                        T.C. Memo. 2010-257



                      UNITED STATES TAX COURT



               GAIL PRESCOTT DRAYER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 17915-08.              Filed November 23, 2010.



     Barbara N. Doherty and Eric L. Lunsford,1 for petitioner.

     John M. Wall, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     KROUPA, Judge:   This case arises from a request for relief

from joint and several liability under section 6015(f)2 for the


     1
      Eric L. Lunsford filed a motion to withdraw as petitioners’
counsel, which we granted.
     2
      All section references are to the Internal Revenue Code,
and all Rule references are to the Tax Court Rules of Practice
and Procedure, unless otherwise indicated.
                                - 2 -

years 1995 through 2003 (the years at issue).    Respondent denied

petitioner’s request for relief, and petitioner timely filed a

stand-alone petition.3   The issue for decision is whether

petitioner is entitled to relief from joint and several liability

under section 6015(f).   We hold that she is entitled to relief.

                          FINDINGS OF FACT

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

The stipulations of fact and the accompanying exhibits are

incorporated by this reference.    Petitioner resided in Santa

Rosa, California at the time she filed the petition.

     Petitioner was in her mid-30s when she married Charles

Drayer (Mr. Drayer) in 1983.    The Drayers divorced in 2004 after

21 years of marriage.    Petitioner seeks innocent spouse relief

from tax liabilities arising from Mr. Drayer’s sole

proprietorship during the years at issue.

     Mr. Drayer began operating a sign-making business called

Signs of All Kinds before meeting petitioner.    He still owned and

operated the business as a sole proprietorship at the time of

trial.   When petitioner met Mr. Drayer, she worked as a newspaper

typesetter and layout artist.    After the Drayers married,

petitioner left her job and became a homemaker.




     3
      This Court has jurisdiction to determine whether sec.
6015(f) relief is warranted after a request for relief has been
denied by the Commissioner. See sec. 6015(e)(1).
                                 - 3 -

     Petitioner’s primary focus was to raise the couple’s

children, a son born in 1987 and a daughter born in 1988, and to

care for their household.    During available time, however,

petitioner assisted Mr. Drayer with his business.    Her role was

limited, and she performed relatively minor or administrative

tasks such as assembling signs, doing secretarial work, obtaining

permits, depositing checks into the business checking account,

checking account balances from time to time at Mr. Drayer’s

direction and gathering financial information to give to the

accountant.    Petitioner did not design signs, secure business

contracts, make business decisions, make sales or receive any

compensation for her work.    Indeed, Mr. Drayer testified that

petitioner made no business decisions and probably did not know

how much his business made.

     Signs of All Kinds was the couple’s sole source of income

from 1987 through 2002.     The income from Signs of All Kinds was

modest, and they struggled to pay expenses beyond family

necessities.    Mr. Drayer asked petitioner to get a job or seek

training beyond her high school education when their children

became older and were better able to care for themselves.

Petitioner did not, however, have another paying job until she

got a position as a care giver in 2003.

     The Drayers filed joint Federal income tax returns for the

years at issue.    Petitioner thought she was legally required to
                               - 4 -

sign their tax returns because they were married.     Petitioner and

Mr. Drayer both knew when signing their tax returns for the years

at issue that their financial situation was tight and that they

might not be able to pay their tax liabilities.

     Times were tough for the Drayers, and their marriage became

increasingly rocky.   Mr. Drayer would often get very angry and

had frequent outbursts, particularly in the context of

discussions about finances and taxes.     Petitioner worried about

unpaid tax liabilities, but Mr. Drayer would furiously insist

that he would handle the problem and would submit another offer-

in-compromise to the Internal Revenue Service.     Petitioner

provided specific examples of angry outbursts, including a time

when Mr. Drayer threatened to hit her and broke specific items.

He also, after one such incident, told petitioner that he had

intended to commit suicide.   Mr. Drayer called petitioner

derogatory names and publicly humiliated her.     He also regularly

drank a lot of alcohol and often smoked marijuana.

     After yet another fight, Mr. Drayer left petitioner and the

couple eventually divorced.   Petitioner was diagnosed with

depression after their divorce.   Petitioner retained custody of

their two children in the divorce.     Mr. Drayer was required to

pay child support and spousal support, although spousal support

payments were sometimes not made as directed.     The judgment for
                                 - 5 -

dissolution of marriage did not, however, determine who would pay

the couple’s outstanding tax liabilities.

