                        T.C. Memo. 2004-212



                      UNITED STATES TAX COURT



 DELLA H. KNORR, Petitioner, AND DUANE J. KNORR, Intervenor v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7440-01.            Filed September 21, 2004.



     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 section

6015 for review of respondent’s determination that petitioner is

not entitled to relief from joint and several liability for 1990,

1991, 1992, 1993, 1994, and 1995 with respect to joint income tax

returns that she filed with her former husband.   The issue for
                                - 2 -

decision is whether respondent abused respondent’s discretion in

denying petitioner’s request for relief from joint and several

liability under section 6015(f) 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 August 23,

1980.   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 February 1987 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.
                               - 3 -

     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 $5,000 to

$6,000 cash in a safe located in their home; pay a housekeeper

$50 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 February 18, 1997, for $530,000.   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
                                 - 4 -

for 1984 through 1989 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 1984 through 1988 with the Internal

Revenue Service (IRS) on February 14, 1991.    They did not,

however, file a joint income tax return for 1989, and they did

not pay their income tax liability for 1988 in full until

sometime after August 5, 1991.    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 1990
Through 1995

     Petitioner and intervenor did not file their joint income

tax returns for 1990 through 1995 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

1990 through 1995 in the latter part of 1996.    Petitioner was

neither forced nor coerced to sign these returns.
                               - 5 -

     On their joint income tax return for 1990 (1990 return),

petitioner and intervenor reported the following sources of

income and loss:

                Source             Amount of Income (Loss)

     Taxable interest                       $13,484
     Dividends                                4,223
     Net long-term capital loss             (76,107)
     Other losses                              (840)
     Universal Painters                     366,583
     Atrium Homes & Development             (75,492)

Petitioner and intervenor received the dividends that they

reported on the 1990 return from “Founder Funds”.   Petitioner and

intervenor reported taxable income of $277,213, total tax of

$79,916, and an estimated tax penalty of $5,261 for 1990.

Petitioner and intervenor signed the 1990 return on December 14,

1996.   The IRS received the 1990 return on December 18, 1996.

Alex P. Martinez, C.P.A. (Martinez), prepared the 1990 return.

     On their joint income tax return for 1991 (1991 return),

petitioner and intervenor reported the following sources of

income and loss:

                   Source              Amount of Income (Loss)

   Taxable interest                             $2,438
   Long-term capital loss carryover            (73,107)
   Universal Painters                          353,435
   Atrium Homes & Development                 (189,922)

Petitioner and intervenor reported taxable income of $137,141,

total tax of $35,629, and an estimated tax penalty of $2,049 for

1991.   Petitioner and intervenor signed the 1991 return on
                                - 6 -

December 2, 1996.    The IRS received the 1991 return on

December 5, 1996.    Martinez prepared the 1991 return.

     On their joint income tax return for 1992 (1992 return),

petitioner and intervenor reported the following sources of

income and loss:

                   Source               Amount of Income (Loss)

   Taxable interest                                $290
   Dividends                                      5,041
   Net short-term capital gain                    6,243
   Long-term capital loss carryover             (70,107)
   Other losses                                  (5,381)
   Universal Painters                           252,847
   Atrium Homes & Development                   (40,813)

Petitioner and intervenor received the dividends that they

reported on the 1992 return from the following sources:

“Founders Money Market” and “Bedford Money Market”.    Petitioner

and intervenor reported taxable income of $184,961 and total tax

of $50,089 for 1992.    Petitioner and intervenor signed the 1992

return on December 2, 1996.    The IRS received the 1992 return on

December 5, 1996.    Martinez prepared the 1992 return.

