                         T.C. Memo. 2011-152



                       UNITED STATES TAX COURT



                  SUSAN G. BELL, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 25055-08.               Filed June 29, 2011.



     John W. Nelson, for petitioner.

     Angela J. Kennedy and Derek W. Kaczmarek, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     CHIECHI, Judge:    Petitioner filed the petition in this case

in response to a so-called final appeals determination (notice of

determination) concerning petitioner’s request for relief from

joint and several liability under section 60151 for her taxable

     1
      All section references are to the Internal Revenue Code in
                                                   (continued...)
                                - 2 -

year 2003.   We must decide whether petitioner is entitled to

relief under that section for that year.      We hold that she is to

the extent stated herein.

                           FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

     At the time petitioner filed the petition in this case, she

resided in Indiana.

     Petitioner, who was born in 1951, completed the eleventh

grade of school, although she took certain courses at a community

college at times not established by the record.     Petitioner does

not have any educational background in business, finance, or

Federal, State, or local tax law.

     Around 1990, petitioner suffered a work-related back injury

(petitioner’s back injury) that resulted in a ruptured spinal

disc and sciatic damage.    During the period 1994 to 1997, peti-

tioner received workers’ compensation with respect to peti-

tioner’s back injury.

     In 1995, petitioner underwent back surgery for petitioner’s

back injury during which metal rods were inserted in her back.

Petitioner continued to receive certain medical treatment for

petitioner’s back injury until 1997.    From around 2003 until the

time of the trial in this case, petitioner did not maintain any


     1
      (...continued)
effect at all relevant times. All Rule references are to the Tax
Court Rules of Practice and Procedure.
                                 - 3 -

health insurance.    Nor had petitioner sought treatment for any

medical condition since 2008 because she was unable to afford any

such treatment.   As of the time of the trial in this case,

petitioner continued to suffer from petitioner’s back injury in

that she was unable to stand, sit, walk, or lie down for long

periods.

     On April 15, 1995, petitioner married Thomas Bell (Mr.

Bell), who was born around 1963.    (We shall sometimes refer

collectively to petitioner and Mr. Bell as the Bells.)       The Bells

do not have any children together.       At no time during their

marriage did Mr. Bell physically abuse petitioner.

     During the Bells’ marriage, petitioner did not maintain any

bank account in her sole name, Mr. Bell maintained a bank account

at Union Planters Bank (Mr. Bell’s personal bank account) in his

sole name, and the Bells did not maintain any bank account in

their joint names.    Although petitioner did not have signatory

authority over Mr. Bell’s personal bank account, she made depos-

its into, and reviewed bank statements of, that account.       Mr.

Bell paid from Mr. Bell’s personal bank account, inter alia, all

of the Bells’ household bills.    During 2003, Mr. Bell wrote

certain checks drawn on Mr. Bell’s personal bank account that

were payable to petitioner and that totaled $13,500.

     Around 1997, the Bells began operating a business (toy

helicopter business) in which they sold toy helicopters at
                                - 4 -

certain air shows, festivals, and similar events around the

country.    For several years, the Bells traveled extensively each

year in operating that business.   Around 2002, petitioner told

Mr. Bell that, because of petitioner’s back injury, she was

unable to travel for the toy helicopter business as she had in

the past.   In 2002, the Bells stopped operating the toy helicop-

ter business.

     On September 27, 2002, Mr. Bell incorporated under the laws

of Indiana Today I Can, Inc. (Today I Can), which was to operate

an Internet sales business and which it did until its dissolution

at a time not established by the record.   At all relevant times,

that corporation was treated for Federal income tax (tax) pur-

poses as an S corporation.

     During the period 2002 to 2004, Mr. Bell and petitioner

owned 51 percent and 49 percent, respectively, of the outstanding

stock of Today I Can.   During that period, Mr. Bell maintained

total control over the operations and activities of that company.

At no time was petitioner authorized to enter into any agreements

or contracts on behalf of Today I Can.

     At all relevant times, Today I Can maintained a bank account

at Union Planters Bank (Today I Can bank account), over which

petitioner did not have signatory authority.   Although only Mr.

Bell had signatory authority over that account, Mr. Bell gave to
                               - 5 -

Kent Shipley (Mr. Shipley), an attorney for Today I Can, a so-

called signature stamp with Mr. Bell’s signature so that Mr.

Shipley was able to use that stamp on certain documents, includ-

ing checks drawn on the Today I Can bank account.

     At all relevant times, including during 2003, petitioner

worked for Today I Can by performing certain administrative and

bookkeeping tasks, including handling certain bills by, for

example, drafting certain checks for Mr. Bell’s signature, making

certain appointments for Mr. Bell, taking certain customer

orders, and providing certain customer service.

     During 2003, Today I Can paid petitioner wages of $24,500

and withheld from those wages tax of $2,320.41.   Today I Can

reported those amounts in Form W-2, Wage and Tax Statement (Form

W-2), that it issued to petitioner for her taxable year 2003.

Petitioner deposited the wages that Today I Can paid her during

2003 into Mr. Bell’s personal bank account.

     During 2003, Today I Can paid Mr. Bell wages of $28,500 and

withheld from those wages tax of $3,527.62.   Today I Can reported

those amounts in Form W-2 that it issued to Mr. Bell for his

taxable year 2003.

     On June 12, 2003, Today I Can filed Form 1120S, U.S. Income

Tax Return for an S Corporation (Form 1120S), for its taxable

period September 27 through December 31, 2002 (2002 Today I Can

return).   In that return, Today I Can reported gross receipts or
                               - 6 -

sales of $778,887, total income of $778,887, total deductions of

$728,125, and ordinary income from trade or business activities

of $50,762.   Today I Can attached to the 2002 Today I Can return

Schedule K-1, Shareholder’s Share of Income, Credits, Deductions,

etc. (Schedule K-1), that it completed with respect to Mr. Bell.

In that schedule, Today I Can reported that Mr. Bell owned 100

percent of its outstanding stock.

     On September 11, 2003, the Bells jointly filed late Form

1040, U.S. Individual Income Tax Return (Form 1040), for their

taxable year 2001 (2001 joint return).   In that return, the Bells

claimed no withholding tax credit and showed tax due of $12,235.

When the Bells filed the 2001 joint return, a check for

$12,719.99 that was drawn on Mr. Bell’s personal bank account was

included with that return.2

     On September 16, 2003, the Bells jointly filed late Form

1040 for their taxable year 2002 (2002 joint return).   In that

return, the Bells claimed no withholding tax credit and showed

tax due of $83,475.   When the Bells filed the 2002 joint return,

a check for $20,000 that was drawn on Mr. Bell’s personal bank

account was included with that return.

     On October 18, November 3, and November 22, 2003, Mr. Bell

sent to the Internal Revenue Service (Service) payments of


     2
      The record does not establish why a check for $12,719.99
was included with the 2001 joint return when that return showed
tax due of only $12,235.
                               - 7 -

$5,522, $15,000, and $279, respectively.   The Service applied

each of those payments against a portion of the Bells’ unpaid tax

for their taxable year 2002.

     On November 22, 2003, the Bells jointly filed late Form 1040

for their taxable year 1999.

     On December 1, 2003, Mr. Bell sent to the Service a payment

of $4,551.17 that the Service applied against a portion of the

Bells’ unpaid liability for their taxable year 2001.3   On Decem-

ber 13, 2003, Mr. Bell sent to the Service a payment of $10,000

that the Service applied against a portion of the Bells’ unpaid

tax for their taxable year 2002.

     On December 25, 2003, the Bells separated, and Mr. Bell

moved from the marital residence in Indiana (marital residence)

to Florida.   At that time, Mr. Bell took the checkbook for the

Today I Can bank account, and petitioner ceased to have access to

that checkbook.

     On January 20, 2004, Mr. Bell sent to the Service a payment

of $549.12 that the Service applied against a portion of the

Bells’ unpaid tax for their taxable year 1999.   On January 31,

2004, Mr. Bell sent to the Service a payment of $1,000 that the


     3
      As discussed above, the Bells filed late the 2001 joint
return and paid late the tax shown due in that return. Although
the record does not establish the Bells’ unpaid liability for
their taxable year 2001, we presume that that liability consisted
of additions to tax for failure to file timely a return for that
taxable year and failure to pay timely the tax shown due in that
return as well as interest thereon as provided by law.
                              - 8 -

Service applied against a portion of the Bells’ unpaid tax for

their taxable year 2002.

     On March 15, 2004, Today I Can filed Form 1120S for its

taxable year 2003 (2003 Today I Can return).   In that return,

Today I Can reported gross receipts or sales of $2,042,913, total

income of $2,040,413, total deductions of $1,833,385, and ordi-

nary income from trade or business activities of $207,028.    Today

I Can attached to the 2003 Today I Can return Schedule K-1 that

it completed with respect to Mr. Bell (2003 Schedule K-1).    In

that schedule, Today I Can reported that Mr. Bell owned 100

percent of its outstanding stock.

     On March 23, 2004, Mr. Bell commenced in the Marion County

Superior Court (Superior Court) a divorce proceeding against

petitioner.

     On March 29, 2004, Mr. Bell sent to the Service a payment of

$4,000 that the Service applied against a portion of the Bells’

unpaid tax for their taxable year 2002.   After the Service

applied that payment against that unpaid tax, the Bells’ remain-

ing unpaid tax for their taxable year 2002, including certain

penalties and interest, totaled approximately $40,500.