     Petitioner’s financial situation has been tight since her

divorce.     From 2003 through 2009 petitioner worked part time as

an in-home care giver.     She earned an annual average of $5,840.20

from 2004 through 2008.4    She was diagnosed with depression and

was eligible to receive disability insurance benefits for a year

beginning in August 2009.    The disability assistance was due to

expire in August 2010, at which time petitioner was expected to

be able to perform her customary work.    Petitioner’s monthly

income for 2007 was $1,366, which she spent on basic living

expenses.5    Petitioner’s monthly income in 2009 totaled $1,793.6

Petitioner was unemployed at the time of trial.

     Petitioner retained the services of AARP Tax-Aide to prepare

her income tax returns, which were timely filed for 2004 through

2009.    Despite her very modest income, petitioner timely filed

and paid all liabilities shown on her returns for those years.

Petitioner later discovered that $4,880 and $10,357.20 of alimony


     4
      Petitioner earned $7,581 in 2004, $5,016 in 2005, $7,101 in
2005, $4,415 in 2007 and $5,088 in 2008.
     5
      Her expenses for 2007 were $1,366 per month, consisting of
$800 for rent or mortgage, $100 for food, $70 for utilities, $50
for telephone, $180 for auto payments, $116 for auto insurance
and $50 for auto repairs.
     6
      Petitioner’s monthly income in 2009 consisted of $705 from
Social Security, $500 in spousal support and $588 from disability
insurance.
                               - 6 -

had been omitted from her 2004 and 2005 tax returns,

respectively.   She also later learned that $366 of unemployment

compensation had been omitted from her 2006 return.    Petitioner

indicated surprise and embarrassment about the omissions at

trial, and was not aware of any other omissions.   Respondent

asserts that petitioner failed to include $1,800 of alimony in

income for 2007 as well.

     Petitioner requested innocent spouse relief in 2007 for the

Drayers’ unpaid tax liability of over $230,000 for multiple

years.   Petitioner checked a box on her initial request for

innocent spouse relief, claiming that she was a victim of

domestic abuse and feared that filing a claim for innocent spouse

relief would result in retaliation.    She neglected, however, to

complete the question regarding abuse on her related

questionnaire because she did not see the question when she and

her friend from church completed the questionnaire.    As part of

respondent’s review, Mr. Drayer completed a Form 12508,

Questionnaire for Non-Requesting Spouse, where he stated under

penalties of perjury that petitioner was not a help with the

business.   In fact, he stated that she was a simpleton.   He

confirmed there were no major assets transferred in the divorce

except that petitioner received a car.   Respondent made a

preliminary determination to deny petitioner’s request for

innocent spouse relief, determining that she failed to prove she
                               - 7 -

had reason to believe the taxes would be paid when she signed the

returns.

     Petitioner appealed the determination.   Respondent’s Appeals

Office agreed that petitioner had met all seven threshold

requirements for relief and would suffer economic hardship if

obligated to pay the tax liabilities.   Respondent’s Appeals

Office also determined that petitioner was compliant with tax

laws as of the time of determination and that the income tax

liabilities in question are attributable to Mr. Drayer.

Nevertheless, respondent’s Appeals Office disallowed the claim

for relief in 2008.   Respondent denied her relief on the grounds

that petitioner knew or had reason to know that the taxes

reported on each return would not be paid.

                              OPINION

     We must decide whether petitioner is entitled to relief from

tax liabilities related to her ex-husband’s sole proprietorship

during the second half of their 21-year marriage.    The

liabilities consist of amounts shown as due on their returns and

left unpaid.   Petitioner argues that she qualifies for relief and

it is inequitable to hold her liable for underpayments

attributable to income from Mr. Drayer’s business.    Respondent’s

Appeals Office denied petitioner’s claim because she had

knowledge that the tax liability might not be paid.    Respondent

denied her relief even though respondent’s Appeals Office
                                - 8 -

determined petitioner had met all seven threshold requirements

for relief and that other factors, including economic hardship,

subsequent compliance with tax laws and attribution of the

liability to Mr. Drayer, all weighed in petitioner’s favor.

Respondent now seeks to broaden the scope of issues to include

those beyond petitioner’s knowledge, and to refute determinations

made by his Appeals Office.

     Only section 6015(f) applies as this case involves

underpayment of taxes shown on joint returns for the relevant

years.7   The Commissioner has the discretion to relieve a spouse

or former spouse of joint liability if, taking into account all

the facts and circumstances, it is inequitable to hold that

spouse liable for any deficiency or unpaid tax.     Sec. 6015(f);

sec. 1.6015-4(a), Income Tax Regs.

