                         T.C. Memo. 2004-190



                       UNITED STATES TAX COURT



                 MAUREEN MONSOUR, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18147-02.              Filed August 25, 2004.



     Steven L. Sablowsky, for petitioner.

     Russell F. Kurdys, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     CHIECHI, Judge:    This case arises from (1) a request for

relief under section 6015(b)1 and, in the alternative, under

section 6015(f) with respect to each of petitioner’s taxable


     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code (Code) in effect at all relevant times.
All Rule references are to the Tax Court Rules of Practice and
Procedure.
                               - 2 -

years 1989, 1991, 1992, and 1993 and (2) a request for relief

under section 6015(f) with respect to petitioner’s taxable year

1990.

     The issues for decision are:

     (1) Is petitioner entitled to relief under section 6015(b)

with respect to each of the taxable years 1989, 1991, 1992, and

1993?   We hold that petitioner is not entitled to such relief.

     (2) Did respondent abuse respondent’s discretion in denying

petitioner relief under section 6015(f) with respect to each of

the taxable years 1989, 1990, 1991, 1992, and 1993?   We hold that

respondent did not abuse respondent’s discretion.

                          FINDINGS OF FACT

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

     At the time petitioner filed the petition, she resided in

Jeanette, Pennsylvania.

     Petitioner received three degrees from the University of

Pittsburgh:   (1) An undergraduate nursing degree in 1976; (2) a

graduate nursing degree in 1980; and (3) a law degree in 1990.

     From 1976 until 1990, petitioner worked at Monsour Medical

Center, initially as a registered nurse in the critical care unit

and thereafter as the director of nursing.

     In 1991, petitioner was admitted to practice law in Pennsyl-

vania and began to do so as a sole practitioner focusing on

family law and the respective laws relating to personal injury
                               - 3 -

claims and Social Security claims for disability.    In 1992,

petitioner was admitted to practice law in Florida, although she

limited her law practice almost exclusively to Pennsylvania.

     On July 3, 1983, petitioner, who was approximately 29 years

old, married William J. Monsour (Mr. Monsour), who was approxi-

mately 55 years old.   At that time, Mr. Monsour was a successful

physician specializing in internal medicine at Monsour Medical

Center as well as a successful investor who, either alone or with

other persons excluding petitioner, had invested in various

assets.   (We shall refer to the assets in which Mr. Monsour,

either alone or with others excluding petitioner, had invested as

Mr. Monsour’s assets or Mr. Monsour’s investments.)

     Throughout the taxable years at issue, at least certain

household bills relating to the residence of petitioner and Mr.

Monsour were sent to Mr. Monsour’s office.   Mr. Monsour took any

such bills to that residence, where petitioner reviewed them,

prepared checks to pay them, asked Mr. Monsour to sign those

checks, and mailed those signed checks to the payees.    At all

relevant times, Mr. Monsour also signed checks with respect to

Mr. Monsour’s investments as well as checks with respect to the

joint investments of petitioner and Mr. Monsour.    Petitioner

reviewed those signed checks and mailed them to the payees.

     Before their marriage, petitioner and Mr. Monsour entered

into a prenuptial agreement (prenuptial agreement), which listed
                               - 4 -

all of Mr. Monsour’s assets.   That agreement provided that

petitioner was to receive (1) 10 percent of Mr. Monsour’s assets

in the event that she and he were to divorce prior to a stated

time not disclosed by the record and (2) a percentage of Mr.

Monsour’s assets not disclosed by the record in excess of 10

percent if she and he were to remain married after such stated

time and were to have children.   Petitioner and Mr. Monsour had

three children for whose care she was principally responsible

during the taxable years at issue.

     Mr. Monsour’s assets listed in the prenuptial agreement and

Mr. Monsour’s assets that he acquired either alone or with others

excluding petitioner after he married her included the following

assets acquired in the years indicated.

     In 1971, Mr. Monsour bought a house situated on 68 acres of

land known as Open Heart located in the mountains in Fairfield

Township, Pennsylvania (Open Heart property).

     In 1973, Mr. Monsour and his three brothers, Robert Monsour,

Roy Monsour, and Howard Monsour (collectively, Mr. Monsour’s

brothers), formed a partnership known as Monsour Gator Groves

(Monsour Gator Groves), which invested in a 290-acre orange grove

located near Sarasota, Florida (Sarasota).   In 1989, they sold

that partnership.

     In 1974, Mr. Monsour and Mr. Monsour’s brothers formed a

partnership known as Laurel Valley Farms, which invested in
                              - 5 -

cattle situated on farmland located in Pennsylvania.

     In 1979, Mr. Monsour purchased several condominiums with

ocean views in a condominium hotel known as the Three Crowns

Hotel located in Sarasota.

     At a time not disclosed by the record after Mr. Monsour

invested in the Three Crowns Hotel in 1979 and before July 3,

1983, he purchased 40 percent of the stock of a corporation known

as Azure Tides, Inc., which owned a hotel (Azure Tides Hotel)

located adjacent to the Three Crowns Hotel.

     At a time not disclosed by the record after Mr. Monsour

invested in Azure Tides, Inc., and before July 3, 1983, he

purchased 33-1/3 percent of the stock of a corporation which

owned a shopping center known as Georgetown Square2 located in

Sarasota.

     At a time not disclosed by the record before July 3, 1983,

Mr. Monsour invested in the Three Crowns Hotel Back Court, a two-

story motel located behind the Three Crowns Hotel.

     Around 1980, Mr. Monsour and a radiologist formed a corpora-

     2
      The record refers to the shopping center located in
Sarasota as both Georgetown Square and Georgetowne Square. For
convenience, we shall refer to that shopping center as Georgetown
Square.

     The record refers to the following three corporations with
the words “Georgetown Square” in their names in which Mr. Monsour
or petitioner and Mr. Monsour owned stock: Georgetown Square,
Ltd., Georgetown Square Assoc., Inc., and Georgetown Square
Assoc., Ltd. The record is not clear as to which of those
corporations owned the Georgetown Square shopping center.
                              - 6 -

tion known as Scanner Corporation, which invested in a CT Scan

machine.

     At a time not disclosed by the record before July 3, 1983,

Mr. Monsour and a Mr. Seltzer invested in an apartment (Beach

Road apartment) located at 450 Beach Road in Sarasota.   At a time

not disclosed by the record, Mr. Seltzer became ill, and two of

Mr. Monsour’s brothers, Robert Monsour and Roy Monsour, purchased

Mr. Seltzer’s interest in that apartment.

     At a time not disclosed by the record before July 3, 1983,

Mr. Monsour and Mr. Seltzer invested in an apartment (Lido Beach

apartment) located at 703 Lido Beach in Sarasota.   At a time not

disclosed by the record, Mr. Seltzer became ill, and Mr. Monsour

purchased Mr. Seltzer’s interest in that apartment.

     Around 1988, Mr. Monsour and Mr. Monsour’s brothers invested

in a medical supply company known as American Supply.

     At a time not disclosed by the record, Mr. Monsour invested

in a mutual fund known as MFS Lifetime.

     At a time not disclosed by the record after July 3, 1983,

petitioner and Mr. Monsour jointly invested in (1) eight town-

houses (Irwin rental townhouses) located in Irwin, Pennsylvania,

which they intended to, and did, rent and (2) unit 201 of the

Azure Tides Hotel.

     From around 1973 through around 1993, Mr. Monsour traveled

each month (monthly trip) from Pennsylvania to the Sarasota area
                                - 7 -

in order to check on Mr. Monsour’s investments in the Sarasota

area (Mr. Monsour’s Florida investments) which, as discussed

above, included Monsour Gator Groves, the Three Crowns Hotel,

Azure Tides, Inc., Georgetown Square, the Three Crowns Hotel Back

Court, the Beach Road apartment, and the Lido Beach apartment.

With respect to each such monthly trip, Mr. Monsour usually left

on a Wednesday evening and returned on the following Monday

morning.    At all relevant times, including throughout the taxable

years at issue, petitioner knew about Mr. Monsour’s monthly

trips.    Sometimes petitioner traveled with Mr. Monsour on those

trips, although she was not involved in checking on Mr. Monsour’s

Florida investments.

     From the time of their marriage on July 3, 1983, until 1986,

petitioner and Mr. Monsour did not worry about money and did not

scrutinize their discretionary spending to any significant

extent.    Starting in 1986 and continuing throughout the taxable

years at issue, Mr. Monsour began to experience certain Federal

income tax (tax) problems and certain other nontax problems

(discussed below) with at least certain of Mr. Monsour’s Florida

investments.   As a result, petitioner and Mr. Monsour began to

scrutinize their discretionary spending much more than they had

in the past.   At all relevant times, petitioner knew that Mr.

Monsour spent a large amount of money on Mr. Monsour’s Florida

investments and believed that that amount was extravagant.    At a
                               - 8 -

time not disclosed by the record after 1986, petitioner ques-

tioned Mr. Monsour about whether Mr. Monsour’s Florida invest-

ments were worthwhile, to which he responded that they were.

Except for having informed petitioner that he thought his Florida

investments were worthwhile, Mr. Monsour did not discuss with

petitioner any of the nontax business aspects of Mr. Monsour’s

investments.

     In 1986, Mr. Monsour began to experience tax problems when

Congress enacted certain provisions into the Code that in general

eliminated the favorable tax treatment that the Code had previ-

ously permitted with respect to at least certain of Mr. Monsour’s

Florida investments.   Starting in 1986, Mr. Monsour also began to

experience certain nontax problems with at least certain of those

investments, including those discussed below.

     At a time not disclosed by the record, Highlander Properties

Enterprises, Inc. (Highlander Properties Enterprises), commenced

an action in the Circuit Court of the Twelfth Judicial Circuit in

and for Sarasota County, Florida (Florida Circuit Court) against,

among others, petitioner and Mr. Monsour (Florida Circuit Court

action).   As a result of that action, on July 12, 1993, units 1,

2, 4, 5, 6, 201, 202, 203, 204, 205, 401, 402, 403, 404, and 405

of the Three Crowns Hotel were sold to Highlander Properties

Enterprises in a foreclosure sale.     Thereafter, on a date not

disclosed by the record in 1994, petitioner and Mr. Monsour
                                - 9 -

signed a quitclaim deed by which they transferred to Highlander

Property Enterprises units 3 and 7 of the Three Crowns Hotel,

which had not been the subject of the Florida Circuit Court

action.

     At a time not disclosed by the record, Mr. Monsour and other

stockholders of Azure Tides, Inc., were forced to sell that

corporation to a hotel chain.

     On March 2, 1988, petitioner and Mr. Monsour signed a

continuing guaranty with respect to Georgetown Square, Ltd.,

which provided that they jointly and severally guaranteed the

payment of any and all obligations and indebtedness of Georgetown

Square, Ltd., pertaining to a $500,000 mortgage.

     At a time not disclosed by the record, the mortgage on the

Three Crowns Hotel Back Court was foreclosed.

     Starting around 1989, pursuant to the prenuptial agreement,

petitioner asked Mr. Monsour to make her the joint owner of at

least certain of Mr. Monsour’s assets, and Mr. Monsour agreed to

do so.    As discussed below, pursuant to petitioner’s request, Mr.

Monsour made certain transfers of Mr. Monsour’s assets to peti-

tioner (Mr. Monsour’s transfers).3

     In 1989, Mr. Monsour transferred to petitioner one-half of

     3
      The record establishes that Mr. Monsour made certain other
transfers to petitioner but does not establish which of Mr.
Monsour’s assets were included in those transfers. The record
does not establish whether Mr. Monsour made any additional
transfers of Mr. Monsour’s assets to petitioner.
                                      - 10 -

his interest in the residence of petitioner and Mr. Monsour.

       In 1991, Mr. Monsour transferred to petitioner one-half of

his interest in the Open Heart property.

       In 1997, Mr. Monsour transferred to petitioner one-half of

his interest in 30 acres of land, which at all relevant times he

and one of his brothers (Howard Monsour) owned and which was

located behind Monsour Medical Center, a hospital that Mr.