     On July 10, 2004, petitioner and Mr. Bell executed and filed

with the Superior Court a property settlement agreement (property

agreement) in which the Bells agreed to settle all of their

respective rights to property arising out of their marriage.
                                  - 9 -

Pursuant to the property agreement, petitioner was to receive a

Ford Expedition automobile (Ford Expedition) that was then in her

possession and was to have exclusive possession of the marital

residence and to make all payments on the mortgage loan with

respect to that residence.      The property agreement also provided:

     4.       Today I Can, Inc.: Husband [Mr. Bell] shall re-
              tain all interest in the business, Today I Can,
              Inc. Wife [petitioner] agrees to sell any and all
              shares she owns in Today I Can, Inc. back to Today
              I Can, Inc. She will be paid ONE MILLION DOLLARS
              ($1,000,000.00) according to the Promissory Note
              that is attached hereto and incorporated herein as
              Exhibit “A”.[4] Wife agrees that this will be in
              complete satisfaction of any and [all] claims she
              has to either Husband’s interest in Today I Can,
              Inc. and/or her individual interest in Today I
              Can, Inc.

          *         *       *       *       *       *       *

     6.       Tax Liability and General Indemnification: Hus-
              band specifically agrees to indemnify and hold
              Wife harmless from any federal or state tax lia-
              bility arising out of actions or omissions during
              their marriage and/or arising out of actions or
              omissions related to Today I Can, Inc., including
              the cost of Wife’s defense and attorney’s fees or,
              at Wife’s option, the assumption of her defense.
              * * *

          *         *       *       *       *       *       *

     8.       Knowledge and Disclosure: Each party acknowledges
              that they understand he or she is entitled to
              thorough discovery, analysis, and investigation of
              the other party’s financial information and all
              data and facts relevant to the dissolution pro-
              ceeding. Each party certifies that he or she has


     4
      As discussed below, for reasons not established by the
record, Mr. Bell signed the promissory note for $1 million before
he and petitioner executed and signed the property agreement.
                               - 10 -

            full and adequate knowledge of all such relevant
            financial information, data, and facts in order to
            make a knowing, and voluntary decision to sign
            this Agreement at this time.

     On August 19, 2004, the Superior Court approved the property

agreement and entered a decree of divorce dissolving the Bells’

marriage.

     On June 11, 2004, Mr. Bell executed an installment promis-

sory note (2004 installment note) in the amount of $1 million

that was payable to petitioner.    That note was the note to which

paragraph 4 of the property agreement (quoted above) referred.

The 2004 installment note, which did not bear interest, provided

that Mr. Bell was to make payments to petitioner on that note as

follows:

     Upon the 5th day of August 2004 and then the 5th day of
     each month thereafter until paid in full, monthly
     payments in the amount of Ten Thousand Dollars
     ($10,000.00) or until the expiration of 9 years from
     the effective date, whichever occurs earlier.

The 2004 installment note also provided that if Mr. Bell were to

fail to make any payment within ten days of the date on which

that payment was due, he would be in default and any delinquent

payment would accrue interest at the rate of 5 percent per year

until paid.    As of April 2, 2008, Mr. Bell had not made any

payments under the 2004 installment note.

     On July 29, 2004, the Bells jointly filed late respective

Forms 1040 for their taxable years 1997, 1998, 2000 (2000 joint

return), and 2003 (2003 joint return).    In the 2000 joint return,
                              - 11 -

the Bells claimed no withholding tax credit and showed tax due of

$6,690.   When the Bells filed that return, a check for $1,000

that was drawn on Mr. Bell’s personal bank account was included

with that return.

     In the 2003 joint return that the Bells filed jointly on

July 29, 2004, the Bells reported, inter alia, (1) wages of

$53,000,5 (2) net business income of $2,195 from certain work Mr.

Bell performed on behalf of Today I Can, (3) net income of

$187,2346 from Today I Can, (4) adjusted gross income of

$242,274, and (5) taxable income of $222,496.   In that return,

the Bells (1) showed tax of $54,869 and self-employment tax of

$310, (2) claimed a withholding tax credit of $5,848,7 and

(3) showed tax due of $50,587.8   The Bells did not attach to the




     5
      The wages of $53,000 that the Bells reported in the 2003
joint return consisted of the $24,500 and the $28,500 that Today
I Can paid petitioner and Mr. Bell, respectively, during 2003.
     6
      The net income of $187,234 from Today I Can that the Bells
reported in the 2003 joint return consisted of the difference
between ordinary income from trade or business activities of
$207,028 and a deduction under sec. 179 of $19,794.
     7
      The $5,848 withholding tax credit that the Bells claimed in
the 2003 joint return consisted of $2,320.41 and $3,527.62,
respectively, that Today I Can withheld from the respective wages
that it paid petitioner and Mr. Bell during 2003. We note that
the Bells rounded to the nearest dollar the amount of the with-
holding tax credit that they claimed in the 2003 joint return.
     8
      The tax due shown in the 2003 joint return included an
estimated tax penalty of $1,256.
                              - 12 -

2003 joint return the 2003 Schedule K-1.   When the Bells filed

that return, no payment was included.

     On March 15, 2005, Today I Can filed Form 1120S for its

taxable year 2004 (2004 Today I Can return).   In that return,

Today I Can reported gross receipts or sales of $2,103,124, total

income of $2,106,344, total deductions of $2,078,880, and ordi-

nary business income of $27,464.   Today I Can attached to the

2004 Today I Can return respective Schedules K-1 that it com-

pleted with respect to petitioner and Mr. Bell.   In those sched-

ules, Today I Can reported that petitioner and Mr. Bell owned 21

percent and 79 percent, respectively, of its outstanding stock.

     After August 19, 2004, the date on which the Superior Court

entered the decree of divorce dissolving the Bells’ marriage,

petitioner and Mr. Bell continued to operate an Internet sales

business.   Petitioner continued that business with Mr. Bell

because (1) she did not have any other source of income and

(2) Mr. Bell maintained the business contacts and relationships

necessary for that business to succeed.

     Around 2006, petitioner and Mr. Bell started a company known

as Earn and Learn which operated an Internet sales business

substantially identical to the business that Today I Can had

operated.   Earn and Learn was dissolved around 2008.   Petitioner

has not been employed since Earn and Learn was dissolved in 2008.
                               - 13 -

       On July 26, 2007, petitioner filed Form 8857, Request for

Innocent Spouse Relief (Form 8857), with respect to her taxable

year 2003.    Petitioner included with that form Form 12510,

Questionnaire for Requesting Spouse (Form 12510).    In Form 12510,

petitioner claimed (1) that she did not review the 2003 joint

return before signing it, (2) that she first became aware of the

unpaid tax for her taxable year 2003 “When the IRS contacted me

for an audit”, and (3) that Mr. Bell verbally and mentally abused

her.

       In petitioner’s Form 12510, petitioner claimed total monthly

income of $7,899 consisting of monthly wages of $2,249 and

monthly self-employment income of $5,650.    In that form, peti-

tioner claimed total monthly expenses of $5,356 consisting of:

                  Claimed Monthly Expenses           Amount
        Federal, State, and local taxes              $2,249
        Rent or mortgage                              1,123
        Food                                            300
        Utilities                                       400
        Telephone                                       300
        Car (including insurance and gasoline
          and repairs)                                   384
        Medical expenses                                 350
        Clothing                                         250
          Total                                        5,356

       On September 10, 2007, petitioner filed timely Form 1040 for

her taxable year 2006 (2006 return).    In that return, petitioner

reported, inter alia, adjusted gross income of $246,865 and
                              - 14 -

taxable income of $233,172.   In the 2006 return, petitioner

showed total tax of $63,538 and tax due of $59,668.    When she

filed that return, petitioner included a payment of $59,668.

     On October 8, 2007, respondent sent to petitioner a statu-

tory notice of balance due with respect to certain additions to

tax and interest totaling $3,824.94 that respondent had assessed

for petitioner’s taxable year 2006.    On October 9, 2007, peti-

tioner sent to the Service a payment of $3,824.94.

     An examiner working for the Service (respondent’s examiner)

prepared an examination workpaper dated November 2, 2007 (exami-

nation workpaper) with respect to petitioner’s request for relief

under section 6015 for her taxable year 2003.    In that workpaper,

respondent’s examiner concluded that petitioner is not entitled

to relief under that section for any portion of the underpayment

for that year.   The examination workpaper stated, inter alia:

                        GENERAL INFORMATION

     2003/UP [underpayment]/denied relief - no hardship -
     has ability to make payments - considered abuse (how-
     ever not a strong factor for granting relief) - consid-
     ered health issues (RS has ability to work & pay tax
     based on 2006 return) - part attributable to NES [non-
     electing spouse] - knew NES has a history of not paying
     tax - no belief - owes on prior joint returns - helped
     with business - drafted checks for business - received
     benefit through the divorce.

        *        *      *       *        *       *       *
                        - 15 -

                  EVALUATION PROCESS

     Year 2003
                      IRC 6015(f)
Liability arose on or after July 22, 1998
Joint return is valid
There is enough information to determine the claim
No OIC accepted

Eligibility factors:
Underpayment of tax - relief is not available under IRC
6015(b) & 6015(c)
Filed a joint return
Claim filed timely
Liability unpaid, or RS [requesting spouse] may have
refundable payments
Not a fraudulent return
No fraudulent transfer of assets
No disqualified assets transferred
The underpaid tax is not solely attributable to the NRS
[nonrequesting spouse]
Attribution:   NES = 46,733.00
               RS = 2,598.00
Partial attribution to the NRS. Continue evaluating
for the portion attributable to the NRS. Deny relief
for the portion attributable to the RS.