     We begin with the standard of review and the burden of

proof.    Respondent urges us to review the case for abuse of

discretion.    To do so, however, would be to reject our previous

holding that the standard of review is de novo.      Porter v.

Commissioner, 132 T.C. 203 (2009).      A trial de novo requires


     7
      Married taxpayers who elect to file a joint return are
jointly and severally liable for the entire tax due. See sec.
6013(d)(3). A spouse or former spouse may petition the
Commissioner for relief from joint and several liability in
certain circumstances. See sec. 6015(a). Sec. 6015(b) and (c)
does not apply in cases involving underpayment of tax, as here.
Equitable relief may, however, be available under sec. 6015(f).
Sec. 1.6015-4, Income Tax Regs.; Rev. Proc. 2003-61, sec. 2.04,
2003-2 C.B. 296, 297.
                                 - 9 -

independent judicial determination of the issues in the case.

See, e.g., Morris v. Rumsfeld, 420 F.3d 287, 292, 294 (3d Cir.

2005); Timmons v. White, 314 F.3d 1229, 1233-1234 (10th Cir.

2003).   The spouse requesting relief generally bears the burden

of proof.   See Rule 142(a); Alt v. Commissioner, 119 T.C. 306,

311 (2002), affd. 101 Fed. Appx. 34 (6th Cir. 2004).

     The Commissioner has outlined procedures for determining

whether a requesting spouse qualifies for equitable relief under

section 6015(f).   See Rev. Proc. 2003-61, 2003-2 C.B. 296.     We

now analyze the facts under these procedures to determine whether

petitioner qualifies for equitable relief.

I. Threshold Conditions for Section 6015(f) Relief

     A requesting spouse must satisfy seven threshold conditions

before the Commissioner will consider a request for relief.        Id.

sec. 4.01, 2003-2 C.B. at 297.    Respondent’s Appeals Office

concluded that petitioner had satisfied all seven.     In brief,

however, respondent argued that petitioner has not shown that the

Drayers’ underpayments are attributable to her ex-husband.8     We

disagree.

     Mr. Drayer started his business, Signs of All Kinds, as a

sole proprietorship before he met petitioner.    He still owned and



     8
      Respondent had also asserted that petitioner failed to
apply for relief within two years after the date of respondent’s
first collection activity. See Rev. Proc. 2003-61, sec. 4.01(3),
2003-2 C.B. at 297. Respondent has conceded this point.
                                - 10 -

operated this business as a sole proprietorship long after their

divorce.    These facts, although not dispositive, are important.

See Franc v. Commissioner, T.C. Memo. 2010-79.

     Petitioner credibly testified that her primary focus was to

raise her children and care for the Drayers’ household.    She may

have left her job in part to help Mr. Drayer with his business.

Her involvement in the business was minimal, however, and she did

not play an active role.    She did not design signs, make business

decisions, make sales or secure contracts.    She helped with the

business only during available time outside of caring for the

Drayers’ two children and their home.    During this limited time,

petitioner assisted Mr. Drayer with his business by assembling

signs, performing secretarial work, obtaining permits, depositing

checks into the business checking account, checking account

balances from time to time at Mr. Drayer’s direction and

gathering financial information to give to the accountant.      Mr.

Drayer asked petitioner to get a job or seek job training when

their children became older and were better able to care for

themselves.    As such, petitioner did not actively and

substantially participate in Mr. Drayer’s work at Signs of All

Kinds.     Cf. Ishizaki v. Commissioner, T.C. Memo. 2001-318.

     The Drayers’ work was not collaborative and mutual, and

petitioner was never identified as having an ownership interest

in Signs of All Kinds.    Cf. Olson v. Commissioner, T.C. Memo.
                                - 11 -

2009-294.   Instead, Mr. Drayer declared on his questionnaire for

non-requesting spouse, under penalties of perjury, that

petitioner was a simpleton and was not a help with the business.9

Mr. Drayer also confirmed at trial that petitioner made no

business decisions and probably did not know how much the

business made.

      We find that petitioner met her burden of proving that the

income for all the years at issue is attributable to Mr. Drayer

and his sole proprietorship.    Petitioner has satisfied the seven

threshold conditions.    We now consider whether relief will be

granted.