     On their joint income tax return for 1993 (1993 return),

petitioner and intervenor reported the following sources of

income and loss:
                               - 7 -

                Source             Amount of Income (Loss)

     Taxable interest                             $38
     Dividends                                  3,751
     Net short-term capital gain                3,835
     Net long-term capital loss               (86,975)
     Universal Painters                       295,667

Petitioner and intervenor received the dividends that they

reported on the 1993 return from the following sources:

“Founders Money Market”, “Oakmark Int’l Fund”, and “Oakmark

Fund”.   Petitioner and intervenor reported taxable income of

$272,051 and total tax of $84,261 for 1993.    Petitioner and

intervenor signed the 1993 return on October 14, 1996.    The IRS

received the 1993 return on October 17, 1996.    Martinez prepared

the 1993 return.

     On their joint income tax return for 1994 (1994 return),

petitioner and intervenor reported the following sources of

income and loss:

                Source             Amount of Income (Loss)

     Taxable interest                             $81
     Dividends                                  7,492
     Net short-term capital gain                1,639
     Net long-term capital loss               (28,524)
     Rental income                             10,600
     Universal Painters                       563,786

Petitioner and intervenor received the dividends that they

reported on the 1994 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”,
                                 - 8 -

“Oakmark ILA Gov’t”, and “FSP--Pacific Basin”.     Petitioner and

intervenor received the rental income that they reported on the

1994 return from two residential properties:     “Sunny Trail

Heights” and “Golden Gates”.   Petitioner and intervenor reported

taxable income of $565,136 and total tax of $200,098 for 1994.

Petitioner and intervenor signed the 1994 return on October 14,

1996.   The IRS received the 1994 return on October 17, 1996.

Martinez prepared the 1994 return.

     On their joint income tax return for 1995 (1995 return),

petitioner and intervenor reported the following sources of

income:

                     Source              Amount of Income

           Net long-term capital gain         $43,365
           Universal Painters                 254,640

A large portion of the net long-term capital gain was

attributable to the redemption of 15,510.497 shares of Founders

Growth Fund, one of the Founders Funds mutual funds jointly owned

by petitioner and intervenor, on December 14, 1995.     This

redemption generated a $65,698 long-term capital gain.

Petitioner and intervenor reported taxable income of $293,619 and

total tax of $87,639 for 1995.    Petitioner and intervenor signed

the 1995 return on October 14, 1996.     The IRS received the 1995

return on October 17, 1996.    Martinez prepared the 1995 return.

     Petitioner and intervenor paid the income tax liabilities

reported on their joint income tax returns for 1990 through 1995
                                - 9 -

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

$500,000.

     After petitioner and intervenor filed their joint income tax

returns for 1990 through 1995, the IRS determined additions to

tax under sections 6651(a)(1), (2), and 6654 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(a)(1)     Sec. 6651(a)(2)   Sec. 6654

      1990       $18,189                $17,904       $5,261
      1991         8,017                  8,907        2,049
      1992        11,153                 10,906        2,132
      1993        18,959                 13,060          –-
      1994        45,022                 19,009        5,306
      1995          –-                    2,464        4,451

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 1990 through 1995.    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 1990

through 1995 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
                                - 10 -

tax and interest would be paid if their request for abatement was

denied.

     On August 7, 1998, the IRS denied petitioner’s and

intervenor’s request for abatement.      As of March 2, 2001, the

additions to tax and interest totaled more than $336,000.        As of

the time of trial on February 2, 2004, the additions to tax and

interest remained unpaid.

Petitioner’s and Intervenor’s Divorce Proceedings

     On April 15, 1998, 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 November 1, 1999.        A

Final Judgment as to Equitable Distribution, Alimony and Child

Support and Visitation (final judgment) was filed on August 15,

2000.     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 1990 through 1995.