Tier I factors (limited scope):
Taxpayers are currently divorced, widowed, legally
separated, or they had been members of separate house-
holds prior to the claim for at least 12 consecutive
months
Can’t prove a belief that tax was to be paid
Explanation:   History of filing returns late with
               balance dues [sic] - owes on prior joint
               returns - when return was filed - did
               not have access to NES’ ability to pay

        Tier I factors (limited scope) not met

Tier II factors:
Taxpayers are currently divorced, widowed,          For
legally separated, or they had been members of
separate households prior to the claim for at
least 12 consecutive months
No economic hardship                            Against
Explanation:   Per Form 12510 - has ability to make
                               - 16 -

                    payments - received 1,000,000.00 in 2004
                    for her shares for NES’ business
     Marital abuse                                      For[9]
     Explanation:   States mental & verbal abuse (not con-
                    sidered strong factor for granting re-
                    lief) - RS worked for NES’ business
     Poor mental or physical health
     For[10]
     Explanation:   RS has back trouble & depression - how-
                    ever RS is [sic] ability to work
     NRS has legal obligation                             For
     Legal Obligation: Per divorce decree NES is to pay tax

        Knowledge:
        Background:
           RS - High school - culinary    NRS - Tenth grade
                school
        Involvement:
           RS - States no joint           NRS -
                accounts - states she
                reviewed statements -
                worked for business -
                clerical/administrative
                work - includes review-
                ing bills & drafting
                checks for NES’ signa-
                ture
        Lifestyle changes:     Not indicated
        NRS’s elusiveness:     Did not ask questions
        Duty to inquire:       Did not review return
        Living arrangements: Separated 12/25/03
     RS had no knowledge and no reason to know          For[11]
     Explanation:    History of filing late returns with
                     balance due - owes on prior year joint
                     returns - when return filed - did not
                     have access to NES’ ability to pay


     9
      An individual not identified in the record struck by hand
the typewritten word “For” in the examination workpaper.
     10
      An individual not identified in the record struck by hand
the typewritten word “For” in the examination workpaper.
     11
      An individual not identified in the record struck by hand
the typewritten word “For” in the examination workpaper and
inserted by hand the word “Against” immediately above it.
                              - 17 -

     RS gained benefit                                Against
     Explanation:   Received 1,000,000.00 for her shares of
                    business - received marital home through
                    divorce
     Made a good faith effort to comply with the tax      For
     laws
     Explanation:   All future returns filed & paid - made
                    estimated payment on 2007
     Unique circumstances: Although RS states health issues
                            - RS still has ability to earn
                            wages to pay taxes
     Not meeting Tier II factors - deny claim
     Tier II consideration:    Based on the above facts it is
                               equitable to hold the RS lia-
                               ble for the balance.

                   Tier II factors not met - deny
            Claim denied under IRC 6015(f) - full scope

                            CONCLUSION

     2003 - Denied under 6015(f)

     On November 14, 2007, respondent issued to petitioner a

preliminary determination with respect to her request for relief

under section 6015 for her taxable year 2003.   In that letter,

respondent determined that petitioner is not entitled to that

relief because “you [petitioner] did not show it would be unfair

to hold you responsible.   You did not prove, that at the time you

signed the return, you had reason to believe the tax would be

paid.   Also, the documentation you provided does not prove

economic hardship.”

     Around November 27, 2007, Mr. Bell commenced a bankruptcy

proceeding in the U.S. Bankruptcy Court for the Middle District

of Florida (Bankruptcy Court).   On April 2, 2008, petitioner

filed in the Bankruptcy Court an adversary complaint (peti-
                             - 18 -

tioner’s bankruptcy complaint) in that proceeding.       In that

complaint, petitioner alleged that Mr. Bell’s obligations under

(1) the 2004 installment note and (2) the indemnification con-

tained in paragraph 6 of the property agreement were

nondischargeable in bankruptcy.       In petitioner’s bankruptcy

complaint, petitioner alleged, inter alia:

          5.   During the period from approximately 2000
     through 2004, while still married, Debtor [Mr. Bell]
     and Sue [petitioner] were partners in a business called
     Today I Can, Inc. (“TIC”) whose primary purpose was
     internet sales/e-commerce. Further, TIC was organized
     under the laws of the State of Indiana.

          6.   The ownership structure of TIC was 51-49%,
     with Debtor holding the majority interest and Sue
     holding the minority interest.

        *       *       *         *         *       *       *

          22. Prior to the filing of the instant bank-
     ruptcy, Sue had instituted post-dissolution legal
     proceedings in Indiana (Marion County) against Debtor
     for the purpose of collecting on the Note and that said
     proceedings were then-pending at the time of the filing
     of this bankruptcy. Moreover, during the last half of
     2007, Debtor had appeared in Indiana twice for hearings
     on said legal matter and that further hearings were
     scheduled.

          23. Nevertheless, Debtor failed to disclose said
     litigation as required under question no. 4 of his
     Statement of Financial Affairs.

     On April 30, 2008, Mr. Bell filed in the Bankruptcy Court an

answer to petitioner’s bankruptcy complaint.       In that answer, Mr.

Bell admitted the allegations that petitioner made in paragraphs

5, 6, 22, and 23 of that complaint (quoted above).
                                - 19 -

     Around early 2008, respondent assigned petitioner’s request

for relief under section 6015 to an officer (respondent’s Appeals

officer) in respondent’s Appeals Office.      After considering

petitioner’s request for relief, respondent’s Appeals officer

prepared an appeals case memorandum dated June 27, 2008 (appeals

memorandum).   In that memorandum, respondent’s Appeals officer

concluded that petitioner is not entitled to relief under section

6015 for her taxable year 2003.    The appeals memorandum stated in

pertinent part:

                      SUMMARY AND RECOMMENDATION

     Is the taxpayer entitled to relief from liability under
     §6015(f)? There are hazards for both sides so an offer
     was presented to the taxpayer, but she has ignored the
     offer. She has not countered with an offer of her own,
     either. Accordingly, the examiner’s position will be
     sustained.

                           BRIEF BACKGROUND

     Taxpayer filed a joint income tax return with her
     spouse for tax year 2003 on or about July 29, 2004. An
     underpayment was reported on the form 1040 in the
     amount of $50,587. Additional penalties and interest
     were assessed because the tax return was filed after
     the due date of April 15, 2004.

     The taxpayer and her former spouse were equal partners
     in a corporation and both earned wages during 2003. He
     had an additional sole proprietorship during the year.
     After allocating the tax liability, her former spouse’s
     share of the unpaid tax was $24,961.

                       DISCUSSION AND ANALYSIS

        *         *       *       *       *         *       *

     The taxpayer cites O’Neill v. CIR (TC Memo 2004-183)
     and discusses 6 factors that favor her in the determi-
                                - 20 -

    nation that she should be granted innocent spouse
    relief under §6015(f).[12] The factors discussed by the
    Court are listed below with the taxpayer’s position on
    each factor explained.

          1. Marital Status
             The couple was divorced August 2005.

          2. Economic Hardship
             The taxpayer completed form 12510 and calculated
             her current monthly household income and expenses.
             She has about $2500 available income each month.
             She did not receive the $1 million divorce settle-
             ment from her former spouse. He has listed this
             as an outstanding debt on his bankruptcy filings.

          3. Abuse
             The taxpayer completed form 12510 and stated that
             she was the victim of mental and verbal abuse.
             The divorce decree does not give a reason for the
             marital troubles; it only accepts the property
             settlement and grants the dissolution.

          4. Knowledge
             The taxpayer was aware of their income tax liabil-
             ity. She knew that they had not filed income tax
             returns for several years and were attempting to
             become current during 2003 and 2004 calendar
             years. Many of these returns were filed late and
             with balances due. They have outstanding liabili-
             ties in excess of $40,000 from their 2000 and 2002
             tax returns.




     12
      We note that in O’Neill v. Commissioner, T.C. Memo. 2004-
183, we analyzed the taxpayer’s request for relief under sec.
6015(f) under the factors set forth in Rev. Proc. 2000-15, 2000-1
C.B. 447 (Revenue Procedure 2000-15). We also note that Rev.
Proc. 2003-61, 2003-2 C.B. 296 (Revenue Procedure 2003-61),
superseded Revenue Procedure 2000-15. Revenue Procedure 2003-61
is effective for requests for relief under sec. 6015(f) that were
filed on or after Nov. 1, 2003. Id. sec. 7, 2003-2 C.B. at 299.
Revenue Procedure 2003-61 is applicable in the instant case
because petitioner filed her request for innocent spouse relief
on July 26, 2007.
                        - 21 -

  5. Divorce decree
     The property settlement states that the former
     spouse will hold the taxpayer harmless from any
     federal tax liability arising during their mar-
     riage. The couple had filed the 2003 form 1040
     about 1 year prior to the divorce being granted.
     She must have been aware that he had not paid the
     tax liabilities for that statement to be included
     in the decree.

  6. Tax Liability
     The taxpayer believes that all of the income re-
     ported on the 2003 tax return belongs to her for-
     mer spouse. The taxpayer reported wages earned
     during 2003 and listed her occupation as a busi-
     ness owner. At least some of the wages reported
     as income on the tax return belonged to the tax-
     payer. The property settlement along with the
     taxpayer’s occupation on the 2003 tax return indi-
     cates that she was involved in the business. She
     was identified as a 50% owner of the company.

  7. Significant Benefit
     The taxpayer was granted a $1 million property
     settlement for her share of the corporation, title
     to the Ford Expedition (listed as a corporate
     asset), and sole title to the couple’s personal
     residence. She lived with her former spouse until
     Christmas Day 2003.

  8. Current Status
     The taxpayer has filed her 2004-2006 tax returns.
     There are no outstanding liabilities at this time.
     She made estimated payments for the 2007 tax year.

The first factor is neutral or favors the Government
because the couple were married and living together all
but 1 week of 2003. They were separated while the tax
return was prepared and at the time it was filed with
the Service.