II.   Safe Harbor for Section 6015(f) Relief

      Equitable relief will ordinarily be granted if the

requesting spouse fulfills three safe harbor conditions.     See

Gonce v. Commissioner, T.C. Memo. 2007-328; Billings v.

Commissioner, T.C. Memo. 2007-234; Rev. Proc. 2003-61, sec. 4.02,

2003-2 C.B. at 298.    The parties agree that petitioner does not

qualify for relief under the safe harbor because she knew when

she signed the relevant returns that Mr. Drayer would not pay the

liabilities.     See Rev. Proc. 2003-61, sec. 4.02(1)(b), 2003-2

C.B. at 298.


      9
      Mr. Drayer testified at trial that the answers on his
questionnaire were intended to keep peace in the family and allow
petitioner to start fresh without the burden of prior tax
liabilities. He had, however, changed his mind by the time of
trial.
                               - 12 -

III. Balancing Test

     When a requesting spouse fails to satisfy the safe harbor

conditions, the Commissioner may determine through a balancing

test whether equitable relief is appropriate.   The Commissioner

has listed factors to be weighed by the Commissioner in

determining relief.   See id. sec. 4.03, 2003-2 C.B. at 298-299.

The factors include (a) whether the requesting spouse (1) is

separated or divorced from the nonrequesting spouse, (2) would

suffer economic hardship if relief were denied, (3) had knowledge

or reason to know that the nonrequesting spouse would not pay the

income tax liability, (4) made a good faith effort to comply with

income tax laws in years after the years at issue, (5) received

significant economic benefit from the items giving rise to the

liability, (6) was abused by the nonrequesting spouse and (7) was

in poor health when signing the return or requesting relief and

(b) whether the nonrequesting spouse had a legal obligation to

pay the outstanding liability.    Id. sec. 4.03(2), 2003-2 C.B. at

298-299.   The list is nonexhaustive and no single factor is

determinative.   Id. sec. 4.03(2), 2003-2 C.B. at 298.    We address

each of the factors in turn.

     A.    Marital Status

     The first factor relates to the marital status at the time

of the request for innocent spouse relief.   Petitioner and Mr.

Drayer divorced in 2004.    This factor weighs in favor of relief.
                               - 13 -

     B.     Economic Hardship If Relief Were Denied

     A second factor focuses on whether the requesting spouse

would suffer economic hardship if relief were denied.

Respondent’s Appeals Office found that petitioner most likely

would suffer economic hardship if relief were denied.    Respondent

now argues, however, that petitioner has failed to establish

economic hardship because she failed to provide documentation of

her current expenses.

     A requesting spouse suffers economic hardship if paying tax

liabilities would prevent the taxpayer from paying reasonable

basic living expenses.    Sec. 301.6343-1(b)(4)(i), Proced. &

Admin. Regs.; Rev. Proc. 2003-61, sec. 4.02(1)(c),

4.03(2)(a)(ii), 2003-2 C.B. at 298.     The Court considers, among

other things, in determining economic hardship (1) the taxpayer’s

age and earning potential, (2) an amount reasonably necessary for

food, clothing, housing, medical expenses and transportation, (3)

the amount of assets available to pay the taxpayer’s expenses,

(4) the cost of living in the geographical area in which the

taxpayer lives and (5) any other factor bearing on economic

hardship.    See sec. 301.6343-1(b)(4)(ii), Proced. & Admin. Regs.

     We may accept petitioner’s testimony if we find it credible.

See, e.g., Washington v. Commissioner, 120 T.C. 137, 150 (2003).

Petitioner testified that she was on disability for depression at

the time of trial, and that her financial situation since her
                               - 14 -

divorce has been precarious.   Indeed, petitioner’s monthly income

at the time of trial totaled $1,793.    The disability insurance,

which paid $588 per month, was due to expire in August 2010.    At

that time, petitioner was expected to be able to perform her

customary work.

     Petitioner’s customary work, however, has paid less than

disability insurance benefits.   Petitioner earned an average of

$5,840.20 annually from 2004 through 2008, averaging $100 per

month less than the amount she received under disability

insurance.   Petitioner also testified that she was 62 years old

at the time of trial and that she has only a high school

education.   Petitioner worked as a newspaper typesetter and

layout artist but has not done this work for more than 20 years.

     Petitioner appears to have little or no savings or other

assets from which to pay extraordinary expenses.   Mr. Drayer

confirmed that she received only a car from the divorce.