Monsour had owned and operated at all relevant times since 1964.

       In 1997, Mr. Monsour transferred to petitioner one-half of

his interest in Laurel Valley Farms.

       At a time not disclosed by the record, petitioner and Mr.

Monsour jointly filed Form 1040, U.S. Individual Income Tax

Return (Form 1040), for each of their taxable years 1987 and

1988.

       On March 19, 1993, respondent issued to petitioner and Mr.

Monsour a notice of deficiency (notice) with respect to their

taxable years 1987 and 1988 (notice for the taxable years 1987

and 1988).         In that notice, respondent determined the following

deficiencies in, and additions to, the tax of petitioner and Mr.

Monsour:


                                           Additions to Tax
                            Sec.          Sec.             Sec.        Sec.
Year        Deficiency   6653(a)(1)   6653(a)(1)(A)   6653(a)(1)(B)    6661
1987          $15,851        --          $1,066              1        $5,332
1988           21,416      $1,627          --               --         8,133

        1
         50% of the interest due on the deficiency.
                             - 11 -

Attached to the notice for the taxable years 1987 and 1988 was,

inter alia, Form 886-A, EXPLANATION OF ITEMS (Form 886-A), which

provided in pertinent part as follows:

     INTEREST INCOME - MONSOUR FAMILY INVESTMENTS

          It is determined that you understated your taxable
     interest income received from Monsour Family Invest-
     ments by $12,334.00 and $10,014.00 for the years ending
     December 31, 1987 and December 31, 1988, respectively.
     Therefore, your taxable income is increased $12,334.00
     for 1987 and $10,014.00 for 1988.

     LOSS - 3 CROWNS HOTEL

          Expenses incurred in connection with 3 Crowns
     Hotel were not for an activity entered into for profit.
     Therefore, the $126,632.00 shown on your return for
     1987 and the $136,461.00 shown on your return for 1988
     as deductions are not allowable under Section 183 of
     the Internal Revenue Code and your taxable income is
     increased accordingly.

     TAXES - SCHEDULE A
     INTEREST EXPENSE - SCHEDULE A

          The taxes and interest expense deducted on Sched-
     ule C for 3 Crowns Hotel are allowable as itemized
     deductions on Schedule A. Your taxable income for 1987
     is, therefore, decreased by $13,319.00 for taxes and
     $65,624.00 for interest. Your taxable income for 1988
     is decreased by $12,791 for taxes and by $55,328.00 for
     interest.

     PREVIOUSLY AGREED ADJUSTMENTS

          You signed an agreement on April 8, 1992 consent-
     ing to the following adjustments:
                                   - 12 -

                                                1987          1988
        3 Crowns Motel                        $10,681       $ 3,171
        Interest & Dividend Income              3,622         8,523
        Sched. C Deductions -                   8,334
          Medical Consultant
        Sched. C Deductions -                    6,109         1,200
          Medical Technician
        Partnership Income & Losses             33,461       87,397
        Sched. C Depreciation -                               2,688
          Azure Tides Hotel
        Capital Gains & Losses                  3,000          11,209
        Itemized Deductions                   -28,634          28,634
                                                         [1]
                                              $30,573        $142,822
      1
       Form 886-A erroneously showed the total of the adjustments for 1988 to
which petitioner and Mr. Monsour had previously agreed as $142,802.

      On June 17, 1993, petitioner and Mr. Monsour filed a

petition (petition for the taxable years 1987 and 1988) in the

Court with respect to the notice for the taxable years 1987 and

1988.     (We shall refer to the case that petitioner and Mr.

Monsour commenced when they filed the petition for the taxable

years 1987 and 1988 as the case for the taxable years 1987 and

1988.)     In that petition, petitioner and Mr. Monsour alleged,

inter alia, that respondent erred in failing to determine that

petitioner is entitled to relief under section 6013(e).

      William F. Winschel (Mr. Winschel) represented petitioner

and Mr. Monsour in the case for the taxable years 1987 and 1988.

Edward J. Laubach, Jr. (Mr. Laubach), represented respondent in

that case.

      On November 1, 1994, pursuant to the agreement of the

parties, the Court entered a decision in the case for the taxable

years 1987 and 1988 (stipulated decision in the case for the
                                - 13 -

taxable years 1987 and 1988).     That decision provided in perti-

nent part as follows:

             Pursuant to agreement of the parties in this case,
     it is

          ORDERED and DECIDED: That there are deficiencies
     in income tax due from the petitioners for the taxable
     years 1987 and 1988 in the amounts of $3,827 and
     $10,463, respectively;

          That there is an addition to the tax due from the
     petitioners under the provisions of I.R.C. § 6661 for
     the taxable years 1987 and 1988 in the amounts of $930
     and $2,158, respectively; and

          That there are no additions to the tax due from
     the petitioners under the provisions of I.R.C. §§
     6653(a)(1)(A), 6653(a)(1)(B) and 6653(a)(1) for the
     taxable years 1987 and 1988.

     Joseph N. Iezzi (Mr. Iezzi), a certified public accountant,

prepared Form 1040 that petitioner and Mr. Monsour signed and

jointly filed for each of their taxable years 1989 (1989 joint

return), 1990 (original 1990 joint return), 1991 (1991 joint

return), 1992 (1992 joint return), and 1993 (1993 joint return).4




     4
      Petitioner and Mr. Monsour filed a joint tax return (joint
return) for each of their taxable years 1989, 1990, 1991, 1992,
and 1993 on the dates indicated:
                               - 14 -

Mr. Iezzi also prepared two Forms 1040X, Amended U.S. Individual

Income Tax Return, that petitioner and Mr. Monsour signed and

jointly filed for their taxable year 1990 (first 1990 amended

joint return and second 1990 amended joint return, respectively).

     The joint returns for the taxable years at issue showed the

following:




                Joint Return      Date Filed
                 1989 joint      Apr. 28, 1992
                   return
               Original 1990     Oct. 18, 1991
                joint return
                 1991 joint      Oct. 20, 1992
                   return
                 1992 joint      Dec. 27, 1993
                   return
                 1993 joint      Oct. 25, 1994
                   return
                                        - 15 -

                      1989         Original        1991         1992      1993
                      Joint       1990 Joint       Joint        Joint     Joint
                     Return         Return        Return       Return    Return
     Wages,         $260,128       $267,160      $153,375     $105,990   $94,594
 salaries, tips,
      etc.
     Taxable         151,395        71,777        17,679        3,830      1,184
 interest income
 Dividend income          552          435            645        --          -–
 Business income    (187,336)     (177,287)      (165,526)    (27,912)   (24,275)
 or (loss) from
   Schedule C
  Capital gain                7         --           --             --       --
  distributions
   Taxable IRA          --              --          --         23,968     21,090
  distributions
     Taxable            2,000           1,189             0         --    20,898
  pensions and
    annuities
     Rents,         (334,910)      193,578        40,882      (58,533)   (156,563)
   royalties,
  partnerships,
    estates,
  trusts, etc.,
 from Schedule E
  Other income           255           253          --           --        42,100
  Total income          --         357,105        47,055        44,343       (972)
    Total tax           --          36,370             0         1,650         350
 Total payments        3,134         1,657             0           445          76
     of tax
                                    1                           2             3
  Amount of tax          --          34,713               0      1,255         274
       due
      1
        When petitioner and Mr. Monsour filed    their original 1990 joint return,
they did not pay the amount of tax shown due     in that return.
      2
        When petitioner and Mr. Monsour filed    their 1992 joint return, they paid
the $1,255 of tax shown due in that return.
      3
        When petitioner and Mr. Monsour filed    their 1993 joint return, they paid
the $274 of tax shown due in that return.

      Schedule C, Profit or Loss From Business (Schedule C),

included as part of each of the joint returns for the taxable

years at issue showed the following net profit or (loss) with

respect to the following businesses:
                                    - 16 -

                       1989       Original      1991        1992        1993
    Schedule C         Joint     1990 Joint     Joint       Joint       Joint
    Relating to       Return       Return      Return      Return      Return
   Three Crowns      ($99,414)    ($98,176)   ($91,122)       –-          –-
       Hotel
 Azure Tides Hotel   (16,803)      (5,899)    (24,927)    ($17,817)   ($15,749)
   Three Crowns      (73,219)     (73,212)    (41,975)        –-          –-
 Hotel Back Court
  1 Linden Drive        2,100        –-          –-          –-          –-
 Petitioner’s law         –-         –-        (7,502)    (10,095)     (8,526)
     practice

     Schedules C relating to the Three Crowns Hotel included as

part of the 1989 joint return and as part of the original 1990

joint return identified petitioner and Mr. Monsour as propri-

etors.    Schedule C relating to that hotel included as part of the

1991 joint return identified Mr. Monsour as the proprietor.

     Schedule C relating to the Azure Tides Hotel included as

part of each of the joint returns for the taxable years at issue

identified Mr. Monsour as the proprietor.

     Schedules C relating to the Three Crowns Hotel Back Court

included as part of the 1989 joint return and as part of the

original 1990 joint return identified petitioner and Mr. Monsour

as proprietors.      Schedule C relating to that motel included as

part of the 1991 joint return identified Mr. Monsour as the

proprietor.

     Schedule C relating to 1 Linden Drive included as part of

the 1989 joint return identified petitioner as the proprietor and

showed “Medical Technician” as the principal business or profes-

sion.    The net profit shown in that Schedule C resulted from

petitioner’s having performed certain bookkeeping tasks for
                                 - 17 -

Scanner Corporation in 1989, for which she was compensated a few

hundred dollars per month.

     Schedule E, Supplemental Income and Loss (Schedule E),

included as part of each of the joint returns for the taxable

years at issue showed, inter alia, the following income or

(losses) with respect to the following rentals:


                     1989      Original      1991       1992       1993
   Schedule E        Joint    1990 Joint     Joint      Joint      Joint
   Relating to      Return      Return      Return     Return     Return
   Lido Beach      ($7,041)     ($931)     ($3,755)   ($3,644)   ($1,757)
    Apartment
  Irwin Rental     (5,494)      (642)      (3,522)    (3,902)      8,032
   Townhouses
   Beach Road      (3,844)      (267)         –-        –-          –-
    Apartment
 Island House in      –-         –-        (19,621)   (36,827)   (31,275)
    Sarasota

     Schedule E included as part of each of the joint returns for

the taxable years at issue showed, inter alia, the following

income or (loss) with respect to the following partnerships and S

corporations:
                                      - 18 -

                       1989          Original        1991          1992        1993
    Schedule E         Joint        1990 Joint       Joint         Joint       Joint
    Relating to       Return          Return        Return        Return      Return
   Monsour Gator     ($10,579)          –-            –-            –-          –-
      Groves
   Laurel Valley         (81,380)   ($40,300)      ($25,611)     ($33,533)   ($12,134)
       Farms
                                       1
 Azure Tides, Inc.   (210,727)         –-                  (7)   (58,156)    (119,429)
                     2
    Georgetown       (119,748)       (23,518)         –-           –-           –-
   Square, Ltd.
 Georgetown Square          (73)            (18)      –-            –-          –-
   Assoc., Inc.
 Georgetown Square       (7,245)           –-         –-            –-          –-
   Assoc., Ltd.
      Scanner            111,221     259,254         93,398        72,451       –-
    Corporation
      1
        The joint return did not show any amount because, as discussed below,
petitioner and Mr. Monsour did not receive Schedule K-1, Shareholder’s Share
of Income, Credits, Deductions, Etc. (Schedule K-1), relating to Azure Tides,
Inc., until after they filed the original 1990 joint return.
      2
        Of the $119,748 total loss reported, $112,583 was reported as a passive
loss and $7,165 was reported as a nonpassive loss.

