

16   the record before us that she received a significant

17   benefit within the meaning of Revenue Procedure 2013-34.

18   Therefore, this factor is neutral.

19               6.   Compliance with Tax Laws

20               Respondent asserts that petitioner has not fully

21   complied with the income tax laws for the years following

22   the tax years in issue.    Petitioner disputes this and

23   asserts that her subsequent tax returns were correctly and

24   timely filed.    The record indicates that petitioner filed

25   her returns for 2016 and 2017 untimely.     Petitioner's
                                                                 13
1    2018, 2019, and 2020 tax returns, however, were timely

2    filed.   Accordingly, we find that petitioner made a good

3    faith effort to comply with Federal income tax laws but

4    she was not in full compliance.    Revenue Procedure 2013-

5    34, section 4.03(2)(f)(iii).    Therefore, this factor is

6    neutral.

7               7.   Mental or Physical Health

8               The record does not establish that petitioner

9    was in poor physical or mental health at any relevant

10   time.    Revenue Procedure 2013-34, section 4.03(2)(g).

11   Considering all the circumstances, this factor is neutral.

12              8.   Abuse

13              Abuse comes in many forms, including efforts to

14   control, intimidate, or undermine the requesting spouse's

15   ability to reason independently and be able to do what is

16   required under Federal tax laws.    Revenue Procedure 2013-

17   34, section 4.03(c)(iv)(g).     All the facts and

18   circumstances are considered in determining whether a

19   requesting spouse was abused.    Id.

20              Petitioner did not allege in her Form 8857 that

21   she was a victim of spousal abuse, domestic violence, or

22   suffering the effects of such abuse during any of the tax

23   years relief is requested or when any of the returns were

24   filed during the years in issue.    Petitioner did, however,

25   allege in her petition that her relationship with
                                                             14
1    intervenor was one of "intimidation and control, a form of

2    abuse".   While the Court takes allegations of abuse

3    seriously, the record does not support a finding that

4    intervenor abused petitioner, nor did any alleged abuse

5    prevent petitioner from complying with Federal tax laws.

6    Conclusion

7              In section 6015(f) cases, we do not simply count

8    the above-mentioned factors.    We evaluate all of the

9    relevant facts and circumstances to reach a conclusion.

10   See Pullins v. Commissioner, 136 T.C. at 448; Revenue

11   Procedure 2013-34, sections 3.05 and 4.03(2).      In

12   evaluating the relevant factors, we conclude that the

13   knowledge factor weighs heavily against relief for

14   petitioner.

15             Given the record before us, we find that it

16   would not be inequitable to deny petitioner spousal relief

17   for the years in issue.     We have considered all of the

18   arguments made by the parties and, to the extent they are

19   not addressed herein, we find them to be moot, irrelevant,

20   or without merit.   To reflect the foregoing, an

21   appropriate decision will be entered for respondent.

22             This concludes the Court's oral findings of fact

23   and opinion in this case.

24             (Whereupon, at 10:30 a.m., the above-entitled

25             matter was concluded.)
                                                               15
1            CERTIFICATE OF TRANSCRIBER AND PROOFREADER

2    CASE NAME:    Ana Margarita Fiengo, Petitioner and Pascuzi

3                  E. Fiengo Sr., Intervenor v. Commissioner

4    DOCKET NO.:   1250-20

5        We, the undersigned, do hereby certify that the

6    foregoing pages, numbers 1 through 15 inclusive, are the

7    true, accurate and complete transcript prepared from the

8    verbal recording made by electronic recording by Donna

9    Boardman on December 17, 2021 before the United States Tax

10   Court at its remote session in Jacksonville, FL, in

11   accordance with the applicable provisions of the current

12   verbatim reporting contract of the Court and have verified

13   the accuracy of the transcript by comparing the

14   typewritten transcript against the verbal recording.

15

16

17

18       _______________________________________________

19       Meribeth Ashley, CET-507                 1/3/22

20       Transcriber                              Date

21

22

23       _______________________________________________

24       Lori Rahtes, CDLT-108                    1/3/22

25       Proofreader                              Date