The second factor is neutral or favors the Government
because the taxpayer has sufficient net income each
month to pay some of the liabilities.

The third factor is neutral. There isn’t any evidence
of abuse during the marriage. The divorce decree is
silent on this topic.
                              - 22 -

     The seventh factor is neutral. Neither individual
     received a significant benefit during the marriage from
     the unpaid taxes. Both enjoyed the same lifestyle.

     The 6th factor favors the Government because the busi-
     ness was owned by both individuals equally. The tax-
     payer was granted a large settlement for her share of
     the business at the time of the divorce. The income
     reported by the corporation should be split between
     them.

     The fourth factor favors the Government because the
     taxpayer was aware that the couple had unpaid liabili-
     ties at the time she signed the 2003 form 1040. She
     was aware that there were amounts owed on that return
     along with others that had been filed within the last
     year.

     The fifth factor favors the taxpayer because the decree
     holds the former spouse liable for taxes owed during
     the marriage. He agreed to be responsible for the
     unpaid taxes. Whether or not the taxpayer believed
     this to be true, this is not known.

     The eighth factor favors the taxpayer. She has been
     current in filing and paying her tax liabilities since
     the couple separated.

     3 out of 8 factors favor the taxpayer while 2 are
     considered neutral. This would allow the taxpayer 5
     out of 8 factors on her side, or 60% concession by the
     Government.

                           MY EVALUATION

     I believe that there are hazards of litigating this
     issue for both sides. There are factors that favor the
     taxpayer and others that favor the Government. Al-
     though an offer was presented to the taxpayer, she has
     refused it and decided not to counter it with an offer
     of her own. I recommend that the examiner’s position
     should be sustained in full.

     On July 11, 2008, respondent issued to petitioner the notice

of determination.   In that notice, respondent denied petitioner’s

request for relief under section 6015 for her taxable year 2003.
                              - 23 -

The notice of determination stated in pertinent part:   “The

information we have available does not show you meet the require-

ments for relief.”

     On October 20, 2008, petitioner filed Form 1040 for her

taxable year 2007 (2007 return).13   In that return, petitioner

reported adjusted gross income of $133,361 and taxable income of

$103,191.   In the 2007 return, petitioner showed total tax of

$26,644 and claimed (1) a withholding tax credit of $13,847,

(2) estimated tax payments totaling $22,500, and (3) a refund of

approximately $9,700.   On November 17, 2008, respondent

(1) assessed against petitioner an estimated tax penalty of

$136.03 with respect to her taxable year 2007 and (2) issued to

her a refund of $9,566.97 with respect to that year.

     In May 2009, petitioner moved from the marital residence to

live with her older sister in Idaho.   Petitioner made that move

because she could no longer afford to live in Indiana and re-

quired assistance from family members who lived in Idaho.   From

at least May 2009 until the time of the trial in this case,

petitioner’s sister, who was suffering from certain medical

conditions including type II diabetes, back injuries, severe

asthma, and severe arthritis, was unemployed and was receiving




     13
      Petitioner received an extension of time within which to
file the 2007 return to and including Oct. 15, 2008.
                               - 24 -

Social Security disability payments.14   At the time of the trial

in this case, petitioner’s sister contributed $600 monthly toward

the household expenses of petitioner and herself.

     At the time petitioner moved to Idaho in May 2009, she

informed Wells Fargo Bank, N.A. (Wells Fargo), the trustee for

the holders of the mortgage loan with respect to the marital

residence, that she was unable to make further payments on that

mortgage loan and that she would surrender possession of that

residence.   Around November 18, 2009, Wells Fargo instituted a

foreclosure proceeding against petitioner in the Hamilton Supe-

rior Court and filed a document in that court entitled “AMENDED

COMPLAINT ON NOTE AND FOR FORECLOSURE OF MORTGAGE” with respect

to the marital residence.

     On November 30, 2009, petitioner and Mr. Bell entered into

a settlement agreement and release (bankruptcy settlement) with

respect to the claims that petitioner had made in petitioner’s

bankruptcy complaint, which the Bankruptcy Court approved on

November 30, 2009.15   That settlement provided in pertinent part:

          1.   On August 19, 2004, Susan [petitioner] and
     Thomas [Mr. Bell] were granted a divorce under the laws
     of the State of Indiana (the “divorce”). Pursuant to


     14
      As of the time of the trial in this case, petitioner had
applied for Social Security disability benefits but had not
received any response as to whether she qualified for such
benefits.
     15
      Mr. Bell and petitioner executed the bankruptcy settlement
on Sept. 14 and Oct. 5, 2009, respectively.
                                - 25 -

    the divorce, Susan and Thomas entered into a Property
    Settlement Agreement (the “PSA”) which outlined their
    rights and obligations with respect to property, income
    and assets related to their marriage. This Agreement
    hereby incorporates said PSA by reference, including a
    certain $1,000,000.00 promissory note dated June 11,
    2004 (the “Note”).

         *        *       *       *       *       *       *

         8.   Scope of Agreement. The Parties hereby agree
    that this Agreement is intended to address Thomas’
    liability with respect to the PSA, specifically includ-
    ing the Note and all federal and/or state tax liability
    with respect to a certain internet business in which
    Thomas and Susan were partners during their marriage,
    namely, Today I Can, Inc. (“TIC”).

         9.   Payment terms. Subject to the satisfaction
    of the contingencies set forth under paragraph seven
    (7) above,[16] the Parties hereby agree that Thomas
    shall pay Susan the total sum of Three Hundred Twenty
    Five Thousand Dollars and no cents ($325,000.00) (here-
    inafter the “Settlement Amount”) in full accord and
    satisfaction of his obligations under the Note. Sub-
    ject to the “Method of Payment” set forth under para-
    graph (10) below, Thomas hereby agrees to pay the
    Settlement Amount as follows:

             (a) A lump sum payment of Ten Thousand Dollars
             ($10,000.00) to be paid not later than October 5,
             2009; and

             (b) Commencing on November 5, 2009, Thomas shall
             pay Susan the sum of Four Thousand Two Hundred
             Fifty Dollars ($4,250.00) per month for twelve
             (12) consecutive monthly installment payments
             ($51,000.00 total), and

             (c) Commencing on November 5, 2010, Thomas shall
             pay Susan the sum of Three Thousand Dollars
             ($3,000.00) per month for eighty-eight (88) con-
             secutive monthly installment payments ($264,000.00
             total).

    16
      The contingencies set forth in par. 7 of the bankruptcy
settlement were satisfied.
                          - 26 -

     The aggregate total of the payments described
under paragraphs 9(a), (b) and (c) above amount to the
Settlement Amount of Three Hundred Twenty Five Thousand
Dollars ($325,000.00). The last such payment of the
Settlement Amount shall be due and owing on February 5,
2018. All payments shall be due on the fifth day of
each month.

The Parties agree Thomas is solely responsible for the
payments set forth under this paragraph.

     10. Method of Payment. The payments due under
paragraph nine shall be made as follows:

       (a) The lump-sum payment of $10,000.00, due    Octo-
       ber 5, 2009, shall be made payable to “Susan   G.
       Bell and John Nelson” and shall be mailed to   the
       following address: John W. Nelson, Esquire,    * * *
       and

       (b) The first seven payments of $4,250.00, which
       commence on November 5, 2009, shall be made pay-
       able to “Susan G. Bell and John Nelson,” and shall
       be mailed to the following address: John W. Nel-
       son, Esquire, * * * and

       (c) The remaining five payments of $4,250 as well
       as all payments of $3,000.00 shall be made payable
       to “Susan G. Bell” and shall be mailed to Susan at
       an address to be provided to Thomas at least thir-
       ty (30) days prior to the commencement of the
       first such payment. * * *

   *         *       *       *       *       *        *

     11. Taxes. Thomas agrees that he shall remain
subject to all tax liability related to TIC as set
forth under the PSA. Further, Thomas agrees to indem-
nify Susan for any TIC related tax liability that is
ultimately assessed against her. As such, Thomas
hereby ratifies and reaffirms all TIC tax indemnifica-
tion provisions as set forth under the PSA.

     12. Default. The Parties agree that in the event
Thomas fails to fully satisfy his obligations under
this Agreement, he shall be in default of this Agree-
ment. The Parties hereby agree that the occurence of
any of the following shall constitute an event of
                                - 27 -

       default: (a) Thomas’ failure to make any payment due
       under this Agreement by the due date scheduled for any
       such payment, as set forth under paragraph nine above;
       (b) Thomas’ failure to timely indemnify Susan for any
       tax payments made by Susan relating to TIC, as de-
       scribed under the PSA, as set forth under paragraph ten
       above * * * and (c) payment of any amount less than the
       scheduled amount. In the event Thomas is in default
       with respect to any payment scheduled hereunder, he
       shall have ten (10) calendar days following the appli-
       cable due date in which to cure such default, provided
       that Susan is in receipt of any such payment not later
       than 12:00 midnight on the tenth calendar day following
       the due date. In the event of default and/or failure
       to timely cure such default, the terms of this Agree-
       ment shall become null and void and the terms of the
       Note shall revive and be of full legal force and ef-
       fect.

       From around October 2009 through around January 2010, Mr.

Bell paid petitioner $19,500 pursuant to the bankruptcy settle-

ment.    Of that $19,500, petitioner used $9,000 to pay her attor-

ney.    From around February 2010 to the time of the trial in this

case, Mr. Bell did not make any monthly payments pursuant to the

bankruptcy settlement.    As of the time of that trial, petitioner

had not initiated any legal action to enforce the terms of the

bankruptcy settlement; nor had she taken any legal action to

enforce the terms of the 2004 installment note, which she had the

right to do under the bankruptcy settlement in the event Mr. Bell

defaulted on that settlement.