      Petitioner did not examine in detail the 1989 joint return,

the original 1990 joint return, the 1991 joint return, the 1992

joint return, and the 1993 joint return before she signed each

such return.     Nonetheless, in signing each of those returns, she

was aware, inter alia, (1) that such returns claimed substantial

losses in Schedules C ranging from $24,275 to $187,336 and in

Schedules E ranging from $58,533 to $334,910, (2) that such

claimed losses reduced income reported in such returns, and

(3) that there were (a) no tax shown due in the 1989 joint return

or the 1991 joint return, (b) tax shown due of $34,713 in the

original 1990 joint return,5 (c) tax shown due of $1,255 in the



      5
      As discussed above, when petitioner and Mr. Monsour filed
their original 1990 joint return, they did not pay the amount of
tax shown due in that return.
                              - 19 -

1992 joint return, and (d) tax shown due of $274 in the 1993

joint return.   In signing each of the joint returns for the

taxable years at issue, petitioner did not raise any questions

with Mr. Monsour or Mr. Iezzi regarding any of those returns.

Before petitioner signed each of the joint returns for the tax-

able years at issue, she read the jurat clause that appeared

above the signature lines in each such return.

     In their first 1990 amended joint return, petitioner and Mr.

Monsour showed total income as originally reported of $357,105,

taxable income as originally reported of $270,922, tax as origi-

nally reported of $78,155, credits as adjusted of $1,323,6 and

total tax liability as adjusted of $76,832.   In that amended

return, petitioner and Mr. Monsour showed a net decrease in total

income of $101,287, correct total income of $255,818, correct

taxable income of $169,635, correct tax of $47,841, correct total

tax liability of $46,518, and tax due of $44,861.7   Part II,

Explanation of Changes to Income, Deductions, and Credits (Part



     6
      Petitioner and Mr. Monsour reported in the original 1990
joint return a credit of $41,785.
     7
      In the original 1990 joint return, petitioner and Mr.
Monsour showed tax due of $34,713. Although there were net
decreases shown in the first 1990 amended return in the respec-
tive amounts of total income and taxable income reported in the
original 1990 joint return, that amended return showed an in-
crease in the tax due shown in that original return because
petitioner and Mr. Monsour claimed (1) a credit of $41,785 in the
original 1990 joint return and (2) a credit of $1,323 in the
first 1990 amended joint return.
                              - 20 -

II of Form 1040X), of the first 1990 amended joint return pro-

vided in pertinent part as follows:

     Line 8a - Interest income from K1 (1120S) - K1 from
     Azure Tides, Inc. was not received until 11-22-91 [af-
     ter petitioner and Mr. Monsour filed their original
     1990 joint return]

     Sch. E - Part II - Nonpassive loss from K1 (1120S) - K1
     from Azure Tides, Inc. was not received until 11-22-91
     (Copy of K1 attached).

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

Deductions, Etc., relating to Azure Tides, Inc., included as part

of the first 1990 amended joint return (1990 Azure Tides, Inc.,

Schedule K-1)8 identified Mr. Monsour as the shareholder and

showed an ordinary loss from trade or business activities of

$101,805 and portfolio interest income of $518.

     In their second 1990 amended joint return, petitioner and

Mr. Monsour showed total adjusted gross income as adjusted of

$255,818, taxable income as adjusted of $169,635, tax as adjusted

of $47,841, credits as adjusted of $1,323, and total tax liabil-

ity as adjusted of $46,518.   In that amended return, petitioner

and Mr. Monsour showed a net increase in adjustments to income of

$91,920, correct total adjusted gross income of $163,898, correct

taxable income of $77,715, correct tax of $17,542, correct cred-

its of $0, correct total tax liability of $29,048, and tax due of

$27,391.   Part II of Form 1040X of the second 1990 amended joint


     8
      The 1990 Azure Tides, Inc., Schedule K-1 is the only Sched-
ule K-1 that is part of the record in the instant case.
                               - 21 -

return provided in pertinent part as follows:

     Line 2, Adjustments to Income:
     Expenses in the amount of $91,920.00 are claimed in
     connection with legal fees and custodian fees paid for
     the purpose of protecting and preserving existing busi-
     ness assets, business income, professional reputation
     and professional employment.

     At a time not disclosed by the record before July 6, 1995,

respondent initiated an examination of the respective joint

returns for the taxable years at issue (examination of the tax-

able years at issue).    On July 6, 1995, petitioner and Mr.

Monsour executed Form 2848, Power of Attorney and Declaration of

Representative, in which they appointed Mr. Winschel as their

attorney-in-fact with respect to that examination.

     At a time not disclosed by the record after the examination

of the taxable years at issue began, respondent’s Appeals Office

(Appeals Office) began consideration of those years.    Mr.

Winschel continued to represent petitioner and Mr. Monsour at the

Appeals Office.

     At a time not disclosed by the record before December 16,

1997, respondent issued to petitioner and Mr. Monsour a notice

with respect to the taxable years at issue (notice for the tax-

able years at issue).9   In that notice, respondent made determina-

tions for one or more of the taxable years 1989, 1991, 1992, and


     9
      The notice for the taxable years at issue is not part of
the record in the instant case. The record does not establish
whether respondent made determinations in that notice relating to
any matters other than those discussed herein.
                              - 22 -

1993 of erroneous deductions with respect to Laurel Valley Farms,

the Three Crowns Hotel, Azure Tides, Inc., Georgetown Square, and

the Three Crowns Hotel Back Court.10   In the notice for the tax-

able years at issue, respondent also made determinations for one

or more of the taxable years 1989, 1991, 1992, and 1993 of

(1) omitted income with respect to Georgetown Square, (2) omitted

interest income with respect to Monsour Medical Center, and

(3) omitted income relating to unexplained deposits into (a) the

joint bank accounts of petitioner and Mr. Monsour, (b) a separate

bank account of petitioner (petitioner’s separate bank account),

and (c) a bank account that petitioner maintained with respect to

her law practice (petitioner’s law practice bank account).11   In

that notice, respondent also made determinations for one or more



     10
      The record does not establish the respective amounts of
respondent’s determinations of erroneous deductions with respect
to Laurel Valley Farms, the Three Crowns Hotel, Azure Tides,
Inc., Georgetown Square, and the Three Crowns Hotel Back Court.
Nor does the record establish to which of the taxable years 1989,
1991, 1992, and 1993 those determinations pertain.
     11
      The record does not establish the respective amounts of
respondent’s determinations of omitted income with respect to
Georgetown Square, Monsour Medical Center, the joint bank ac-
counts of petitioner and Mr. Monsour, petitioner’s separate bank
account, and petitioner’s law practice bank account, although, as
discussed below, the record shows that respondent made a determi-
nation of omitted income relating to petitioner’s law practice
bank account in an amount between $8,000 and $10,000. Nor does
the record establish to which of the taxable years 1989, 1991,
1992, and 1993 those determinations pertain, although, as dis-
cussed below, the record shows that respondent made a determina-
tion of omitted income relating to petitioner’s law practice bank
account for two of the three taxable years 1991, 1992, and 1993.
                              - 23 -

of the taxable years 1989, 1991, 1992, and 1993 with respect to

American Supply and MFS Lifetime.12

     On December 16, 1997, petitioner and Mr. Monsour filed a

petition (petition for the taxable years at issue) in the Court

with respect to the notice for the taxable years at issue.   (We

shall refer to the case that petitioner and Mr. Monsour commenced

when they filed the petition for the taxable years at issue as

the case for the taxable years at issue.)   In that petition,

petitioner and Mr. Monsour did not make a claim that petitioner

is entitled to relief under section 6013(e) with respect to any

of the taxable years at issue.   At no time while the case for the

taxable years at issue was pending in the Court, including during

the period July 22 to October 8, 1998, the date on which, pursu-

ant to the agreement of the parties, the Court entered a decision

for the taxable years at issue (discussed below), did petitioner

make a claim that she is entitled to relief from joint and sev-

eral liability with respect to any of those taxable years.

     Mr. Winschel represented petitioner and Mr. Monsour in the

case for the taxable years at issue.   Mr. Laubach represented

respondent in that case.

     At a time not disclosed by the record before June 8, 1998,


     12
      The record does not establish the nature and the respec-
tive amounts of respondent’s determinations with respect to
American Supply and MFS Lifetime. Nor does the record establish
to which of the taxable years 1989, 1991, 1992, and 1993 those
determinations pertain.
                              - 24 -

Mr. Laubach issued a subpoena to Monsour Medical Center in order

to determine whether there was any omitted interest income with

respect to that entity.   On June 8, 1998, Hugh E. Teitelbaum (Mr.

Teitelbaum), legal counsel for Monsour Medical Center, responded

to that subpoena and sent a copy of his response to petitioner.

     Mr. Monsour met with Mr. Winschel several times to discuss

the issues in the case for the taxable years at issue.13    Two of

those meetings were dinner meetings (dinner meetings) that took

place at the residence of petitioner and Mr. Monsour.    Petitioner

was present at those dinner meetings.

     Petitioner knew that for two of the three taxable years

1991, 1992, and 1993 respondent made a determination of omitted

income relating to petitioner’s law practice bank account in an

amount between $8,000 and $10,000.     (We shall refer collectively

to those two determinations as determinations relating to peti-

tioner’s law practice bank account.)    At petitioner’s request,

Mr. Winschel conceded the determinations relating to petitioner’s

law practice bank account.

     Mr. Laubach met with Mr. Winschel several times to discuss

settling the case for the taxable years at issue.    Mr. Laubach

spent a lot of time in an attempt to reach a settlement of that


     13
      The record does not disclose how many times Mr. Monsour
met in person with Mr. Winschel to discuss the case for the
taxable years at issue or how many times, if any, they discussed
that case over the telephone and/or in written correspondence or
electronic mail.
                                - 25 -

case.     That was because the issues were factually intensive and

required Mr. Laubach to ask Mr. Winschel to provide him with

certain documents that Mr. Winschel claimed supported the posi-

tions of petitioner and Mr. Monsour with respect to the case for

the taxable years at issue.     Based upon certain documentation

that Mr. Winschel provided to Mr. Laubach, respondent conceded

respondent’s determination of omitted income with respect to

Georgetown Square for one or more of the taxable years 1989,

1991, 1992, and 1993 not disclosed by the record.14

     On October 8, 1998, pursuant to the agreement of the par-

ties, the Court entered a decision in the case for the taxable

years at issue (stipulated decision in the case for the taxable

years at issue).     That decision provided as follows:

             Pursuant to agreement of the parties in this case,
     it is

          ORDERED and DECIDED: That there are deficiencies
     in income tax due from the petitioners for the taxable
     years 1989, 1991, 1992, and 1993 in the amounts of
     $31,349, $8,943, $9,773, and $28,578, respectively.

          That the following statement shows the petition-
     ers’ income tax liability for the taxable year 1990:




     14
      The record does not establish whether respondent conceded
in full and/or compromised in part any of the other determina-
tions in the notice for the taxable years at issue.
                                  - 26 -

                 Tax liability                      $73,524

                 Tax assessed:
                           Paid        $50,853.78
                       Not Paid         29,956.22

                                                     80,810

                 Deficiency (to be assessed)         None

          That there are additions to the tax due from the
     petitioners under the provisions of I.R.C. § 6651(a)(1)
     for the taxable years 1989, 1992, and 1993 in the a-
     mounts of $7,172, $1,520, and $1,458, respectively.

          That there are penalties due from the petitioners
     under the provisions of I.R.C. § 6662(a) for the tax-
     able years 1989, 1991, 1992, and 1993 in the amounts of
     $2,165, $1,789, $426, and $3,923, respectively.

          That there are no additions to the tax due from
     the petitioners under the provisions of I.R.C.
     § 6651(a)(1) for the taxable years 1990 and 1991.

           That there is no penalty due from the petitioners
     under the provisions of I.R.C. § 6662(a) for the year
     1990.

     At a time not disclosed by the record, petitioner and Mr.

Monsour jointly filed Form 1040 for their taxable year 1998 (1998

joint return).   At the time of the trial in this case in Septem-

ber 2003, petitioner and Mr. Monsour had an unpaid liability of

$60,000 with respect to their 1998 joint return.