     On or about September 11, 2000, intervenor filed an appeal

with respect to the final judgment.      On or about July 10, 2002,

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 February 24,
                               - 11 -

2003.   The amended final judgment awarded petitioner the

following assets:

                       Asset                      Value

        Stonegate residence                     $454,137
        Lot 49 Southport mortgage proceeds        16,321
        Furnishings and jewelry                   62,400

These assets were valued as of April 15, 1998.    In addition, the

amended final judgment (1) awarded petitioner a $73,004 equalizer

payment; (2) awarded petitioner permanent periodic alimony of $1

per year; (3) required intervenor to maintain the payments on

petitioner’s automobile for the 12 months succeeding entry of the

amended final judgment; (4) required intervenor to pay all of the

children’s reasonably necessary medical, dental, ocular,

psychological, and orthodontia expenses; and (5) required

intervenor to pay petitioner $41,633 (and interest thereon) for

previously ordered support.    The equalizer payment and the

previously ordered support were to be paid within 90 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
                                - 12 -

petitioner’s and intervenor’s joint income tax returns for 1990

through 1995.

Petitioner’s Request for Relief From Joint and Several Liability

     On January 22, 1999, the IRS received petitioner’s Form

8857, Request for Innocent Spouse Relief, on which she requested

relief from joint and several liability under section 6015 with

respect to 1990 through 1995.    On March 8, 2001, the IRS sent to

petitioner a Notice of Determination Concerning Your Request for

Relief from Joint and Several Liability under Section 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 Section
          6015(f). Section 6015(f) allows us to provide
          equitable relief when you don’t qualify for relief
          under either Section 6015(b) or 6015(c) 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(b) or sec. 6015(c) is not applicable.
     For sec. 6015(f), 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.
                              - 13 -

Petitioner’s Financial Status as of the Time of Trial

     As of the time of trial on February 2, 2004, intervenor was

paying petitioner approximately $1,520 per month for child

support and an additional $700 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 $300 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 $650,000 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(a).   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(d)(3); Butler v. Commissioner, 114

T.C. 276, 282 (2000).   A spouse (requesting spouse) may, however,

seek relief from joint and several liability by following

procedures established in section 6015.   Sec. 6015(a).

     Under section 6015(a), a requesting spouse may seek relief

from liability under section 6015(b) or, if eligible, may

allocate liability according to the provisions under section

6015(c).   Relief from joint and several liability under section
                                 - 14 -

6015(b) or (c) is premised on the existence of a deficiency for

the year for which relief is sought.      Sec. 6015(b)(1)(D), (c)(1);

see H. Conf. Rept. 105-599, at 252-254 (1998), 1998-3 C.B. 747,

1006-1008.    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

Washington v. Commissioner, 120 T.C. 137, 146-147 (2003); see

also Hopkins v. Commissioner, 121 T.C. 73, 88 (2003); Block v.

Commissioner, 120 T.C. 62, 65-66 (2003); Ewing v. Commissioner,

118 T.C. 494, 497, 498 n.4 (2002); cf. sec. 6015(e)(1).        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 1990 through 1995

rather than from deficiencies for those years.      Accordingly, no

relief is available to petitioner under section 6015(b) or (c).

     If relief is not available under either section 6015(b) or

(c), an individual may seek equitable relief under section

6015(f).     Sec. 6015(f)(2).   Section 6015(f) 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(f)(1).   Equitable relief under

section 6015(f) is granted at the Commissioner’s discretion.

     We review the Commissioner’s determination to deny equitable

relief under section 6015(f) using an abuse of discretion
                              - 15 -

standard.   Butler v. Commissioner, supra at 287-292.    Under this

standard of review, we defer to the Commissioner’s determination

unless it is arbitrary, capricious, or without sound basis in

fact.   Jonson v. Commissioner, 118 T.C. 106, 125 (2002) (citing

Butler v. Commissioner, supra at 292; Pac. First Fed. Sav. Bank

v. Commissioner, 101 T.C. 117, 121 (1993)), affd. 353 F.3d 1181

(10th Cir. 2003).   The question of whether the Commissioner’s

determination was arbitrary, capricious, or without sound basis

in fact is a question of fact.   Cheshire v. Commissioner, 115

T.C. 183, 198 (2000), affd. 282 F.3d 326 (5th Cir. 2002).     We are

not limited to the matters contained in the Commissioner’s

administrative record when deciding this question.      Ewing v.