       As of April 19, 2010, the Bells owed a balance of $11,963.39

with respect to their taxable year 2000.    As of that date, the

Bells owed a balance of $36,895.25 with respect to their taxable

year 2002.
                                 - 28 -

        At the time of the trial in this case, petitioner, who

remained unemployed, was still residing in Idaho with her older

sister.      From the time petitioner moved to Idaho in May 2009

until the time of that trial, the only funds that petitioner had

available on which to live were the payments that Mr. Bell had

made pursuant to the bankruptcy settlement from October 2009 to

January 2010 totaling $19,500 and certain savings, the amount of

which is not established by the record.17     At the time of the

trial, petitioner’s savings had been reduced to approximately

$100.

     At the time of the trial in this case, petitioner’s monthly

expenses included expenses for (1) rent of $875, (2) utilities,

including electric, gas, telephone, water, and trash, of $425,

and (3) food of $350.     At that time, petitioner had certain

outstanding bills in amounts not established by the record for

medical care that had been provided to her before 2008.

                                 OPINION

     The parties’ only dispute is whether petitioner is entitled

to relief under section 6015(f) for her taxable year 2003.18

Petitioner bears the burden of proving that she is entitled to


        17
      As discussed above, at the time of the trial in this case,
petitioner’s sister was receiving Social Security disability
benefits and was contributing $600 monthly toward the household
expenses of petitioner and herself.
        18
      Petitioner does not dispute that she is not entitled to
relief under sec. 6015(b) or (c) for her taxable year 2003.
                              - 29 -

such relief.   See Rule 142(a); Jonson v. Commissioner, 118 T.C.

106, 113 (2002), affd. 353 F.3d 1181 (10th Cir. 2003).

     Section 6015(f) provides:

     SEC. 6015.   RELIEF FROM JOINT AND SEVERAL LIABILITY ON
                  JOINT RETURN.

          (f) Equitable Relief.–-Under procedures pre-
     scribed by the Secretary, if--

               (1) taking into account all the facts and
          circumstances, it is inequitable to hold the indi-
          vidual liable for any unpaid tax or any deficiency
          (or any portion of either); and

               (2) relief is not available to such individ-
          ual under subsection (b) or (c), the Secretary may
          relieve such individual of such liability.

     As directed by section 6015(f), the Commissioner of Internal

Revenue (Commissioner) has prescribed procedures in Revenue

Procedure 2003-61 that are to be used in determining whether it

would be inequitable to find the requesting spouse liable for

part or all of the underpayment of tax.   Section 4.01 of that

revenue procedure lists the following threshold conditions

(threshold conditions) which must be satisfied before the Commis-

sioner will consider a request for relief under section 6015(f):

(1) The requesting spouse filed a joint tax return for the

taxable year for which such spouse seeks relief; (2) relief is

not available to the requesting spouse under section 6015(b) or

(c); (3) the requesting spouse applies for relief no later than

two years after the date of the Service’s first collection

activity after July 22, 1998, with respect to the requesting
                             - 30 -

spouse; (4) no assets were transferred between the spouses as

part of a fraudulent scheme by the spouses; (5) the nonrequesting

spouse did not transfer disqualified assets to the requesting

spouse; (6) the requesting spouse did not file or fail to file

the tax return in question with fraudulent intent; and (7) the

income tax liability from which the requesting spouse seeks

relief is attributable to an item of the nonrequesting spouse.

Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297.

     Respondent argues that petitioner has failed to satisfy the

threshold condition in section 4.01(7) of Revenue Procedure 2003-

61 with respect to the respective portions of the underpayment

for her taxable year 2003 that are attributable to (1) 49 percent

of the net income of $187,234 from Today I Can that the Bells

reported in the 2003 joint return and (2) petitioner’s wages of

$24,500 that the Bells reported in that return.   Petitioner

disagrees and argues that she satisfies all of the threshold

conditions with respect to the entire underpayment for her

taxable year 2003.

     With respect to the net income of $187,234 from Today I Can

(2003 Today I Can net income) that the Bells reported in the 2003

joint return, respondent contends that 49 percent of that income

is attributable to petitioner because during 2003 petitioner

owned 49 percent of the stock of Today I Can.   In support of that

contention, respondent relies on (1) the allegations that peti-
                                - 31 -

tioner made in paragraphs 5 and 6 of petitioner’s bankruptcy

complaint that between 2000 and 2004 she owned 49 percent of the

stock of Today I Can and (2) Mr. Bell’s admission of those

allegations in the answer to petitioner’s bankruptcy complaint

that he filed in the Bankruptcy Court.

     Petitioner contends that Mr. Bell owned 100 percent of Today

I Can and that therefore the 2003 Today I Can net income is

attributable entirely to him.     In support of that contention,

petitioner relies on the 2003 Schedule K-1 in which Today I Can

reported that Mr. Bell owned 100 percent of its outstanding

stock.    Petitioner claims that in signing the 2003 joint return

she agreed with what was reported in that Schedule K-1; namely,

Mr. Bell owned 100 percent of the stock of Today I Can.19    In

advancing that claim, petitioner ignores that the Bells did not

attach to their 2003 joint return the 2003 Schedule K-1.    As a

result, petitioner could not have even been aware that Today I

Can had reported in that Schedule K-1 that Mr. Bell owned 100

percent of the stock of Today I Can.     Even if petitioner had been

aware that Today I Can had reported in the 2003 Schedule K-1 that

Mr. Bell owned 100 percent of that stock, we have held that “a

tax return does not establish the truth of the facts stated


     19
      Petitioner relies on Jones v. Commissioner, T.C. Memo.
2010-112, in support of her claim that in signing the 2003 joint
return she agreed with the 2003 Schedule K-1. We find Jones to
be materially distinguishable from the instant case and peti-
tioner’s reliance on that case to be misplaced.
                                - 32 -

therein.”    Campbell v. Commissioner, T.C. Memo. 2011-15 (citing

Wilkinson v. Commissioner, 71 T.C. 633 (1979)).

     More importantly, petitioner herself disputed what Today I

Can reported in the 2003 Schedule K-1.    In petitioner’s bank-

ruptcy complaint, petitioner indicated that during 2000 through

2004 she owned 49 percent of the stock of Today I Can.    In Mr.

Bell’s answer to that complaint Mr. Bell agreed with that state-

ment.

     In further support of petitioner’s contention that the 2003

Today I Can net income is attributable entirely to Mr. Bell,

petitioner relies on section 4.01(7)(b) of Revenue Procedure

2003-61.    That section provides in pertinent part:

             (b) Nominal ownership. If the item is titled in
        the name of the requesting spouse, the item is presump-
        tively attributable to the requesting spouse. This
        presumption is rebuttable.[20] * * *



     20
      Sec. 4.01(7)(b) of Revenue Procedure 2003-61 also provides
an example (nominal ownership example) of circumstances that
would establish that a requesting spouse’s ownership was nominal:

     For example, H opens an individual retirement account
     (IRA) in W’s name and forges W’s signature on the IRA
     in 1998. Thereafter, H makes contributions to the IRA
     and in 2002 takes a taxable distribution from the IRA.
     H and W file a joint return for the 2002 taxable year,
     but do not report the taxable distribution on their
     joint return. The Service later proposes a deficiency
     relating to the taxable IRA distribution and assesses
     the deficiency against H and W. W requests relief
     * * * under section 6015. W establishes that W did not
     contribute to the IRA, sign paperwork relating to the
     IRA, or otherwise act as if W were the owner of the
     IRA. W thereby rebutted the presumption that the IRA
     is attributable to W.
                              - 33 -

     According to petitioner, “the 51/49 allocation cited by

Respondent establishes * * * a presumption that petitioner owned

49% of the TIC [Today I Can] [stock] which can be rebutted by

evidence that any such interest was nominal”.   Petitioner claims

that she has, in fact, rebutted that presumption by showing that

her ownership interest in Today I Can was nominal because “Mr.

Bell wielded total control over the business” and “petitioner’s

role with TIC was extremely limited”.21   Even if petitioner were

correct that Mr. Bell controlled Today I Can, we would reject

petitioner’s contention that her ownership interest in that

company was nominal.   The nominal ownership example set forth in

section 4.01(7)(b) of Revenue Procedure 2003-61 is instructive.

In that example, the requesting spouse established that she did

not “act as if * * * [she] were the owner of the IRA.”   Id.    In

the instant case, petitioner acted as if she were an owner of

Today I Can when she sold her stock in that business to Mr. Bell

as part of the divorce proceedings between her and Mr. Bell.    In

this regard, we have found (1) that petitioner and Mr. Bell



     21
      Petitioner relies on Wilson v. Commissioner, T.C. Memo.
2010-134, in support of her claim that her ownership interest in
Today I Can was nominal because Mr. Bell wielded control over
that company and her role in that company was limited. In
Wilson, we addressed whether one-half of the income from an
unincorporated business operated by the nonrequesting spouse
should be attributed to the requesting spouse solely because the
requesting spouse had performed certain clerical work as an
employee of that business. We find Wilson to be materially
distinguishable from the instant case and petitioner’s reliance
on that case to be misplaced.
                              - 34 -

executed and filed with the Superior Court the property agreement

and (2) that that agreement provided, inter alia, that Mr. Bell

was to pay to petitioner $1 million for petitioner’s stock in

Today I Can.   If petitioner’s ownership interest in Today I Can

had been nominal, Mr. Bell would not have agreed to pay her a

substantial amount in exchange for that interest.22

     On the record before us, we find that 49 percent of the 2003

Today I Can net income is attributable to petitioner.   On that

record, we further find that petitioner has failed to carry her

burden of establishing that she satisfies all of the threshold

conditions with respect to the portion of the underpayment for

her taxable year 2003 that is attributable to that portion of

that net income.   See Rev. Proc. 2003-61, sec. 4.01(7).   On the

record before us, we find that petitioner has failed to carry her

burden of establishing that it would be inequitable to hold her

liable for the portion of that underpayment for her taxable year

2003 that is attributable to her 49-percent portion of the 2003

Today I Can net income.   On that record, we find that petitioner

has failed to carry her burden of establishing that she is

entitled for her taxable year 2003 to relief under section

6015(f) with respect to that portion of that underpayment.