     On February 12, 2001, petitioner filed with respondent Form

8857, Request for Innocent Spouse Relief (And Separation of

Liability and Equitable Relief), with respect to each of the

taxable years 1989, 1990, 1991, 1992, and 1993 (petitioner’s Form

8857).   Petitioner attached the following statement to peti-
                                - 27 -

tioner’s Form 8857:

                              ATTACHMENT

          The understatement in tax for the periods in ques-
     tion were due to investments and business activities of
     my husband, [about] all of which I had no information
     or knowledge.

          During these periods I had employment and educa-
     tional pursuits totally unrelated to my husband’s in-
     vestment and business activities. All of the under-
     statements in question were the results of an audit of
     our tax return.

     On September 12, 2002, in response to petitioner’s Form

8857, respondent issued to petitioner a notice of determination.

In that notice, respondent denied petitioner’s request for relief

under section 6015.

     The liability for each of the taxable years 1989, 1991,

1992, and 1993 is from the assessment that respondent made for

each such year based upon the stipulated decision in the case for

the taxable years at issue.    The liability for the taxable year

1990 is from the unpaid tax shown due in the original 1990 joint

return, plus interest thereon as provided by law, which respon-

dent assessed, plus an additional assessment of $3,978 to which

petitioner and Mr. Monsour agreed after the examination of the

taxable years at issue began and before respondent issued the

notice for the taxable years at issue.

                               OPINION

Burden of Proof

     The parties agree that petitioner bears the burden of prov-
                              - 28 -

ing that she is entitled to relief under section 6015(b) and (f).

The parties have a disagreement over who bears the burden of

showing whether section 6015(g)(2) precludes petitioner from the

relief that she claims under section 6015.    According to peti-

tioner, respondent bears the burden of proof under section

6015(g)(2).15

     Except where section 6015 provides otherwise, see sec.

6015(c)(3)(A)(ii), (c)(3)(C), (d)(3)(C), petitioner bears the

burden of proof under that section.    See Rule 142(a); see also

Jonson v. Commissioner, 118 T.C. 106, 113 (2002), affd. 353 F.3d

1181 (10th Cir. 2003).   Section 6015 does not provide that re-

spondent bears the burden of proof under section 6015(g)(2).    We

conclude that petitioner bears the burden of proof under that

section.



     15
      Petitioner argues, in the alternative, that respondent
should be precluded from relying on sec. 6015(g)(2) because
respondent did not raise that provision in respondent’s plead-
ings. We reject petitioner’s alternative argument regarding sec.
6015(g)(2). Although respondent did not raise that section in
respondent’s pleadings, respondent argued in the pretrial memo-
randum that respondent submitted to the Court that sec.
6015(g)(2) precluded petitioner from relief under sec. 6015, and
petitioner argued in the pretrial memorandum that petitioner
submitted to the Court that sec. 6015(g)(2) did not preclude
petitioner from relief under sec. 6015. Moreover, at trial, the
parties adduced evidence relating to petitioner’s participation
in the case for the taxable years at issue. On the record before
us, we find that the parties tried the issue under sec.
6015(g)(2) by consent and that that issue is treated in all
respects as having been raised in respondent’s pleadings. See
Rule 41(b)(1); see also Pierce v. Commissioner, T.C. Memo. 2003-
188.
                              - 29 -

Record in the Instant Case

     In support of her position in the instant case, petitioner

relies principally on her own testimony and the testimony of Mr.

Monsour.   We did not find the testimony of petitioner and Mr.

Monsour to be credible in certain material respects.   We shall

not rely on any such testimony to support petitioner’s position

in the instant case.

     The testimony of petitioner and Mr. Monsour on which we are

willing to rely and the documentary evidence16 that petitioner

introduced into the record create a record that presents signifi-

cant proof problems for petitioner.    For example, the record does

not establish (1) the taxable year or years (i.e., 1989, 1991,

1992, and/or 1993)17 to which each of the determinations about

which we are aware18 pertains and (2) the portion, if any, of the


     16
      Petitioner did not proffer into evidence certain documen-
tary evidence (e.g., the notice for the taxable years at issue)
that is material to petitioner’s position in the instant case.
     17
      The parties stipulated that the liability for the taxable
year 1990 is from the unpaid tax shown due in the original 1990
joint return, plus interest thereon as provided by law, which
respondent assessed, plus an additional assessment of $3,978 to
which petitioner and Mr. Monsour agreed after the examination of
the taxable years at issue began and before respondent issued the
notice for the taxable years at issue.
     18
      Although the record shows that respondent made certain
determinations in the notice for the taxable years at issue with
respect to the taxable years 1989, 1991, 1992, and 1993, the
record does not establish whether those were the only determina-
tions that respondent made in that notice. See supra note 9.
Except for a determination of omitted income with respect to
                                                    (continued...)
                                 - 30 -

deficiency or understatement19 for each of those years that is

attributable to each such determination.20

     Although we believe that Mr. Winschel21 would have been able

to fill in most, if not all, of the significant gaps in the

record relating to the foregoing and certain other matters mate-

rial to petitioner’s position in this case, petitioner did not

call him to testify on her behalf.        We presume that petitioner

did not call Mr. Winschel as a witness because his testimony

would not have been favorable to petitioner’s position.       See

Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165

(1946), affd. 162 F.2d 513 (10th Cir. 1947).



     18
      (...continued)
Georgetown Square for one or more of those years not disclosed by
the record that respondent conceded, the record also does not
establish whether respondent conceded in full and/or compromised
in part in the case for the taxable years at issue any of the
determinations in that notice. See supra note 14.
     19
      Petitioner claims relief under sec. 6015(b) and, in the
alternative, under sec. 6015(f) for each of the taxable years
1989, 1991, 1992, and 1993. She also claims relief under sec.
6015(f) for the taxable year 1990. Sec. 6015(b) uses, inter
alia, the term “understatement”, and sec. 6015(f) uses, inter
alia, the term “deficiency”. For purposes of this case, the
meaning of those terms is the same. See secs. 6211, 6015(b)(3).
For convenience, we shall use the term “understatement”.
     20
          See supra notes 10 through 12.
     21
       Mr. Winschel represented petitioner and Mr. Monsour with
respect to, inter alia, respondent’s examination of the taxable
years at issue, the Appeals Office consideration of those years,
respondent’s issuance of the notice for those years, and the case
that petitioner and Mr. Monsour commenced in the Court for those
years.
                                 - 31 -

Section 6015(g)(2)

     Section 6015(g)(2) provides:

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

          *         *       *       *       *       *       *

              (g) Credits and Refunds.--

          *         *       *       *       *       *       *

          (2) Res judicata.--In the case of any election
     under subsection (b) or (c), if a decision of a court
     in any prior proceeding for the same taxable year has
     become final, such decision shall be conclusive except
     with respect to the qualification of the individual for
     relief which was not an issue in such proceeding. The
     exception contained in the preceding sentence shall not
     apply if the court determines that the individual par-
     ticipated meaningfully in such prior proceeding.

     The principal dispute between the parties under section

6015(g)(2) is whether petitioner participated meaningfully in the

case for the taxable years at issue.22     In support of petitioner’s

position that she did not participate meaningfully in that case,

she argues:23


     22
      In addition to disputing whether petitioner participated
meaningfully in the case for the taxable years at issue, peti-
tioner argues that “By its very language, Section 6015(g)(2) is
inapplicable to actions under Section 6015(f), being only appli-
cable to ‘elections under subsections (b) and (c)’. See Section
6015(g)(2).” We reject petitioner’s argument. The Court has
held that sec. 6015(g)(2) applies to claims for relief under sec.
6015(b) and (c) as well as sec. 6015(f). Thurner v. Commis-
sioner, 121 T.C. 43, 51-52 (2003).
     23
      Throughout petitioner’s briefs, petitioner relies on,
inter alia, final regulations issued under sec. 6015 that are
applicable for elections under sec. 6015(b) and (c) or requests
                                                    (continued...)
                             - 32 -

          Petitioner and her husband were represented by
     Attorney William Winschel in the * * * [case for the
     taxable years at issue]. Petitioner’s husband was
     involved in all meetings with the attorney * * * while
     Petitioner was not involved at all. * * * Petitioner’s
     husband did not discuss the case with her * * * and
     ultimately had the case settled by Attorney Winschel.
     * * * Only two (2) minor items affected Petitioner
     directly in that case, namely two (2) years of alleg-
     edly omitted attorney income, neither of which could
     have resulted in any additional tax liability.
     * * * Accordingly, Petitioner’s participation could not
     be meaningful in the * * * [case for the taxable years
     at issue].

     Respondent counters:

          Petitioner argues that she was not personally
     “involved” in the prior proceeding. * * * petitioner
     * * * told [Mr.] Winschel to concede an issue. She
     also received information involved in the settlement.
     * * * Dr. Monsour testified that petitioner, Dr.
     Monsour and attorney Winschel were present at several
     dinner meetings at the Monsour home. The purpose of
     the meetings was to discuss the Tax Court case. * * *

          *     *       *       *       *       *       *

          Furthermore, petitioner chose not to call [Mr.]
     Winschel as a witness. * * * [Mr.] Winschel could have
     testified as to petitioner’s participation in the prior
     proceeding. From the failure to call [Mr.] Winschel to
     testify it can only be inferred that [Mr.] Winschel’s
     testimony, if given, would have been unfavorable to
     petitioner. * * *

     Although Mr. Winschel could have shed light on the extent of

petitioner’s participation in the case for the taxable years at

issue, as discussed above, petitioner chose not to call him to


     23
      (...continued)
for relief under sec. 6015(f) that are filed on or after July 18,
2002. Sec. 1.6015-9, Income Tax Regs. Those final regulations
are not applicable in the instant case. That is because peti-
tioner filed petitioner’s Form 8857 on Feb. 12, 2001.
                              - 33 -

testify on her behalf, from which we have concluded that his

testimony would not have been favorable to her position.   See

Wichita Terminal Elevator Co. v. Commissioner, supra.   Instead,

petitioner relies on Mr. Monsour’s testimony to support her

contentions that Mr. Monsour, and not petitioner, was involved in

all of the meetings with Mr. Winschel with respect to the case

for the taxable years at issue and that Mr. Monsour did not

discuss that case with her.   We did not find credible, and we

shall not rely on, Mr. Monsour’s testimony regarding who was

involved in the meetings with Mr. Winschel with respect to the

case for the taxable years at issue and whether Mr. Monsour

discussed that case with petitioner.

     Petitioner did not claim in the petition24 for the taxable

years at issue that she was entitled to relief under section

6013(e)25 with respect to any of the taxable years at issue.26    Nor


     24
      Petitioner and Mr. Monsour filed the petition for the
taxable years at issue on Dec. 16, 1997.
     25
      In 1998, Congress repealed sec. 6013(e) and replaced it
with sec. 6015. Internal Revenue Service Restructuring and
Reform Act of 1998 (RRA 1998), Pub. L. 105-206, sec. 3201, 112
Stat. 734. Sec. 6015 applies to any liability for tax remaining
unpaid as of July 22, 1998. RRA 1998 sec. 3201(g)(1), 112 Stat.
740.
     26
      Petitioner does not, and could not reasonably, claim that
she was unaware of provisions in the Code granting relief in
certain circumstances from joint and several liability. In the
petition for the taxable years 1987 and 1988, petitioner and Mr.
Monsour alleged, inter alia, that respondent erred in failing to
conclude that petitioner is entitled to relief under sec.
                                                    (continued...)
                              - 34 -

did petitioner make a claim at any other time while the case for

the taxable years at issue was pending in the Court, including

during the period July 22 to October 8, 1998,27 that she was

entitled to relief from joint and several liability with respect

to any of those years.   Petitioner and Mr. Monsour agreed with

respondent that she was jointly and severally liable for defi-

ciencies in, additions to, and penalties on tax that totaled

$40,686, $10,732, $11,719, and $33,959 for the taxable years

1989, 1991, 1992, and 1993, respectively, and that the Court

should enter a decision to that effect.28   Under such circum-

stances, it strains credulity that petitioner, an attorney, would

have agreed to the stipulated decision that the Court entered in

the case for the taxable years at issue without having meaning-

fully participated in discussions about that case with Mr.