     Petitioner listed $1,366 as income and the same amount as

expenses on the questionnaire for requesting spouse, which she

completed in 2007.   Her monthly expense list identified very

small amounts for rent, food, utilities, telephone and auto

payments, insurance and repairs.10   She listed no medical or


     10
      Petitioner’s income is well below the amount treated as
appropriate to cover her allowable expenses in her county of
residence under respondent’s Collection Financial Standards. See
Collection Financial Standards, http://www.irs.gov/individuals/
                                                   (continued...)
                              - 15 -

insurance expenses and no amount for clothing.    Respondent

correctly notes that petitioner has not provided more current

information regarding her expenses.    Nevertheless, given

petitioner’s age, education, low earnings, expired disability

benefits, history of depression and very modest list of 2007

expenses, we find that payment of such significant outstanding

tax liabilities would cause petitioner to suffer economic

hardship if her request for relief were denied.    This factor

weighs in favor of relief.

     C.   Knowledge or Reason To Know That the Nonrequesting
          Spouse Would Not Pay the Income Tax Liability

     A third factor is whether the requesting spouse knew or had

reason to know that the nonrequesting spouse would not pay the

tax liability.   The parties agree that petitioner knew at the



     10
      (...continued)
article/0,,id=96543,00.html (last visited Sept. 21, 2010).
Respondent uses the Collection Financial Standards to help
determine a taxpayer’s ability to pay a delinquent tax liability.
For example, $526 per month would be a maximum appropriate
allocation for food, clothing and other related items. See
National Standards: Food, Clothing and Other Items, http://www.
irs.gov/businesses/small/article/0,,id=104627,00.html (last
visited Sept. 21, 2010). This amount is $426 more than the $100
that petitioner allocated for this purpose in 2007. The
Collection Financial Standards also list $1,772 as an appropriate
maximum monthly allowance for rent and utilities in Sonoma
County. See California - Local Standards: Housing and
Utilities, http://www.irs.gov/businesses/small/article/0,,id=1047
01,00.html (last visited Sept. 21, 2010). This amount is $902
more than the $800 petitioner allocated for this purpose in 2007.
These standards are merely guidelines for an appropriate maximum
amount, but they provide some objective guidance on a reasonable
standard of living in petitioner’s region.
                               - 16 -

time she signed the relevant returns that Mr. Drayer was unlikely

to pay the joint tax liabilities.    This factor weighs against

relief.

     D.    Subsequent Compliance With Income Tax Laws

     A fourth consideration is whether the requesting spouse made

a good faith effort to comply with income tax laws in subsequent

years.    Respondent’s Appeals Office had determined that

petitioner was compliant with tax laws as of 2008 and that this

factor weighed in favor of relief.      Respondent now disputes this

determination.

     Petitioner sought help from AARP Tax-Aide for income tax

returns from 2004 to 2009.    She timely filed returns for those

years and timely paid the tax liabilities shown.     She

subsequently learned that there were omissions of alimony from

her 2004 and 2005 returns and an omission of unemployment

compensation from her 2006 return.11     When asked about the

omissions, petitioner’s response at trial credibly indicated

surprise and embarrassment about the omissions.     Petitioner did

not make excuses for her failure and credibly stated that she was

not aware of any other omissions.    This factor is neutral.



     11
      Respondent asserts in his posttrial brief that petitioner
failed to include $1,800 of alimony from income in 2007 as well.
We do not consider amounts raised for the first time in briefs.
Petitioner did not have the opportunity to dispute this factual
allegation at trial. See Ferrarese v. Commissioner, T.C. Memo.
2002-249.
                               - 17 -

     E.    Significant Economic Benefit

     A fifth factor is whether the requesting party received a

significant economic benefit from the items giving rise to the

liability.    The parties stipulated that the Drayers did not

receive a significant benefit from their failure to pay their tax

liabilities.    Respondent makes the outlandish assertion in his

posttrial brief that petitioner’s failure to secure adequate

additional income for the family indicates that she received a

significant benefit.    We will not allow this posttrial

contradiction of a conclusive admission.     See Rule 91(e).   This

factor weighs in favor of relief.

     F.     Abuse

     A sixth factor is abuse of the requesting spouse.     Abuse by

the nonrequesting spouse favors relief, and a history of such

abuse may mitigate a requesting spouse’s knowledge that a tax

liability would not be paid.    Rev. Proc. 2003-61, sec.

4.03(2)(b)(i), 2003-2 C.B. at 299.      Abuse need not be physical.