Commissioner, 122 T.C. 32, 35–44 (2004).   Petitioner bears the

burden of proving that respondent abused respondent’s discretion

in denying her relief under section 6015(f).   Washington v.

Commissioner, supra at 146; Jonson v. Commissioner, supra at 125.

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 section 6015(f) and the relevant factors.

     As directed by section 6015(f), 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 C.B. 756, provided interim guidance for
                                - 16 -

taxpayers seeking equitable relief from joint and several

liability.    Notice 98-61, supra, was superseded by Rev. Proc.

2000-15, 2000-1 C.B. 447, effective January 18, 2000, which, in

turn, was superseded by Rev. Proc. 2003-61, 2003-32 I.R.B. 296,

effective for requests for relief filed on or after November 1,

2003, and for requests for relief pending on November 1, 2003,

for which no preliminary determination had been issued as of that

date.   Rev. Proc. 2003-61, secs. 6 and 7, 2003-32 I.R.B. at 299;

Rev. Proc. 2000-15, secs. 6 and 7, 2000-1 C.B. at 449.

Petitioner’s request for relief and respondent’s determination

are subject to Rev. Proc. 2000-15, 2000-1 C.B. 447, because that

revenue procedure was in effect when respondent evaluated

petitioner’s request and when respondent issued the notice of

determination on March 8, 2001.    See Ewing v. Commissioner, supra

at 44 n.12.    This Court has upheld the use of these procedures in

reviewing a negative determination.      See, e.g., Washington v.

Commissioner, supra at 147-152; Jonson v. Commissioner, supra at

125-126; cf. Ewing v. Commissioner, supra at 45.      (Subsequent

modification of these procedures by Rev. Proc. 2003-61, 2003-32

I.R.B. 296, does not affect our analysis of this case.)

     Rev. Proc. 2000-15, sec. 4.01, 2000-1 C.B. at 448, lists

seven threshold conditions that must be satisfied before the

Commissioner will consider a request for relief under section

6015(f).     Respondent conceded that petitioner has met those seven
                              - 17 -

threshold conditions.   If the threshold conditions are satisfied,

Rev. Proc. 2000-15, sec. 4.02, 2000-1 C.B. at 448, 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 Rev.

Proc. 2000-15, sec. 4.02, 2000-1 C.B. at 448, in cases where the

liability reported on a joint income tax return was unpaid.     See,

e.g., Morello v. Commissioner, T.C. Memo. 2004-181; August v.

Commissioner, T.C. Memo. 2002-201; Collier v. Commissioner, T.C.

Memo. 2002-144; Castle v. Commissioner, T.C. Memo. 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, e.g., Demirjian v. Commissioner, T.C. Memo.

2004-22; Mellen v. Commissioner, T.C. Memo. 2002-280.   In the

instant case, petitioner and intervenor paid the income tax

liabilities reported on their joint income tax returns for 1990

through 1995 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, Rev.

Proc. 2000-15, sec. 4.02, 2000-1 C.B. at 448, is not applicable

here.

     If the requesting spouse satisfies the threshold conditions

of Rev. Proc. 2000-15, sec. 4.01, 2000-1 C.B. at 448, but does
                              - 18 -

not qualify for relief under Rev. Proc. 2000-15, sec. 4.02,

2000-1 C.B. at 448, the Commissioner looks to Rev. Proc. 2000-15,

sec. 4.03, 2000-1 C.B. at 448, to determine whether the taxpayer

should be granted equitable relief.    Rev. Proc. 2000-15,

sec. 4.03, 2000-1 C.B. at 448, 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 section 6015(f).     As Rev. Proc.

2000-15, sec. 4.03, 2000-1 C.B. at 448, 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.