     26
      (...continued)
6013(e). The stipulated decision in the case for the taxable
years 1987 and 1988 did not grant petitioner relief under that
section. Moreover, petitioner and Mr. Monsour were represented
by Mr. Winschel in the case for the taxable years at issue, and
there is no suggestion in the record that there was any misunder-
standing on the part of petitioner, Mr. Winschel, or Mr. Laubach,
respondent’s counsel in that case, which precluded petitioner
from raising a claim for relief from joint and several liability.
     27
      On Oct. 8, 1998, the Court entered the stipulated decision
in the case for the taxable years at issue.
     28
      The stipulated decision in the case for the taxable years
at issue showed that there was no addition to tax due from
petitioner and Mr. Monsour for the taxable year 1991. That
decision also showed $29,956.22 in unpaid tax due from petitioner
and Mr. Monsour for the taxable year 1990.
                                 - 35 -

Winschel and/or Mr. Monsour or otherwise having meaningfully

participated in that case.29

     Petitioner relies on Mr. Laubach’s testimony, the 1991 joint

return, the 1992 joint return, and the 1993 joint return to

support her contention that only “two (2) years of allegedly

omitted attorney income” directly affected petitioner in the case

for the taxable years at issue, viz., respondent’s determinations

in the notice that there was income relating to petitioner’s law

practice bank account that petitioner and Mr. Monsour did not

report in their joint returns for two of the three taxable years

1991, 1992, and 1993.30    Our resolution of the question whether

petitioner participated meaningfully in the case for the taxable

years at issue within the meaning of section 6015(g)(2) does not

depend on how many determinations in the notice for those years

“affected Petitioner directly”.31    Petitioner filed jointly with


     29
      It is noteworthy that Mr. Teitelbaum, legal counsel for
Monsour Medical Center, sent to petitioner, and not to Mr.
Monsour and not even to Mr. Monsour and petitioner, a copy of his
response to the subpoena that respondent served on Monsour
Medical Center in the case for the taxable years at issue with
respect to a determination of omitted interest income that
respondent made in the notice for the taxable years at issue for
one or more of the taxable years 1989, 1991, 1992, and 1993 with
respect to that entity.
     30
      The record does not establish, and petitioner does not
even allege, for which two of the three taxable years 1991, 1992,
and 1993 respondent made the determination of unreported income
relating to petitioner’s law practice bank account.
     31
          In any event, we find that neither Mr. Laubach’s testimony
                                                       (continued...)
                                - 36 -

Mr. Monsour a return for each of the taxable years at issue and

was jointly and severally liable for the tax shown due in each of

those returns and for any deficiency in, addition to, and penalty

on the tax for each of those years to which petitioner and Mr.

Monsour and respondent agreed and which the Court sustained in

the stipulated decision in the case for the taxable years at

issue.32

     Based upon our examination of the entire record before us,

we find that petitioner has failed to carry her burden of estab-

lishing that she did not participate meaningfully in the case for

the taxable years at issue and that the stipulated decision in

that case, which did not grant petitioner relief from joint and

several liability, is not conclusive in the instant case.    See

sec. 6015(g)(2).     On that record, we hold that section 6015(g)(2)

precludes petitioner from the relief that she claims under sec-

tion 6015(b) and (f).     See Thurner v. Commissioner, 121 T.C. 43,

51-52 (2003).



     31
      (...continued)
nor the joint returns for the taxable years 1991, 1992, and 1993
support petitioner’s contention that the determinations relating
to petitioner’s law practice bank account were the only determi-
nations in the notice for the taxable years at issue that “af-
fected Petitioner directly”. We have found that respondent made
determinations in that notice of omitted income relating to the
joint bank accounts of petitioner and Mr. Monsour and relating to
petitioner’s separate bank account. At a minimum, such determi-
nations also “affected Petitioner directly”.
     32
          See supra note 28.
                                  - 37 -

     For the sake of completeness, we shall address whether,

assuming arguendo that we had not held that section 6015(g)(2)

precludes petitioner from the relief that she claims under section

6015(b) and (f), petitioner would be entitled to such relief.

Section 6015(b)

     Introduction

     Petitioner claims that she is entitled to relief under

section 6015(b) for each of the taxable years 1989, 1991, 1992,

and 1993.33     Section 6015(b) provides:

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

          *         *       *       *       *       *       *

          (b) Procedures For Relief From Liability Applicable
     to All Joint Filers.--

                   (1) In general.–-Under procedures prescribed
              by the Secretary, if--

                        (A) a joint return has been made for a
                   taxable year;

                        (B) on such return there is an under-
                   statement of tax attributable to erroneous
                   items of 1 individual filing the joint return;

                        (C) the other individual filing the joint
                   return establishes that in signing the return
                   he or she did not know, and had no reason to
                   know, that there was such understatement;

                        (D) taking into account all the facts and


     33
      In the alternative, petitioner claims relief under sec.
6015(f) for each of the taxable years 1989, 1991, 1992, and 1993.
She also claims relief under that section for the taxable year
1990.
                                 - 38 -

               circumstances, it is inequitable to hold the
               other individual liable for the deficiency in
               tax for such taxable year attributable to such
               understatement; and

                     (E) the other individual elects (in such
               form as the Secretary may prescribe) the bene-
               fits of this subsection not later than the
               date which is 2 years after the date the Sec-
               retary has begun collection activities with
               respect to the individual making the election,
               * * *

      Section 6015(b)(1) is similar to section 6013(e)(1).      We may

look at cases interpreting section 6013(e)(1) for guidance when

analyzing parallel provisions of section 6015.    See Jonson v.

Commissioner, 118 T.C. at 119.    The failure by a spouse requesting

relief (requesting spouse) under section 6015(b) to satisfy any of

the requirements of that section prevents such spouse for qualify-

ing for such relief.     Alt v. Commissioner, 119 T.C. 306, 313

(2002), affd. 101 Fed. Appx. 34 (6th Cir. 2004).

     The parties agree that petitioner satisfies section

6015(b)(1)(A) and (E).    Petitioner contends, and respondent

disputes, that she satisfies section 6015(b)(1)(B), (C), and (D).

     Section 6015(b)(1)(B)

     In order to satisfy section 6015(b)(1)(B), petitioner must

establish that there is an understatement of tax for each of the

taxable years 1989, 1991, 1992, and 1993 that is attributable to

erroneous items of Mr. Monsour.    It is petitioner’s position that

          The testimony of * * * [Mr. Monsour and Mr.
     Laubach] delineated the issues before the Court that led
     to the understatements [sic] for each year * * *. All
                                 - 39 -

     of those issues (except the minor issue involving Peti-
     tioner’s law office income adjustment) involved only
     Petitioner’s husband. Clearly, all of the understate-
     ments could only be attributable to the husband’s activ-
     ities, namely his investments or omissions from income,
     since only he was involved in those activities.

     Respondent counters that

     a portion of the deficiencies for two years were from
     unreported income from petitioner’s law practice and not
     solely from Dr. Monsour. Also, for three years of
     deficiencies, it is more likely than not that unreported
     income reflected in deposits to joint accounts of peti-
     tioner and Dr. Monsour and single accounts in the name
     of petitioner are part of the deficiencies.

          * * * [Moreover,] there is no evidence as to the
     amount of an understatement of tax now due for a partic-
     ular year as to a specific erroneous item of her hus-
     band. * * *

     The determinations about which we are aware34 that respondent

made in the notice for the taxable years at issue relate to the

joint bank accounts of petitioner and Mr. Monsour, petitioner’s

separate bank account, petitioner’s law practice bank account,

Monsour Medical Center, Laurel Valley Farms, the Three Crowns

Hotel, Azure Tides, Inc., Georgetown Square,35 the Three Crowns



     34
          See supra notes 9 through 12 and 18 and accompanying text.
     35
      We have found that respondent conceded respondent’s deter-
mination of omitted income with respect to Georgetown Square for
one or more of the taxable years 1989, 1991, 1992, and 1993 not
disclosed by the record. In the notice for the taxable years at
issue, respondent also made a determination of an erroneous
deduction with respect to Georgetown Square for one or more of
the taxable years 1989, 1991, 1992, and 1993 not disclosed by the
record. Hereinafter, our references to the determination with
respect to Georgetown Square shall be to a determination of an
erroneous deduction for one or more of those years.
                                 - 40 -

Hotel Back Court, American Supply, and MFS Lifetime.     As discussed

above, the record does not establish, inter alia, (1) the taxable

year or years (i.e., 1989, 1991, 1992, and/or 1993) to which each

of the determinations about which we are aware pertains and

(2) the portion, if any, of the understatement for each of those

years that is attributable to each such determination.     On the

record before us, we are unable to find whether or not each of

respondent’s determinations about which we are aware relates to an

erroneous item under section 6015(b)(1)(B) that gave rise to a

portion or all of an understatement for one or more of the taxable

years 1989, 1991, 1992, and 1993.

     Assuming arguendo that each of respondent’s determinations

about which we are aware had related to such an erroneous item, we

turn first to petitioner’s contention that the only such erroneous

items that involved her were with respect to petitioner’s law

practice bank account.     We have found that, in addition to the

determinations relating to petitioner’s law practice bank account,

the determinations relating to the joint bank accounts of peti-

tioner and Mr. Monsour and petitioner’s separate bank account

affected petitioner directly.36    On the record before us, we find

that petitioner has failed to establish that the determinations

with respect to petitioner’s law practice bank account, the joint

bank accounts of petitioner and Mr. Monsour, and petitioner’s


     36
          See supra note 31.
                                - 41 -

separate bank account related to erroneous items of Mr. Monsour

under section 6015(b)(1)(B).

     We turn now to petitioner’s contention that each of the

determinations relating to Monsour Medical Center, Laurel Valley

Farms, the Three Crowns Hotel, Azure Tides, Inc., Georgetown

Square, the Three Crowns Hotel Back Court, American Supply, and

MFS Lifetime did not involve her.   Assuming arguendo that those

determinations had related to erroneous items of Mr. Monsour that

gave rise to a portion or all of an understatement for one or more

of the taxable years 1989, 1991, 1992, and 1993 (assumed erroneous

items of Mr. Monsour), on the record before us, we find that

petitioner has failed to establish (1) the taxable year or years

(i.e., 1989, 1991, 1992, and/or 1993) to which such assumed

erroneous items of Mr. Monsour pertain and (2) the portion of the

understatement for each of those years that is attributable to

such assumed erroneous items.   We have found that petitioner has

failed to establish that the determinations relating to peti-

tioner’s law practice bank account, the joint bank accounts of

petitioner and Mr. Monsour, and petitioner’s separate bank account

related to erroneous items of Mr. Monsour under section

6015(b)(1)(B).   Consequently, those determinations may have

related to erroneous items of petitioner that gave rise to a

portion or all of an understatement for one or more of the taxable

years 1989, 1991, 1992, and 1993.
                                 - 42 -

     Based upon our examination of the entire record before us, we

find that petitioner has failed to carry her burden of establish-

ing that there is an understatement of tax for any of the taxable

years 1989, 1991, 1992, and 1993 that is attributable to erroneous

items of Mr. Monsour.   On that record, we further find that

petitioner has failed to satisfy section 6015(b)(1)(B) for any of

those years.37

     Conclusion

     Based upon our examination of the entire record before us, we

find that petitioner has failed to carry her burden of establish-

ing that she is entitled to relief under section 6015(b) for any

of the taxable years 1989, 1991, 1992, and 1993.

Section 6015(f)

     Petitioner claims, in the alternative, that she is entitled

to relief under section 6015(f) for each of the taxable years

1989, 1991, 1992, and 1993.   She also claims that she is entitled

to relief under that section for the taxable year 1990.   We review

respondent’s denial of relief under section 6015(f) for abuse of

discretion.   Butler v. Commissioner, 114 T.C. 276, 292 (2000).