     22
      In the property agreement, Mr. Bell agreed to pay peti-
tioner $1 million, which was equal to approximately one-half of
the gross receipts or sales that Today I Can reported in the 2003
Today I Can return.
                                - 35 -

     With respect to the portion of the underpayment for peti-

tioner’s taxable year 2003 that is attributable to petitioner’s

wages of $24,500 that the Bells reported in the 2003 joint

return, petitioner asserts:

     In addition, the 2003 federal 1040 [the 2003 joint
     return] shows that the couple [the Bells] earned
     $53,000.00 in wages that were paid by Today I Can, Inc.
     This consisted of wages in the amount of $24,500 that
     were paid to petitioner and wages of $28,500 that were
     paid to the non-requesting spouse. Thus, all income
     earned by the petitioner and nonrequesting spouse in
     2003 was directly attributable to Today I Can, Inc.

     It appears that petitioner is arguing that, because Today I

Can paid her $24,500 of wages during 2003 and because Mr. Bell

owned 100 percent of the stock of that company during that year,

those wages are attributable to him.     On the record before us, we

reject petitioner’s argument.    Regardless of who owns a company,

an employee is taxed on the wages that the company pays to the

employee.   Petitioner agrees that during 2003 she performed

services for Today I Can and that during that year Today I Can

paid her wages of $24,500 for those services.

     On the record before us, we find that the wages that Today I

Can paid petitioner during 2003 are attributable to petitioner.

On that record, we further find that petitioner has failed to

carry her burden of establishing that she satisfies all of the

threshold conditions with respect to the portion of the underpay-

ment for her taxable year 2003 that is attributable to those

wages.   See Rev. Proc. 2003-61, sec. 4.01(7).   On the record
                                - 36 -

before us, we find that petitioner has failed to carry her burden

of establishing that it would be inequitable to hold her liable

for the portion of the underpayment for her taxable year 2003

that is attributable to the wages that Today I Can paid her

during that year.     On that record, we find that petitioner has

failed to carry her burden of establishing that she is entitled

for her taxable year 2003 to relief under section 6015(f) with

respect to that portion of that underpayment.

     Respondent does not dispute that petitioner satisfies all of

the threshold conditions with respect to the portion of the

underpayment for petitioner’s taxable year 2003 that is attribut-

able to Mr. Bell.23    Where the requesting spouse satisfies the

threshold conditions, section 4.02(1) of Revenue Procedure 2003-

61 sets forth the circumstances under which the Commissioner

ordinarily will grant relief to that spouse under section 6015(f)

in a case, like the instant case, where a liability is reported

in a joint return but not paid.     As pertinent here, those circum-

stances, which section 4.02 of Revenue Procedure 2003-61 and we

refer to as elements, are:



     23
      The portion of the underpayment for petitioner’s taxable
year 2003 that is attributable to Mr. Bell consists of the
underpayment for that year attributable to (1) the wages of
$28,500 that Today I Can paid Mr. Bell during that year, (2) the
net business income of $2,195 from certain work Mr. Bell per-
formed on behalf of Today I Can that the Bells reported in the
2003 joint return, and (3) Mr. Bell’s 51-percent share of the
2003 Today I Can net income.
                               - 37 -

          (a) On the date of the request for relief, the
     requesting spouse is no longer married to * * * the
     nonrequesting spouse * * *;

          (b) On the date the requesting spouse signed the
     joint return, the requesting spouse had no knowledge or
     reason to know that the nonrequesting spouse would not
     pay the income tax liability. The requesting spouse
     must establish that it was reasonable for the request-
     ing spouse to believe that the nonrequesting spouse
     would pay the reported income tax liability. * * *; and

          (c) The requesting spouse will suffer economic
     hardship if the Service does not grant relief. For
     purposes of this revenue procedure, the Service will
     base its determination of whether the requesting spouse
     will suffer economic hardship on rules similar to those
     provided in Treas. Reg. § 301.6343-1(b)(4). * * *

Rev. Proc. 2003-61, sec. 4.02(1), 2003-2 C.B. at 298.    (We shall

hereinafter refer to the elements set forth in section

4.02(1)(a), (b), and (c) of Revenue Procedure 2003-61 as the

marital status element, the knowledge or reason to know element,

and the economic hardship element, respectively.)

     With respect to the portion of the underpayment for peti-

tioner’s taxable year 2003 that is attributable to Mr. Bell,24

(1) respondent concedes that the marital status element is

present, and (2) the parties dispute whether the knowledge or

reason to know element and the economic hardship element are

present.

     With respect to the knowledge or reason to know element,

petitioner must establish that it was reasonable for her to



     24
          See supra note 23.
                              - 38 -

believe that Mr. Bell would pay the tax shown due in the 2003

joint return.   See Rev. Proc. 2003-61, sec. 4.02(1)(b).   Respon-

dent argues that on July 29, 2004, the date on which petitioner

signed the 2003 joint return, she had knowledge or reason to know

that Mr. Bell would not pay the tax shown due in that return with

that return or within a reasonably prompt time.25   That is be-

cause, according to respondent:

     On July 29, 2004, petitioner (1) knew of the seven
     late-filed income tax returns [for the Bells’ taxable
     years 1997, 1998, 1999, 2000, 2001, 2002, and 2003],
     (2) knew that the 2000 and 2002 joint income tax re-
     turns reported unpaid tax of $69,165.00, (3) knew or
     had reason to know that Mr. Bell had made payments
     towards the delinquent tax obligations for tax years
     2000 and 2002 but that he had not remitted a payment
     towards the liability since March 2004, (4) knew or had
     reason to know that even after accounting for subse-
     quent payments, the outstanding tax liabilities from
     tax years 2000 and 2002 were in excess of $30,000.00,
     in addition to penalties and interest, and (5) knew
     that the 2003 return reported a tax due of $49,331.00.
     [Cross-references omitted.]




     25
      Respondent’s argument that petitioner must believe that
the tax would be paid in a reasonably prompt time is based on
Banderas v. Commissioner, T.C. Memo. 2007-129. In Banderas, we
held that in order for a belief that a liability would be paid to
be reasonable the requesting spouse must believe that the funds
to pay the liability would be on hand within a reasonably prompt
time. Respondent contends that that holding in Banderas is wrong
and that the requesting spouse must believe that the tax would be
paid by the later of the date on which the return was filed or
the date on which the tax is due to be paid. We need not revisit
our holding in Banderas as respondent invites us to do because,
as discussed below, even under that holding we sustain respon-
dent’s argument with respect to the knowledge or reason to know
element.
                              - 39 -

     Petitioner counters that it was reasonable for petitioner to

believe that Mr. Bell would pay the tax shown due in the 2003

joint return.   According to petitioner:

     At the time petitioner signed the 2003 Joint Return,
     she knew there was a balance due. However, she under-
     stood that Tom [Mr. Bell] would pay all taxes due
     according to his statement to her. * * * At that time,
     Today I Can, Inc., * * * was in the midst of an impres-
     sive run of success. As shown on forms 1120S which
     were filed for tax years 2003 and 2004, Today I Can,
     Inc. had had total 2003 income of $2,040,413.00 and
     total 2004 income of $2,106,344. * * *

          Moreover, within the one year period prior to the
     filing of the 2003 1040 (i.e. 09/11/03 through
     03/29/04), Tom Bell had tangibly demonstrated his
     ability and willingness to pay the tax liability as
     shown by the tax payments totaling $74,620.29 and had
     personally signed all the checks constituting those
     payments. Coupled with the fact that Tom Bell at that
     time was approximately forty years old and entering his
     prime earning years, any reasonable person would con-
     clude, as did petitioner, that she would have no reason
     to believe that Mr. Bell would not or, more impor-
     tantly, could not, make the payments. [Cross-reference
     and fn. ref. omitted.]

     On the record before us, we reject petitioner’s argument,

the cornerstone of which is that Today I Can reported gross

income of $2,040,413 and $2,106,344 for its taxable years 2003

and 2004, respectively.   Petitioner’s argument fails to take into

account that Today I Can reported total deductions of $1,833,385

and $2,078,880 for those respective years.   In addition, although

petitioner is correct that between September 11, 2003, and March

29, 2004, Mr. Bell remitted certain payments to the Service that
                              - 40 -

it applied against the Bells’ unpaid tax for each of their

taxable years 1999, 2001, and 2002, after Mr. Bell made those

payments there remained unpaid tax for the Bells’ taxable year

2002, including certain penalties and interest, of approximately

$40,500.   Moreover, we have found that on July 29, 2004, the date

on which petitioner signed the 2003 joint return, (1) petitioner

signed the 2000 joint return in which the Bells showed tax due of

$6,690 and (2) when the Bells filed that return a check for only

$1,000 that was drawn on Mr. Bell’s personal bank account was

included with that return.   In addition, when petitioner signed

the 2003 joint return she was aware that (1) between September

11, 2003, and July 29, 2004, she and Mr. Bell had filed late

respective tax returns for their taxable years 1997 through 2003;

(2) the 2000 joint return showed tax due of $6,690 that they did

not pay in full when they filed that return; (3) the 2002 joint

return showed tax due of $83,475 that they did not pay in full

when they filed that return; and (4) the 2003 joint return showed

tax due of $50,587 that they did not pay in full when they filed

that return.   We have also found that in the property agreement

petitioner acknowledged that she had “full and adequate knowl-

edge” of all relevant financial information pertaining to Mr.