The Court has found that mental, emotional and verbal abuse may

incapacitate a requesting spouse in the same way as physical

abuse.    Nihiser v. Commissioner, T.C. Memo. 2008-135.    Claims of

abuse require substantiation or specificity in allegations.     See

id.; Knorr v. Commissioner, T.C. Memo. 2004-212; Collier v.

Commissioner, T.C. Memo. 2002-144.
                              - 18 -

     The Court has noted that this area of tax law is not well

developed and requires a careful case-by-case analysis.    Nihiser

v. Commissioner, supra.   Some objective indications of abuse that

the Court has considered include (1) isolating the victim, (2)

encouraging exhaustion of the victim, (3) obsessive or possessive

behavior, (4) threats to commit suicide, to murder the requesting

spouse or to kill family or friends, (5) using degrading language

including humiliation, denial of victim’s talents and abilities

and name-calling, (6) abusing drugs or alcohol, or administering

such substances to the victim, (7) undermining the victim’s

ability to reason independently or (8) occasional positive

behavior, suggesting that the abuse might end.   Id.

     With this background, we begin with a review of the

administrative record and then turn to the testimony presented at

trial.   Petitioner claimed on her initial request for innocent

spouse relief (Form 8857) that she was a victim of domestic abuse

and feared requesting innocent spouse relief would result in

retaliation.   Petitioner credibly testified that she did not

describe the abuse on her questionnaire (Form 12510) because she

did not see the question, which was at the bottom of the form,

when she and her friend from church completed the questionnaire.

     We now turn to the conflicting trial testimony regarding

abuse.   It is our duty as the Court to listen to testimony,

observe witnesses, weigh the evidence and distill the truth.
                              - 19 -

Diaz v. Commissioner, 58 T.C. 560, 564 (1972); Kropp v.

Commissioner, T.C. Memo. 2000-148.     We are not required to accept

testimony if it is improbable, unreasonable, or questionable.

MacGuire v. Commissioner, 450 F.2d 1239, 1244-1245 (5th Cir.

1971), affg. T.C. Memo. 1970-89.   We find that petitioner’s

testimony was credible in material respects.    By contrast, we

find that Mr. Drayer’s and his supporting witness’ testimony was

not credible in certain aspects, including with respect to abuse.

     Petitioner credibly testified that Mr. Drayer would often

get very angry, particularly in the context of discussions about

finances and taxes.   Petitioner provided specific examples of

angry outbursts, including a time when Mr. Drayer physically

threatened to hit her and specific instances of broken items.

Mr. Drayer told petitioner that he had intended to commit suicide

after one particularly terrible fight.    Petitioner testified that

Mr. Drayer regularly called her specified derogatory names and

publicly humiliated her.   She also testified that he regularly

drank to excess and smoked marijuana.    Significant aspects of her

testimony were confirmed by Mr. Drayer and his sister.    We find

that petitioner has shown that the abuse factor weighs in favor

of relief.
                               - 20 -

      G.   Poor Health When Signing the Return or Requesting
           Relief

      A seventh consideration is whether the requesting spouse was

in poor health when signing the return or requesting relief.

Petitioner endured increasing amounts of abuse over the course of

a 21-year marriage.    She testified at trial that she was

depressed after her divorce in 2004, when she was caring for the

Drayers’ two children and on her own for the first time.

Petitioner’s depression was subsequently diagnosed, and she

received disability insurance benefits for depression from August

2009 through 2010.    This factor weighs in favor of relief.

      H.   Nonrequesting Spouse’s Legal Obligation To Pay the
           Outstanding Liability

      An eighth factor is whether the nonrequesting spouse had a

legal obligation to pay the outstanding liability.    The Drayers’

divorce judgment did not assign responsibility for outstanding

tax liabilities.   This factor is neutral.

IV.   Conclusion

      In summary, five factors weigh in favor of relief, one

factor weighs against relief and two factors are neutral.      After

weighing the testimony and evidence in this fact-intensive and

nuanced case, we conclude that it is inequitable to hold

petitioner liable for the tax liabilities attributable to her ex-

husband and his sole proprietorship.    Accordingly, we relieve

petitioner from joint tax liability for the years in question.
                             - 21 -

     We have considered all arguments made in reaching our

decision and, to the extent not mentioned, we conclude that they

are moot, irrelevant, or without merit.

     To reflect the foregoing,


                                          Decision will be entered

                                   for petitioner.