     Section 6015(f) provides:



     37
      Assuming arguendo that we had found that petitioner satis-
fied sec. 6015(b)(1)(B), on the record before us, we find for the
reasons set forth below in our consideration of petitioner’s
position with respect to sec. 6015(f) that petitioner has failed
to establish that she satisfies sec. 6015(b)(1)(C) and (D) for
any of the taxable years 1989, 1991, 1992, and 1993.
                                   - 43 -

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

           *         *       *       *       *       *       *

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

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

                    (2) relief is not available to such individual
               under subsection (b) or (c),

     the Secretary may relieve such individual of such lia-
     bility.

     We have found that petitioner is not entitled to relief under

section 6015(b) for any of the taxable years 1989, 1991, 1992, and

1993.     The parties agree that petitioner is not entitled to relief

under section 6015(b) for the unpaid liability relating to the

taxable year 1990.       The parties also agree that petitioner is not

entitled to relief under section 6015(c) for any of the taxable

years at issue.       We conclude that section 6015(f)(2) is satisfied

with respect to each of those years.

     As directed by section 6015(f), respondent has prescribed

procedures in Revenue Procedure 2000-15, 2000-1 C.B. 447 (Revenue

Procedure 2000-15),38 that are to be used in determining whether it


     38
      We note that Rev. Proc. 2003-61, 2003-32 I.R.B. 296 (Reve-
nue Procedure 2003-61), superseded Revenue Procedure 2000-15.
Revenue Procedure 2003-61 is effective for requests for relief
under sec. 6015(f) which were filed on or after Nov. 1, 2003, and
for requests for such relief which were pending on, and for which
                                                    (continued...)
                              - 44 -

would be inequitable to find the requesting spouse liable for part

or all of the liability in question.39   Section 4.01 of Revenue

Procedure 2000-15 sets forth the following seven conditions

(threshold conditions) which must be satisfied before the IRS will

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

          (1) The requesting spouse filed a joint return for
     the taxable year for which relief is sought;

          (2) Relief is not available to the requesting
     spouse under § 6015(b) or 6015(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 spouse;

          (4) * * * the liability remains unpaid * * *;

          (5) No assets were transferred between the spouses
     filing the joint return as part of a fraudulent scheme
     by such spouses;

          (6) There were no disqualified assets transferred
     to the requesting spouse by the nonrequesting spouse.
     If there were disqualified assets transferred to the
     requesting spouse by the nonrequesting spouse, relief
     will be available only to the extent that the liability
     exceeds the value of such disqualified assets. For this
     purpose, the term “disqualified asset” has the meaning


     38
      (...continued)
no preliminary determination letter had been issued as of, that
date. Id. sec. 7. Revenue Procedure 2003-61 is not applicable
in the instant case. That is because (1) petitioner filed
petitioner’s Form 8857 on Feb. 12, 2001, and (2) petitioner’s
Form 8857 was not pending on Nov. 1, 2003.
     39
      The factors that we consider in determining whether it
would be inequitable for purposes of sec. 6015(f) are the same as
the factors that we consider in determining whether it would be
inequitable for purposes of sec. 6015(b)(1)(D). Alt v. Commis-
sioner, 119 T.C. 306, 316 (2002), affd. 101 Fed. Appx. 34 (6th
Cir. 2004).
                              - 45 -

     given such term by § 6015(c)(4)(B); and

          (7) The requesting spouse did not file the return
     with fraudulent intent.

     If a requesting spouse satisfies all of the applicable

threshold conditions, section 4.01 of Revenue Procedure 2000-15

provides that that spouse is entitled to relief under section

6015(f) for part or all of the liability in question if, taking

into account all of the facts and circumstances, the IRS deter-

mines that it would be inequitable to hold the requesting spouse

liable for such liability.

     On brief, petitioner addresses only the threshold condition

set forth in section 4.01(6) of Revenue Procedure 2000-15.

According to petitioner,

     The only condition arguably not satisfied is item six in
     regard to the property transfers made to Petitioner by
     her husband. As the parties testified, however, those
     transfers * * * were made pursuant to a prenuptial
     agreement. * * *

          The transfers in question would not be [made] with
     “disqualified assets” as that term is defined in Section
     6015(c)(4)(B) since the property transfers would have
     occurred more than one (1) year before the deficiencies
     were proposed. See Section 6015(c)(4)(B)(ii)(I). * * *

     The only threshold conditions that respondent argues peti-

tioner does not satisfy are those set forth in section 4.01(5)

through (7) of Revenue Procedure 2000-15.   According to respon-

dent,

          As to conditions 5 and 6, * * * There is no evi-
     dence that * * * [Mr. Monsour’s transfers], when made,
     were not part of a scheme to defraud creditors or that
                                 - 46 -

     the transfers, when made, did not have as their princi-
     pal purpose the avoidance of the payment of tax. Many
     of the transfers probably took place within the prohib-
     ited period of I.R.C. §6015(c)(4)(B)(ii).

          Threshold condition 7 of Section 4.01 requires
     petitioner to show that she did not file the return with
     fraudulent intent. Petitioner testified that the ap-
     proximately $9,000 of omitted income for each of two
     years from her law practice was conceded by her in the
     settlement of the prior Tax Court case because in her
     view the $18,000 of unreported income was a small a-
     mount. This statement coupled with the unreported
     income is some evidence of fraud on her part.

     With respect to the threshold condition set forth in section

4.01(5) of Revenue Procedure 2000-15 (i.e., no assets were trans-

ferred between the spouses filing the joint return as part of a

fraudulent scheme by such spouses), we have found that, pursuant

to the prenuptial agreement, starting around 1989 petitioner asked

Mr. Monsour to make her the joint owner of at least certain of Mr.

Monsour’s assets40 and that Mr. Monsour agreed and did so.    On the

record before us, we find that Mr. Monsour did not transfer any

assets to petitioner as part of a fraudulent scheme by such

spouses.     On that record, we further find that for each of the

taxable years at issue petitioner satisfies the threshold condi-

tion set forth in section 4.01(5) of Revenue Procedure 2000-15.

     With respect to the threshold condition set forth in section

4.01(6) of Revenue Procedure 2000-15 (i.e., there were no disqual-

ified assets transferred to the requesting spouse by the



     40
          See supra note 3.
                                  - 47 -

nonrequesting spouse), the term “disqualified asset” is defined in

section 6015(c)(4)(B)41 as follows:

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

          *         *       *       *       *       *       *

          (c) Procedures To Limit Liability for Taxpayers No
     Longer Married or Taxpayers Legally Separated or Not
     Living Together.--

                   (4) Liability increased by reason of transfers
              of property to avoid tax.--

          *         *       *       *       *       *       *

                        (B) Disqualified asset. For purposes of
                   this paragraph--

                             (i) In general.--The term “disquali-
                        fied asset” means any property or right
                        to property transferred to an individual
                        making the election under this subsection
                        with respect to a joint return by the
                        other individual filing such joint return
                        if the principal purpose of the transfer
                        was the avoidance of tax or payment of
                        tax.

                             (ii) Presumption.--

                                  (I) In general.--For purposes
                             of clause (i), except as provided in
                             subclause (II), any transfer which
                             is made after the date which is 1
                             year before the date on which the
                             first letter of proposed deficiency
                             which allows the taxpayer an oppor-
                             tunity for administrative review in
                             the Internal Revenue Service Office


     41
      Threshold condition (6) of sec. 4.01 of Revenue Procedure
2000-15 provides that, for purposes of that revenue procedure,
the term “disqualified asset" has the meaning given to such term
by sec. 6015(c)(4)(B).
                                   - 48 -

                              of Appeals is sent shall be presumed
                              to have as its principal purpose the
                              avoidance of tax or payment of tax.

                                   (II) Exceptions.–-Subclause
                              (I) shall not apply to any transfer
                              * * * which an individual estab-
                              lishes did not have as its principal
                              purpose the avoidance of tax or pay-
                              ment of tax.

     Petitioner has failed to establish the date on which the IRS

sent to her the first letter of proposed deficiency which allowed

her an opportunity for administrative review in respondent’s

Appeals Office.     However, we have found that, pursuant to the

prenuptial agreement, starting around 1989 petitioner asked Mr.

Monsour to make her the joint owner of at least certain of Mr.

Monsour’s assets42 and that Mr. Monsour agreed and did so.      On the

record before us, we find that the principal purpose of Mr.

Monsour’s transfers to petitioner was not the avoidance of tax or

payment of tax.     See sec. 6015(c)(4)(B)(ii).   On that record, we

further find that petitioner has established that the presumption

in section 6015(c)(4)(B)(ii) is not applicable in this case.         On

the record before us, we find that Mr. Monsour did not transfer

any disqualified assets to petitioner.      On that record, we further

find that for each of the taxable years at issue petitioner

satisfies the threshold condition set forth in section 4.01(6) of

Revenue Procedure 2000-15.



     42
          See supra note 3.
                               - 49 -

     With respect to the threshold condition set forth in section

4.01(7) of Revenue Procedure 2000-15 (i.e., the requesting spouse

did not file the joint return for each of the taxable years at

issue with fraudulent intent), the mere failure to report income

is not sufficient to establish fraud.   Petzoldt v. Commissioner,

92 T.C. 661, 700 (1989).   On the record before us, we find that

petitioner did not file any of the joint returns for any of the

taxable years at issue with fraudulent intent.   On that record, we

further find that for each of the taxable years at issue peti-

tioner satisfies the threshold condition set forth in section

4.01(7) of Revenue Procedure 2000-15.

     Where, as here, the requesting spouse satisfies the threshold

conditions set forth in section 4.01 of Revenue Procedure 2000-15,

section 4.02 of that revenue procedure sets forth the circum-

stances, in any case where a liability reported in a joint return

is unpaid, under which the IRS ordinarily will grant relief to

that spouse under section 6015(f).   The only taxable year for

which there is a liability reported in a joint return which is

unpaid is 1990.43   Petitioner does not rely on section 4.02 of

Revenue Procedure 2000-15 in support of her claim for relief from

that unpaid liability.   Instead, she relies on section 4.03 of



     43
      The liabilities for the remaining taxable years at issue
(i.e., 1989, 1991, 1992, and 1993) arose from respondent’s
assessments based upon the stipulated decision in the case for
the taxable years at issue.
                                 - 50 -

that revenue procedure, on which she also relies in support of her

claim for relief with respect to each of the taxable years 1989,

1991, 1992, and 1993.

     Section 4.03 of Revenue Procedure 2000-15 provides a partial

list of positive and negative factors which respondent is to take

into account in considering whether respondent will grant an

individual full or partial equitable relief under section 6015(f).

As Revenue Procedure 2000-15 makes clear, no single factor is to

be determinative in any particular case, all factors are to be

considered and weighed appropriately, and the list of factors is

not intended to be exhaustive.    Rev. Proc. 2000-15 sec. 4.03,

2000-1 C.B. 447, 448.

     We turn now to the application of section 4.03 of Revenue

Procedure 2000-15 to this case.    Section 4.03(1) of Revenue

Procedure 2000-15 sets forth the following positive factors which

weigh in favor of granting relief under section 6015(f):

          (a) Marital status. The requesting spouse is
     separated * * * or divorced from the nonrequesting
     spouse.

          (b) Economic hardship. The requesting spouse would
     suffer economic hardship (within the meaning of section
     4.02(1)(c) of this revenue procedure) if relief from the
     liability is not granted.

          (c) Abuse. The requesting spouse was abused by the
     nonrequesting spouse, but such abuse did not amount to
     duress.

          (d) No knowledge or reason to know. In the case of
     a liability that was properly reported but not paid, the
     requesting spouse did not know and had no reason to know
                              - 51 -

     that the liability would not be paid. In the case of a
     liability that arose from a deficiency, the requesting
     spouse did not know and had no reason to know of the
     items giving rise to the deficiency.