Bell through July 10, 2004, the date on which petitioner executed

that agreement.   As a result, petitioner was or should have been

aware on that date, which was only 19 days before she signed the
                                  - 41 -

2003 joint return, that Mr. Bell had not paid in full the unpaid

tax for the Bells’ taxable year 2002 and that he had not made any

payments to the Service since March 29, 2004, with respect to

that unpaid tax.

     On the record before us, we find that petitioner has failed

to carry her burden of establishing that at the time she signed

the 2003 joint return she reasonably believed that the tax shown

due in that return would be paid on or before the date on which

that tax was due.     On that record, we further find that peti-

tioner has failed to carry her burden of establishing that at

that time she reasonably believed that the funds to pay the tax

shown due in the 2003 joint return would be available within a

reasonably prompt time.26      On the record before us, we find that

petitioner has failed to carry her burden of establishing that at

the time she signed the 2003 joint return she did not know and

had no reason to know that the tax shown due in that return would

not be paid.

     On the record before us, we find that petitioner has failed

to carry her burden of establishing that she satisfies the

requirements of the knowledge or reason to know element with

respect to the portion of the underpayment for her taxable year

2003 that is attributable to Mr. Bell.      See Rev. Proc. 2003-61,

sec. 4.02(1)(b).     On that record, we find that petitioner has


     26
          See supra note 25.
                                - 42 -

failed to carry her burden of establishing that all of the

elements of section 4.02 of Revenue Procedure 2003-61 are present

with respect to that portion of that underpayment.27   See id.,

sec. 4.02(1).

     Where, as here with respect to the portion of the underpay-

ment for petitioner’s taxable year 2003 that is attributable to

Mr. Bell, the requesting spouse satisfies the threshold condi-

tions but does not satisfy all of the requirements of section

4.02 of Revenue Procedure 2003-61, section 4.03 of that revenue

procedure sets forth the following factors that are to be consid-

ered in determining whether a requesting spouse is entitled to

relief under section 6015(f):    (1) Whether the requesting spouse

is separated or divorced from the nonrequesting spouse (marital

status factor); (2) whether the requesting spouse would suffer

economic hardship if not granted relief (economic hardship

factor); (3) whether the requesting spouse knew or had reason to

know that the nonrequesting spouse would not pay the tax liabil-

ity (knowledge factor); (4) whether the nonrequesting spouse has



     27
      In the light of our finding that petitioner has failed to
carry her burden of establishing that the knowledge or reason to
know element is present, we need not address here whether the
economic hardship element is present. See Rev. Proc. 2003-61,
sec. 4.02(1)(c). In discussing below the factors contained in
sec. 4.03 of Revenue Procedure 2003-61, we address whether
petitioner would suffer an economic hardship if relief under sec.
6015(f) were not granted with respect to the portion of the
underpayment for petitioner’s taxable year 2003 that is attribut-
able to Mr. Bell.
                              - 43 -

a legal obligation to pay the outstanding tax liability pursuant

to a divorce decree or agreement (legal obligation factor);

(5) whether the requesting spouse received a significant benefit

from the unpaid tax liability (significant benefit factor); and

(6) whether the requesting spouse has made a good faith effort to

comply with the tax laws for the taxable years following the tax-

able year to which the request for such relief relates (compli-

ance factor).   Rev. Proc. 2003-61, sec. 4.03(2)(a), 2003-2 C.B.

at 298.

      Other factors that may be considered under Revenue Procedure

2003-61 are (1) whether the nonrequesting spouse abused the

requesting spouse (abuse factor) and (2) whether the requesting

spouse was in poor mental or physical health (mental or physical

health factor) when he or she signed the tax return (return) or

when he or she requested relief.   Rev. Proc. 2003-61, sec.

4.03(2)(b).   In the event (1) the nonrequesting spouse abused the

requesting spouse or (2) the requesting spouse was in poor mental

or physical health when he or she signed the return or when he or

she requested relief, the abuse factor or the mental or physical

health factor, as the case may be, will be taken into account.

Id.   However, where (1) the nonrequesting spouse did not abuse

the requesting spouse and (2) the requesting spouse was not in

poor mental or physical health when she signed the return or when

she requested relief, those factors are not taken into account.

Id.
                              - 44 -

     In making our determination under section 6015(f), we shall

consider all of the factors listed above and any other relevant

factors.   No single factor is to be determinative in any particu-

lar case, and all factors are to be considered and weighed

appropriately.

     With respect to the marital status factor, the parties agree

that at the time of the trial in this case the Bells were di-

vorced.

     With respect to the economic hardship factor,28 petitioner

     28
      In determining whether a requesting spouse will suffer
economic hardship, sec. 4.02(1)(c) of Revenue Procedure 2003-61
requires reliance on rules similar to those provided in sec.
301.6343-1(b)(4), Proced. & Admin. Regs. That regulation gener-
ally provides that an individual suffers an economic hardship if
the individual is unable to pay his or her reasonable basic
living expenses. Sec. 301.6343-1(b)(4), Proced. & Admin. Regs.,
provides in pertinent part:

          (ii) Information from taxpayer.--In determining a
     reasonable amount for basic living expenses the direc-
     tor will consider any information provided by the
     taxpayer including--

             (A) The taxpayer’s age, employment status and
     history, ability to earn, number of dependents, and
     status as a dependent of someone else;

             (B) The amount reasonably necessary for food,
     clothing, housing (including utilities, home-owner
     insurance, home-owner dues, and the like), medical
     expenses (including health insurance), transportation,
     current tax payments (including federal, state, and
     local), alimony, child support, or other court-ordered
     payments, and expenses necessary to the taxpayer’s
     production of income (such as dues for a trade union or
     professional organization, or child care payments which
     allow the taxpayer to be gainfully employed);

                                                    (continued...)
                               - 45 -

claims on brief, and respondent does not dispute, that at the

time of the trial in this case petitioner’s monthly expenses

included expenses for (1) rent of $875, (2) utilities of $425,

and (3) food of $350.29   Respondent also does not dispute that

(1) at the time of that trial petitioner was unemployed, (2) at

that time petitioner’s sister contributed $600 monthly toward the

household expenses of petitioner and herself, and (3) from May

2009 until the time of the trial the only funds that petitioner

had available on which to live were the payments that Mr. Bell



     28
      (...continued)
             (C) The cost of living in the geographic area
     in which the taxpayer resides;

             (D) The amount of property exempt from levy
     which is available to pay the taxpayer’s expenses;

             (E) Any extraordinary circumstances such as
     special education expenses, a medical catastrophe, or
     natural disaster; and

             (F) Any other factor that the taxpayer claims
     bears on economic hardship and brings to the attention
     of the director.
     29
      Petitioner claims on brief that the expenses listed in the
text do not include her additional expenses for transportation
and medical care. Petitioner does not identify the specific
nature and the amount of each of those respective expenses. It
appears that (1) petitioner’s transportation expenses would
include expenses for gasoline and repairs and insurance on the
Ford Expedition that she owned and (2) petitioner’s medical
expenses would include the outstanding bills that she had at the
time of the trial in this case for medical care that had been
provided to her before 2008. Petitioner does not claim, and the
record does not establish, whether at the time of that trial
petitioner continued to have the clothing expense that she
claimed in her Form 12510.
                               - 46 -

had made pursuant to the bankruptcy settlement totaling $19,500

and certain savings, the amount of which is not established by

the record.30   Instead, respondent argues:

          Under the terms of a settlement agreement with Mr.
     Bell in his bankruptcy proceeding [the bankruptcy
     settlement], petitioner is entitled to receive
     $4,250.00 per month for twelve months and then
     $3,000.00 per month for 88 months, beginning in Novem-
     ber 2009. Since October 2009, Mr. Bell has paid peti-
     tioner $19,500.00. The agreement further specifies
     that upon default the terms of the original Installment
     Note [the 2004 installment note] shall revive and be of
     full legal force and effect. Because Mr. Bell is
     currently in default on this agreement, petitioner is
     entitled to collect the amounts due under the original
     installment note of $10,000.00 per month. Petitioner’s
     right to collect the amounts due under this installment
     note is an asset which petitioner is entitled to pursue
     to pay her 2003 joint income tax obligation. * * *
     [Cross-references omitted.]

     On the record before us, we reject respondent’s argument

with respect to the economic hardship factor.   Respondent’s

argument ignores respondent’s concession that Mr. Bell is in

default on the bankruptcy settlement.   In addition, we have found

(1) that from around February 2010 to the time of the trial in

this case, a period of approximately three months, Mr. Bell did

not make any monthly payments pursuant to the bankruptcy settle-

ment, (2) that, of the $19,500 that Mr. Bell paid pursuant to the

bankruptcy settlement between October 2009 and January 2010,

petitioner used $9,000 to pay her attorney, and (3) that as of



     30
      At the time of the trial, petitioner’s savings had been
reduced to approximately $100.
                               - 47 -

April 2, 2008, the date on which petitioner filed petitioner’s

bankruptcy complaint, Mr. Bell had not made any payments under

the 2004 installment note.

       It is reasonable to conclude on the basis of the facts that

we have found regarding Mr. Bell’s respective payment histories

under the 2004 installment note and the bankruptcy settlement

that Mr. Bell is unlikely to make voluntarily the payments

required by that note and that settlement.    It is also reasonable

to conclude on the basis of those facts that it is likely

(1) that petitioner will be required to maintain court proceed-

ings against Mr. Bell in order to attempt to collect the respec-

tive unpaid amounts under the 2004 installment note and the

bankruptcy settlement and (2) that any such legal actions will

require petitioner to retain and pay an attorney to represent

her.    We are unable to conclude, however, on the basis of the

facts that we have found that petitioner will in fact be able to

collect those unpaid amounts from Mr. Bell.