     Rev. Proc. 2000-15, sec. 4.03, 2000-1 C.B. at 448, lists the

following two factors that, if true, the Commissioner weighs in

favor of granting relief and that, if not true, are neutral:

(1) The taxpayer is separated or divorced from the nonrequesting

spouse and (2) 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, Rev. Proc. 2000-15, sec. 4.03, 2000-1 C.B. at

448, lists the following two factors that, if true, the
                              - 19 -

Commissioner weighs against granting relief and that, if not

true, are neutral:   (1) The taxpayer received a significant

benefit from the unpaid liability and (2) 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 1990

through 1995.   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, Rev. Proc. 2000-15, sec. 4.03, 2000-1 C.B. at 448,

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:   (1) The taxpayer

would suffer economic hardship if relief were denied; (2) 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; (3) the liability for which relief is sought is solely

attributable to the nonrequesting spouse; and (4) the

nonrequesting spouse has a legal obligation pursuant to a divorce

decree or agreement to pay the outstanding liability.   The legal
                                - 20 -

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.

Rev. Proc. 2000-15, sec. 4.03(1)(e), (2)(f), 2000-1 C.B. at 449.

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 section 301.6343-1(b)(4), 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,
                               - 21 -

and the amount reasonably necessary for basic living expenses.

See sec. 301.6343-1(b)(4)(ii), 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 February

2003.   As set forth in the amended final judgment, petitioner was

awarded unencumbered assets with a value in excess of $532,000 as

of April 15, 1998, and intervenor was required, inter alia, to

pay to petitioner more than $114,000 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 February 2, 2004, had appreciated to a

value in excess of $650,000.   Moreover, as of the time of trial,

intervenor was paying to petitioner $700 per month to satisfy his

debt to her as well as approximately $1,520 per month for child

support, and petitioner was employed as a personal trainer and

was earning approximately $300 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 $350,000 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
                                - 22 -

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, e.g., Washington v. Commissioner, 120 T.C. at

149-150; Foor v. Commissioner, T.C. Memo. 2004-54; Ferrarese v.

Commissioner, T.C. Memo. 2002-249; August v. Commissioner, T.C.

Memo. 2002-201; Rowe v. Commissioner, T.C. Memo. 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, e.g., Ewing v. Commissioner, 122 T.C.

at 47-48; Hopkins v. Commissioner, 121 T.C. at 88-89; Washington

v. Commissioner, supra at 150-151; Morello v. Commissioner, T.C.

Memo. 2004-181; Keitz v. Commissioner, T.C. Memo. 2004-74;

Foor v. Commissioner, supra; Ogonoski v. Commissioner, T.C. Memo.

2004-52; Wiest v. Commissioner, T.C. Memo. 2003-91; Collier v.

Commissioner, T.C. Memo. 2002-144.
                              - 23 -

     At the times in 1996 that petitioner signed the joint income

tax returns for 1990 through 1995, 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 1990

through 1995.   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 1990 through 1995 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 1990 through 1995.   Furthermore, petitioner has

identified no ground warranting an abatement nor otherwise shown

that it would have been reasonable for her to believe that an
                              - 24 -

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, T.C. Memo.

1985-478; see, e.g., Morello v. Commissioner, supra; Demirjian v.

Commissioner, T.C. Memo. 2004-22; Feldman v. Commissioner, T.C.

Memo. 2003-201; Taylor v. Commissioner, T.C. Memo. 1997-513;

Barnhill v. Commissioner, T.C. Memo. 1996-97; Shannon v.

Commissioner, T.C. Memo. 1991-207; Berry v. Commissioner, T.C.

Memo. 1990-396, affd. without published opinion 935 F.2d 1280

(3d Cir. 1991); Cohen v. Commissioner, T.C. Memo. 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 1990 through 1995 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 secs. 6001,

6011(a), 6012(a)(1), 6072(a), 6151(a).   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
                             - 25 -

income tax liabilities reported on the joint income tax returns

for 1990 through 1995 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 Rev. Proc. 2000-15, sec. 4.03, 2000-1

C.B. at 448, 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

section 6015(f).

     To reflect the foregoing,


                                          Decision will be entered

                                     for respondent.