          (e) Nonrequesting spouse’s legal obligation. The
     nonrequesting spouse has a legal obligation pursuant to
     a divorce decree or agreement to pay the outstanding
     liability. This will not be a factor weighing in favor
     of relief if the requesting spouse knew or had reason to
     know, at the time the divorce decree or agreement was
     entered into, that the nonrequesting spouse would not
     pay the liability.

          (f) Attributable to nonrequesting spouse. The
     liability for which relief is sought is solely attribut-
     able to the nonrequesting spouse.

(We shall hereinafter refer to the positive factors set forth in

section 4.03(1)(a), (b), (c), (d), (e), and (f) of Revenue Proce-

dure 2000-15 as the marital status positive factor, the economic

hardship positive factor, the abuse positive factor, the knowledge

or reason to know positive factor, the legal obligation positive

factor, and the attribution positive factor, respectively.)

     With respect to the marital status positive factor set forth

in section 4.03(1)(a) of Revenue Procedure 2000-15, petitioner

does not dispute that that factor is not present in this case.

     With respect to the economic hardship positive factor set

forth in section 4.03(1)(b) of Revenue Procedure 2000-15, peti-

tioner contends that that positive factor is present in this case.

That is because, according to petitioner, “She will not be able to

pay bills as due if relief should not be granted.”

     In determining whether a requesting spouse will suffer
                              - 52 -

economic hardship, section 4.02(1)(c) of Revenue Procedure

2000-15, to which section 4.03(1)(b) of that revenue procedure

refers, requires reliance on rules similar to those provided in

section 301.6343-1(b)(4), Proced. & Admin. Regs.   Section

301.6343-1(b)(4)(i), Proced. & Admin. Regs., generally provides

that an individual suffers an economic hardship if the individual

is unable to pay his or her reasonable basic living expenses.

Section 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 director
     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);

          (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
                                - 53 -


          (F) Any other factor that the taxpayer claims bears
     on economic hardship and brings to the attention of the
     director.

Sec. 301.6343-1(b)(4)(ii), Proced. & Admin. Regs.

     Petitioner presented no evidence as to the nature or the

amounts of the bills that she claims she will be unable to pay if

she is not granted relief in this case.   On the record before us,

we find that petitioner has failed to carry her burden of estab-

lishing that the expenses claimed by petitioner (i.e., expenses

for bills) qualify as basic living expenses within the meaning of

section 301.6343-1(b)(4), Proced. & Admin. Regs.    Assuming

arguendo that the bills claimed by petitioner qualify as basic

living expenses under that section, on the instant record, we find

that petitioner has failed to carry her burden of establishing

that the amounts of her claimed bills are reasonable.    Assuming

arguendo that the amount of the bills claimed by petitioner

qualify as a reasonable amount for basic living expenses, we have

found that Mr. Monsour, and not petitioner, signed the checks to

pay at least certain of the bills relating to the residence of

petitioner and Mr. Monsour.44   On the record before us, we find

that petitioner has failed to carry her burden of establishing

that she will suffer an economic hardship if the Court were to

deny her relief under section 6015(f).    On that record, we further


     44
      Mr. Monsour also signed checks with respect to Mr.
Monsour’s investments as well as checks with respect to the joint
investments of petitioner and Mr. Monsour.
                              - 54 -

find that petitioner has failed to carry her burden of establish-

ing that the economic hardship positive factor set forth in

section 4.03(1)(b) of Revenue Procedure 2000-15 is present in this

case.

     With respect to the abuse positive factor set forth in

section 4.03(1)(c) of Revenue Procedure 2000-15, petitioner does

not dispute that that positive factor is not present in this case.

     With respect to the knowledge or reason to know positive

factor set forth in section 4.03(1)(d) of Revenue Procedure

2000-15, petitioner makes no argument that that positive factor is

present with respect to the taxable year 1990.   On the record

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

of establishing that she did not know, and had no reason to know,

that the liability reported in the original 1990 joint return

would not be paid.

     As for each of the taxable years 1989, 1991, 1992, and 1993,

petitioner argues that the knowledge or reason to know positive

factor is present with respect to each such year.   The parties do

not dispute that the types of facts and circumstances that the

Court should consider in determining whether a requesting spouse

has established that the knowledge or reason to know positive

factor is present are the same types of facts and circumstances

that the Court has considered in determining whether a requesting

spouse has satisfied section 6015(b)(1)(C).   Indeed, in holding
                                 - 55 -

that a requesting spouse did not satisfy section 6015(f), the

Court has relied on, inter alia, its findings that such spouse did

not satisfy section 6015(b)(1)(C).     See, e.g., Butler v. Commis-

sioner, 114 T.C. at 284-286, 292.45

     The determinations about which we are aware46 that respondent

made in the notice for the taxable years at issue relate to the

joint bank accounts of petitioner and Mr. Monsour, petitioner’s

separate bank account, petitioner’s law practice bank account,

Monsour Medical Center, Laurel Valley Farms, the Three Crowns

Hotel, Azure Tides, Inc., Georgetown Square, the Three Crowns

Hotel Back Court, American Supply, and MFS Lifetime.    As discussed

above, the record does not establish, inter alia, (1) the taxable

year or years (i.e., 1989, 1991, 1992, and/or 1993) to which each

of the determinations about which we are aware pertains and

(2) the portion, if any, of the understatement for each of those

years that is attributable to each such determination.47    On the


     45
      See also Bartak v. Commissioner, T.C. Memo. 2004-83; Doyel
v. Commissioner, T.C. Memo. 2004-35.
     46
          See supra notes 9 through 12 and 18.
     47
      Nor does the record establish the nature of the determina-
tions (i.e., omitted income or erroneous deductions) that respon-
dent made in the notice for the taxable years at issue for one or
more of the taxable years 1989, 1991, 1992, and 1993 with respect
to American Supply and MFS Lifetime. MFS Lifetime, in which Mr.
Monsour invested, was a mutual fund. It thus appears that any
determination by respondent relating to MFS Lifetime might have
been a determination of omitted income. However, petitioner has
failed to establish, and the record does not provide a basis for
                                                    (continued...)
                                 - 56 -

record before us, we are unable to find whether or not each of

respondent’s determinations about which we are aware gave rise to

a portion or all of an understatement for one or more of the

taxable years 1989, 1991, 1992, and 1993.

     Assuming arguendo that each of respondent’s determinations

about which we are aware had given rise to a portion or all of an

understatement for one or more of the taxable years 1989, 1991,

1992, and 1993, we turn first to the determinations of omitted

income relating to the joint bank accounts of petitioner and Mr.

Monsour, petitioner’s separate bank account, petitioner’s law

practice bank account, and Monsour Medical Center.   Petitioner

concedes that she was aware of the omitted income with respect to

her law practice bank account.    However, she argues that she did

not know, and had no reason to know, of the other items of omitted

income.   On the record before us, we reject that argument.   As for

the determinations of omitted income relating to the joint bank

accounts of petitioner and Mr. Monsour and petitioner’s separate

bank account, petitioner does not dispute that the record estab-

lishes:   (1) Petitioner’s name was on each of those accounts;

(2) respondent made determinations of omitted income with respect

to each such account; and (3) no other facts relevant to such

omitted income.   On the record before us, we find that petitioner


     47
      (...continued)
us to find, that any determination by respondent relating to MFS
Lifetime was a determination of omitted income.
                               - 57 -

has failed to establish that she did not know, and had no reason

to know, of the transactions relating to the joint bank accounts

of petitioner and Mr. Monsour, petitioner’s separate bank account,

and petitioner’s law practice bank account that we assume arguendo

gave rise to a portion or all of an understatement for one or more

of the taxable years 1989, 1991, 1992, and 1993.

     As for any determination by respondent of omitted income with

respect to Monsour Medical Center, petitioner does not dispute

that the record establishes:   (1) Respondent made a determination

of omitted income in one or more of the taxable years 1989, 1991,

1992, and 1993 with respect to Monsour Medical Center; (2) Mr.

Teitelbaum, legal counsel for Monsour Medical Center, sent to

petitioner a copy of his response to the subpoena that respondent

served on Monsour Medical Center in the case for the taxable years

at issue in order to determine whether there was any omitted

income with respect to that entity; and (3) no other facts rele-

vant to such omitted income.   On the record before us, we find

that petitioner has failed to establish that she did not know, and

had no reason to know, of any transaction relating to Monsour

Medical Center that we assume arguendo gave rise to a portion or

all of an understatement for one or more of the taxable years

1989, 1991, 1992, and 1993.

     We turn now to the determinations of erroneous deductions

relating to Laurel Valley Farms, the Three Crowns Hotel, Azure
                                - 58 -

Tides, Inc., Georgetown Square, and the Three Crowns Hotel Back

Court that we assume arguendo gave rise to a portion or all of an

understatement for one or more of the taxable years 1989, 1991,

1992, and 1993.   We note initially that petitioner contends

inconsistently (1) that she did not know, and had no reason to

know, about Mr. Monsour’s investments and (2) that she knew about

Mr. Monsour’s investments.    We reject petitioner’s claim that she

did not know, and had no reason to know, about Mr. Monsour’s

investments.   Petitioner does not contend, and the record does not

establish, that Mr. Monsour was evasive and deceitful with her

concerning Mr. Monsour’s investments or the joint investments of

petitioner and Mr. Monsour.   Before their marriage on July 3,

1983, petitioner and Mr. Monsour entered into a prenuptial agree-

ment which listed all of Mr. Monsour’s assets.   At all relevant

times, petitioner reviewed and mailed the checks that Mr. Monsour

signed with respect to Mr. Monsour’s investments as well as checks

with respect to the joint investments of petitioner and Mr.

Monsour.   Moreover, at all relevant times, including throughout

the taxable years at issue, petitioner knew about Mr. Monsour’s

monthly trips to check on his Florida investments, and sometimes

she traveled with him on those trips.    At a time not disclosed by

the record after 1986, petitioner questioned Mr. Monsour about

whether Mr. Monsour’s Florida investments were worthwhile, to

which he responded that they were.   In addition, in signing each
                               - 59 -

of the joint returns for 1989, 1991, 1992, and 1993, petitioner,

who received three degrees, including a law degree, from the

University of Pittsburgh, was aware, inter alia, (1) that such

returns claimed substantial losses in Schedules C ranging from

$24,275 to $187,336 and in Schedules E ranging from $58,533 to

$334,910,48 (2) that such claimed losses reduced income reported in

such returns, and (3) that there were (a) no tax shown due in the

1989 joint return or the 1991 joint return, (b) tax shown due of

$1,255 in the 1992 joint return, and (c) tax shown due of $274 in

the 1993 joint return.   Moreover, in signing each of the joint

returns for the taxable years 1989, 1991, 1992, and 1993, peti-

tioner did not raise any questions with Mr. Monsour or Mr. Iezzi,

the preparer of those returns, regarding any of them.49


     48
      Most of the losses claimed in Schedules C and in Schedules
E of the 1989 joint return, the 1991 joint return, the 1992 joint
return, and the 1993 joint return were with respect to Laurel
Valley Farms, the Three Crowns Hotel, Azure Tides, Inc.,
Georgetown Square, and the Three Crowns Hotel Back Court.
     49
      Petitioner knew of the risk of an IRS challenge with
respect to at least the Three Crowns Hotel and the Three Crowns
Hotel Back Court. That is because (1) in the notice for the
taxable years 1987 and 1988 respondent made determinations to
disallow deductions of $126,632 and $136,641 for 1987 and 1988,
respectively, with respect to the Three Crowns Hotel and
(2) before respondent issued that notice petitioner and Mr.
Monsour agreed to respondent’s proposed determinations to in-
crease their income by $10,681 and $3,171 for 1987 and 1988,
respectively, with respect to the Three Crowns Hotel Back Court.
In addition, we presume that petitioner knew of the risk of an
IRS challenge with respect to certain losses that petitioner and
Mr. Monsour claimed in their joint returns for 1987 and 1988 with
respect to certain partnerships and S corporations. That is
                                                    (continued...)
                               - 60 -