       It is also significant to our consideration of the economic

hardship factor that we have found that (1) since 2008 when Earn

and Learn was dissolved until the time of the trial in this case

petitioner has been unemployed, (2) around 1990 petitioner

suffered petitioner’s back injury, (3) in 1995 petitioner under-

went back surgery for that back injury during which metal rods

were inserted in her back, (4) as of the time of the trial in
                                   - 48 -

this case petitioner continued to suffer from petitioner’s back

injury in that she was unable to stand, sit, walk, or lie down

for long periods, and (5) at that time petitioner was approaching

60 years of age.        It is reasonable to conclude on the basis of

those facts that it is unlikely that petitioner will be able to

rejoin the workforce.        Even if petitioner were able to collect

from Mr. Bell any respective unpaid amounts under the 2004

installment note and the bankruptcy settlement, we believe on the

record before us that she would be using any such amounts in

order to pay her basic living expenses for the remainder of her

life.

     In addressing the economic hardship factor, we have in mind

that petitioner’s monthly expenses totaling $1,650 do not include

certain expenses that petitioner likely incurred or would have

incurred in the absence of her current financial difficulties.

First, at the time of the trial in this case petitioner had

certain outstanding bills in amounts not established by the

record for medical care that was provided to her before 2008.31

Second, petitioner’s monthly expenses do not take into account

any expenses with respect to the Ford Expedition that she owned

even though she presumably incurred and will continue to incur




        31
             See supra note 29.
                                 - 49 -

expenses for that vehicle, such as gasoline.32     Third, (1) from

around 2003 until the time of the trial in this case petitioner

did not maintain any health insurance and (2) since 2008 peti-

tioner has not sought treatment for any medical condition,

including petitioner’s back injury, because she was unable to

afford any such treatment.     Fourth, petitioner’s monthly expenses

do not take into account that petitioner remains liable for the

Bells’ respective unpaid taxes for their taxable years 2000 and

2002, which as of April 19, 2010, totaled $11,963.39, and

$36,895.25, respectively.      Nor do petitioner’s monthly expenses

take into account that we have found that petitioner has failed

to carry her burden of establishing that she is entitled to

relief under section 6015(f) with respect to, and that therefore

she remains liable for, the respective portions of the underpay-

ment for her taxable year 2003 that are attributable to

(1) petitioner’s 49-percent share of the 2003 Today I Can net

income and (2) the wages of $24,500 that Today I Can paid her

during 2003.

     On the record before us, we find that petitioner has carried

her burden of establishing that she would suffer economic hard-

ship if relief under section 6015(f) were not granted with

respect to the portion of the underpayment for her taxable year

2003 that is attributable to Mr. Bell.



     32
          See supra note 29.
                               - 50 -

     With respect to the knowledge factor, we have found that

petitioner has failed to carry her burden of establishing that at

the time she signed the 2003 joint return she did not know and

had no reason to know that the tax shown due in that return would

not be paid.

     With respect to the legal obligation factor, section

4.03(2)(a)(iv) of Revenue Procedure 2003-61 provides that that

factor “will not weigh in favor of relief if the requesting

spouse knew or had reason to know, when entering into the divorce

decree or agreement, that the nonrequesting spouse would not pay

the income tax liability.”    Although respondent does not dispute

that under the property agreement Mr. Bell is legally obligated

to pay the remaining unpaid tax for the Bells’ taxable year 2003,

respondent argues that at the time petitioner executed the

property agreement petitioner “knew or had reason to know that

Mr. Bell would not pay the outstanding joint income tax liabili-

ties.”

     We have found (1) that on July 10, 2004, petitioner and Mr.

Bell executed and filed with the Superior Court the property

agreement, and (2) that on July 29, 2004, the Bells jointly filed

late the 2003 joint return.   On the record before us, we find

that when petitioner and Mr. Bell executed the property agreement

petitioner was not aware of the contents of the 2003 joint return

or that that return would show tax due.   On that record, we find

that at the time petitioner executed the property agreement she
                              - 51 -

did not know and had no reason to know that the tax shown due in

the 2003 joint return would not be paid.

     With respect to the significant benefit factor, respondent

argues that petitioner “received a significant benefit from the

nonpayment of the 2003 tax liability.”   That is because, accord-

ing to respondent:

          All of petitioner’s personal bills were paid from
     the personal checking account at Union Planters Bank
     [Mr. Bell’s personal bank account] while she was mar-
     ried to Mr. Bell. This account also shows checks
     totaling $13,500.00 were paid directly to petitioner
     during 2003. As all of petitioner’s personal bills
     were paid from the checking account, this $13,500.00
     was completely at her disposal, and amounted to twenty-
     six percent of the unpaid income tax liability for
     2003. * * * [Cross-references omitted.]

     On the record before us, we reject respondent’s argument

that the checks drawn on Mr. Bell’s personal bank account total-

ing $13,500 that petitioner received during 2003 constituted a

significant benefit.   We have found (1) that during their mar-

riage the Bells did not maintain any bank account in their joint

names and petitioner did not maintain any bank account in her

sole name and (2) that petitioner deposited the wages of $24,500

that Today I Can paid her during 2003 into Mr. Bell’s personal

bank account, an account over which petitioner did not have

signatory authority.   We consider the $13,500 in checks drawn on

Mr. Bell’s personal bank account that Mr. Bell issued to peti-

tioner during 2003 to have been petitioner’s own money, since

during that year she deposited into that account her wages of
                              - 52 -

$24,500.   Moreover, it is reasonable to conclude on the record

before us that petitioner needed some cash in order to pay

certain normal living expenses, such as buying certain meals

outside the marital residence, buying gasoline for her Ford

Expedition, buying certain personal effects, and buying certain

services and products at the beauty parlor.     It is also reason-

able to conclude on the record before us that the only means by

which petitioner was able to obtain funds in order to pay those

types of normal living expenses was to cash the checks drawn on

Mr. Bell’s personal bank account that he issued to her.     On the

record before us, we find that petitioner did not receive a

significant benefit beyond normal support from the Bells’ failure

to pay the tax shown due in the 2003 joint return.

     With respect to the compliance factor, petitioner must

establish that she made a good faith effort to comply with the

tax laws after her taxable year 2003, the year at issue.     We have

found that on September 10, 2007, petitioner timely filed her

2006 return in which she showed tax due of $59,668 and with which

she included a payment of $59,668.     We have also found that on

October 20, 2008, petitioner filed her 2007 return in which she

claimed, inter alia, a refund of approximately $9,700.     Peti-

tioner’s tax for her taxable year 2006 was due on April 15, 2007,

see sec. 6151, and her payment of that tax on September 10, 2007,

was approximately five months late.     Petitioner paid the tax

shown due in the 2006 return at the time that she filed that
                                 - 53 -

return.   Although petitioner’s 2007 return was due on October 15,

2008, she did not file that return until October 20, 2008.

However, it is not clear from the record whether that return was

timely filed.   See sec. 7502.    In any event, petitioner claimed a

refund in her 2007 return.   We also note that both respondent’s

examiner and respondent’s Appeals officer found that petitioner

had made a good faith effort to comply with the tax laws after

her taxable year 2003, despite the fact that petitioner had paid

late the tax for her taxable year 2006.     On the record before us,

we find that petitioner made a good faith effort to comply with

the tax laws after the year at issue.

     With respect to the abuse factor, we have found that at no

time during their marriage did Mr. Bell physically abuse peti-

tioner.   In petitioner’s Form 12510, she claimed that Mr. Bell

verbally and mentally abused her.     In support of that claim,

petitioner relies on her testimony at trial that

     We didn’t always agree on everything he did. I guess I
     came from the old school that you were to treat your
     spouse -- I mean that the husband ran the family and
     that’s what I believed, you know. So I -- I argued and
     he would get very verbally abusive and he didn’t care
     who or what was around. You know, it didn’t matter.

We are unable to find on the basis of petitioner’s above-quoted

testimony that Mr. Bell verbally or mentally abused her during

their marriage.   On the record before us, we find that petitioner
                              - 54 -

has failed to carry her burden of establishing that during their

marriage Mr. Bell verbally and mentally abused her.

     With respect to the mental or physical health factor, we

have found that (1) around 1990 petitioner suffered petitioner’s

back injury, (2) in 1995 petitioner underwent back surgery for

that back injury during which metal rods were inserted in her

back, (3) as of the time of the trial in this case petitioner

continued to suffer from petitioner’s back injury in that she was

unable to stand, sit, walk, or lie down for long periods, and

(4) petitioner stopped receiving medical treatment for that back

injury in 1997.   We have also found that at the time of the trial

petitioner had not sought treatment for any medical condition

since 2008 because she was unable to afford any such treatment.

On the record before us, we find that petitioner was in poor

physical health when (1) the Bells filed the 2003 joint return,

(2) she filed Form 8857, and (3) the trial in this case took

place.

     Based upon our examination of the entire record before us,

we find that petitioner has carried her burden of establishing

that it would be inequitable to hold her liable for the portion

of the underpayment for her taxable year 2003 that is attribut-

able to Mr. Bell.   On that record, we further find that peti-
                             - 55 -

tioner has carried her burden of establishing that she is enti-

tled to relief under section 6015(f) for that portion of that

underpayment.

     We have considered all of the contentions and arguments of

the parties that are not discussed herein, and we find them to be

without merit, irrelevant, and/or moot.

     To reflect the foregoing,


                                      Decision will be entered

                                 under Rule 155.