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

to establish that she did not know, and had no reason to know, of

the transactions relating to Laurel Valley Farms, the Three Crowns

Hotel, Azure Tides, Inc., Georgetown Square, and the Three Crowns

Hotel Back Court that we assume arguendo gave rise to a portion or

all of an understatement for one or more of the taxable years

1989, 1991, 1992, and 1993.   See Jonson v. Commissioner, 118 T.C.

at 115-116; Bokum v. Commissioner, 94 T.C. 126, 150-151 (1990),

affd. 992 F.2d 1132 (11th Cir. 1993).   On that record, we further

find that petitioner has failed to establish that a reasonably

prudent taxpayer in her position at the time she signed each of

the joint returns for the taxable years 1989, 1991, 1992, and 1993

could not have been expected to know that each of those returns

contained an understatement of tax or that further investigation

was warranted.   See Hayman v. Commissioner, 992 F.2d 1256, 1261-

1262 (2d Cir. 1993), affg. T.C. Memo. 1992-228; Price v. Commis-

sioner, 887 F.2d 959, 965-966 (9th Cir. 1989), revg. an Oral

Opinion of this Court; Mora v. Commissioner, 117 T.C. 279, 289

(2001).50


     49
      (...continued)
because before respondent issued the notice for the taxable years
1987 and 1988 petitioner and Mr. Monsour agreed to respondent’s
proposed determinations to disallow such losses.
     50
      There is no published authority of the U.S. Court of
Appeals for the Third Circuit, the Court of Appeals to which an
appeal in this case would normally lie, setting forth that
                                                    (continued...)
                               - 61 -

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

to carry her burden of establishing that the knowledge or reason

to know positive factor set forth in section 4.03(1)(d) of Revenue

Procedure 2000-15 is present in this case.

     With respect to the legal obligation positive factor set

forth in section 4.03(1)(e) of Revenue Procedure 2000-15, peti-

tioner and Mr. Monsour were married at all relevant times.    On the

record before us, we find that the legal obligation factor is a

neutral factor in this case.

     With respect to the attribution positive factor set forth in

section 4.03(1)(f) of Revenue Procedure 2000-15, petitioner

contends that that positive factor is present in this case.    In

order for that factor to be present, petitioner must establish

that the liability for each of the taxable years at issue for

which she seeks relief is solely attributable to Mr. Monsour.    We

have found that petitioner has failed to carry her burden of

establishing under section 6015(b)(1)(B) that there is an under-


     50
      (...continued)
Court’s view as to whether the approach with respect to knowledge
or reason to know of erroneous deductions in Bokum v. Commis-
sioner, 94 T.C. 126, 150-151 (1990), affd. 992 F.2d 1132 (11th
Cir. 1993), or in Price v. Commissioner, 887 F.2d 959, 965-966
(9th Cir. 1989), revg. an Oral Opinion of this Court, is the
correct approach. In the instant case, petitioner has failed to
establish that the knowledge or reason to know positive factor is
present in this case under either the approach in Bokum or the
approach in Price with respect to each of the erroneous deduc-
tions in question that we assume arguendo gave rise to a portion
or all of an understatement for one or more of the taxable years
1989, 1991, 1992, and 1993.
                               - 62 -

statement of tax for any of the taxable years 1989, 1991, 1992,

and 1993 that is attributable to erroneous items of Mr. Monsour.

On the record before us, we find for the reasons set forth in our

consideration of petitioner’s position with respect to section

6015(b)(1)(B) that petitioner has failed to carry her burden of

establishing that the liability for each of the taxable years

1989, 1991, 1992, and 1993 for which she seeks relief is solely

attributable to Mr. Monsour.   As for the taxable year 1990, on the

record before us, we find for similar reasons that petitioner has

failed to carry her burden of establishing that the liability for

that year for which she seeks relief is solely attributable to Mr.

Monsour.

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

to carry her burden of establishing that the attribution positive

factor set forth in section 4.03(1)(f) of Revenue Procedure 2000-

15 is present in this case.

     Turning to the negative factors weighing against granting

relief under section 6015(f) set forth in section 4.03(2) of

Revenue Procedure 2000-15, those factors are:

          (a) Attributable to the requesting spouse. The
     unpaid liability or item giving rise to the deficiency
     is attributable to the requesting spouse.

          (b) Knowledge, or reason to know. A requesting
     spouse knew or had reason to know of the item giving
     rise to a deficiency or that the reported liability
     would be unpaid at the time the return was signed. This
     is an extremely strong factor weighing against relief.
     Nonetheless, when the factors in favor of equitable
                              - 63 -

     relief are unusually strong, it may be appropriate to
     grant relief under § 6015(f) in limited situations where
     a requesting spouse knew or had reason to know that the
     liability would not be paid, and in very limited situa-
     tions where the requesting spouse knew or had reason to
     know of an item giving rise to a deficiency.

          (c) Significant benefit. The requesting spouse has
     significantly benefitted (beyond normal support) from
     the unpaid liability or items giving rise to the defi-
     ciency. See § 1.6013-5(b).

          (d) Lack of economic hardship. The requesting
     spouse will not experience economic hardship (within the
     meaning of section 4.02(1)(c) of this revenue procedure)
     if relief from the liability is not granted.

          (e) Noncompliance with federal income tax laws.
     The requesting spouse has not made a good faith effort
     to comply with federal income tax laws in the tax years
     following the tax year or years to which the request for
     relief relates.

          (f) Requesting spouse’s legal obligation. The
     requesting spouse has a legal obligation pursuant to a
     divorce decree or agreement to pay the liability.

(We shall hereinafter refer to the negative factors set forth in

section 4.03(2)(a), (b), (c), (d), (e), and (f) of Revenue Proce-

dure 2000-15 as the attribution negative factor, the knowledge or

reason to know negative factor, the significant benefit negative

factor, the economic hardship negative factor, the noncompliance

negative factor, and the legal obligation negative factor, respec-

tively.)

     The parties do not dispute that the knowledge or reason to

know negative factor, the economic hardship negative factor, and

the legal obligation negative factor set forth in section

4.03(2)(b), (d), and (f), respectively, of Revenue Procedure
                              - 64 -

2000-15 are the opposites of the knowledge or reason to know

positive factor, the economic hardship positive factor, and the

legal obligation positive factor set forth in section 4.03(1)(d),

(b), and (e), respectively, of that revenue procedure.   Nor do

the parties dispute that the attribution negative factor set forth

in section 4.03(2)(a) of Revenue Procedure 2000-15 is essentially

the opposite of the attribution positive factor set forth in

section 4.03(1)(f) of that revenue procedure.51

     We have found that petitioner has failed to carry her burden

of establishing that the economic hardship positive factor and

the knowledge or reason to know positive factor set forth in

section 4.03(1)(b) and (d), respectively, of Revenue Procedure

2000-15 are present in this case.   On the record before us, we

find that petitioner has failed to carry her burden of establish-

ing that the economic hardship negative factor and the knowledge

or reason to know negative factor set forth in section 4.03(2)(d)

and (b), respectively, of that revenue procedure are not present

in this case.

     With respect to the attribution negative factor set forth in

section 4.03(2)(a) of Revenue Procedure 2000-15, we have found

that petitioner has failed to carry her burden of establishing



     51
      We do not believe that those two factors are exactly
opposite because the attribution negative factor does not contain
the word “solely” that appears in the attribution positive
factor.
                               - 65 -

that the attribution positive factor set forth in section

4.03(1)(f) of that revenue procedure is present in this case.     On

the record before us, we find for the reasons set forth in our

consideration of the attribution positive factor that petitioner

has failed to carry her burden of establishing (1) that no item

giving rise to a portion or all of the understatement for each of

the taxable years 1989, 1991, 1992, and 1993 and (2) that no

portion of the unpaid liability for 1990 are attributable to

herself.   On the record before us, we find that petitioner has

failed to carry her burden of establishing that the attribution

negative factor set forth in section 4.03(2)(a) of Revenue Proce-

dure 2000-15 is not present in this case.

     With respect to the significant benefit negative factor set

forth in section 4.03(2)(c) of Revenue Procedure 2000-15, peti-

tioner makes no argument that that negative factor is not present

with respect to the taxable year 1990.   On the record before us,

we find that petitioner has failed to carry her burden of estab-

lishing that she did not significantly benefit beyond normal

support from the unpaid liability with respect to the taxable year

1990.

     As for each of the taxable years 1989, 1991, 1992, and 1993,

petitioner argues that

     While it may be arguable that the Petitioner benefited
     by the reduced taxes and/or omitted income, those argu-
     ments appear to be without merit * * * [based on] Peti-
     tioner’s own testimony which stated that her lifestyle
                               - 66 -

     remained unchanged or got worse during the years at
     issue.

     Respondent argues that

     The erroneous deductions giving rise to the deficiencies
     and the 1990 unpaid liability provided both of the
     Monsours with significantly more disposable income than
     they otherwise would have had.

     Normal support is not a significant benefit.      Flynn v.

Commissioner, 93 T.C. 355, 367 (1989).    Normal support is measured

by the circumstances of the parties.     Id.   In order to determine

whether the requesting spouse significantly benefited from the

items giving rise to the deficiency, we consider whether the

requesting spouse and the nonrequesting spouse were able to make

expenditures in the taxable years in question that they otherwise

would not have been able to make.    See Alt v. Commissioner, 119

T.C. at 314; Jonson v. Commissioner, 118 T.C. at 119-120.

     We have found that from the time of their marriage on July 3,

1983, until 1986, petitioner and Mr. Monsour did not worry about

money and did not scrutinize their discretionary spending to any

significant extent.   In 1986, Mr. Monsour began to experience tax

problems when Congress enacted certain provisions into the Code

that in general eliminated the favorable tax treatment that the

Code had previously permitted with respect to at least certain of

Mr. Monsour’s Florida investments.   As a result of, inter alia,

those tax problems, petitioner and Mr. Monsour began to scrutinize

their discretionary spending much more than they had in the past.
                               - 67 -

Nonetheless, on the record before us, we find that petitioner has

failed to establish the amount that she and Mr. Monsour expended

annually for their normal support before, during, and after the

taxable years at issue.   On that record, we further find that

petitioner has failed to carry her burden of persuading us that

she did not significantly benefit beyond normal support from the

items giving rise to the deficiency with respect to each of the

taxable years 1989, 1991, 1992, and 1993.

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

to carry her burden of establishing that the significant benefit

negative factor set forth in section 4.03(2)(c) of Revenue Proce-

dure 2000-15 is not present in this case.

     With respect to the noncompliance negative factor set forth

in section 4.03(2)(e) of Revenue Procedure 2000-15, petitioner

contends that she “has followed all of the tax laws in the years

since 1993.”   We have found that at the time of the trial in this

case in September 2003 petitioner and Mr. Monsour had an unpaid

liability of $60,000 with respect to their 1998 joint return.    On

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

her burden of establishing that the noncompliance negative factor

set forth in section 4.03(2)(e) of Revenue Procedure 2000-15 is

not present in this case.

     With respect to the legal obligation negative factor set

forth in section 4.03(2)(f) of Revenue Procedure 2000-15, we have
                                 - 68 -

found that the legal obligation positive factor set forth in

section 4.03(1)(e) of Revenue Procedure 2000-15 is a neutral

factor in this case.   On the record before us, we find that the

legal obligation negative factor set forth in section 4.03(2)(f)

of that revenue procedure is a neutral factor in this case.

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

to carry her burden of establishing any other factors with respect

to the taxable years at issue that are not set forth in Revenue

Procedure 2000-15 and that weigh in favor of granting her relief

under section 6015(f).

     Based upon our examination of the entire record before us, we

find that petitioner has failed to carry her burden of establish-

ing that respondent abused respondent’s discretion in denying her

relief under section 6015(f) with respect to any of the taxable

years at issue.

     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

                                 for respondent.
