                          T.C. Memo. 2001-313



                      UNITED STATES TAX COURT



                  SYBIL M. SMITH, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 144-00.                    Filed December 19, 2001.


     William Burwell Sellers, for petitioner.

     Linda J. Wise, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     COHEN, Judge:   This is a proceeding commenced under section

6015, based on respondent’s determination that petitioner is not

entitled to relief from joint and several liability for 1987,

1992, and 1995 with respect to joint returns filed with Hugh V.

Smith, Jr. (H. Smith).    Petitioner has now conceded that she is

not entitled to relief for 1995 because she was not a party to a
                                - 2 -

joint return for that year.    Unless otherwise indicated, all

section references are to the Internal Revenue Code in effect for

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

Rules of Practice and Procedure.

                          FINDINGS OF FACT

     Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.

Petitioner resided in Albertville, Alabama, at the time that she

filed the petition.    From July 13, 1968, until March 8, 1995,

petitioner was married to H. Smith.     H. Smith was a lawyer.

     On October 17, 1988, petitioner and H. Smith filed a joint

Federal income tax return for 1987 on which they reported a tax

liability of $63,776.    No part of that liability was paid at the

time of filing of the return.    Audit of the 1987 return commenced

in January 1989.

     During 1992, petitioner was employed at Bullock County

Hospital as a nurse.    On August 27, 1993, petitioner and H. Smith

filed a joint Federal income tax return for 1992 on which they

reported a tax liability of $3,107.     No payments were made or

credited at the time of filing of the 1992 return.     On

September 20, 1993, assessments were made for the tax reported on

the return, of $69 for an estimated tax penalty, $93.21 for a

failure to pay penalty, and $95.58 for accrued interest.

Collection costs of $11 were assessed on December 27, 1993.      On
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February 5, 1996, a deficiency in the amount of $2,745 was

assessed based on a defaulted notice of deficiency.    No payments

were made on the 1992 account prior to July 22, 1998.

     Petitioner originally sought administrative relief from the

Internal Revenue Service under prior section 6013(e).    For 1987,

respondent determined that petitioner was entitled to relief from

liability with respect to a deficiency determined for that year,

but not with respect to the tax reported on the return but not

paid and penalties relating thereto.    When section 6015 was

adopted in 1998 (repealing section 6013(e)), petitioner’s claim

was reconsidered under the new Code section.    Petitioner, through

her counsel, was invited to supply additional information that

would be relevant under section 6015.    No further information was

provided.    In a notice of final determination sent October 5,

1999, respondent determined that petitioner was entitled to the

partial relief for 1987 described above.    Respondent further

determined that petitioner had not shown that she met the

requirements of section 6015(b) or (c) for 1992 and that she did

not file a joint return for 1995.    Petitioner had not claimed

relief under section 6015(f), and no determination was made

specifically referring to that section.

     At the time of trial in May 2001, the original returns filed

by petitioner and H. Smith for 1987 and 1992 were no longer

available.
                                  - 4 -

                                 OPINION

     The above findings of fact are sparse.        The record in this

case does not include either the tax returns for the years in

issue or the notices of deficiency, and, therefore, we cannot

determine the nature of the adjustments leading to the

deficiencies and unpaid taxes and whether they are solely

attributable or allocable to H. Smith.

     Section 6015 provides in pertinent part as follows:

     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
                  understatement 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 circumstances, it is inequitable to hold
                  the other individual liable for the
                  deficiency in tax for such taxable year
                  attributable to such understatement; and
                         - 5 -

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

     then the other individual shall be relieved of
     liability for tax (including interest, penalties,
     and other amounts) for such taxable year to the
     extent such liability is attributable to such
     understatement.

          (2) Apportionment of relief.--If an
     individual who, but for paragraph (1)(C), would be
     relieved of liability under paragraph (1),
     establishes that in signing the return such
     individual did not know, and had no reason to
     know, the extent of such understatement, then such
     individual shall be relieved of liability for tax
     (including interest, penalties, and other amounts)
     for such taxable year to the extent that such
     liability is attributable to the portion of such
     understatement of which such individual did not
     know and had no reason to know.

          (3) Understatement.--For purposes of this
     subsection, the term “understatement” has the
     meaning given to such term by section
     6662(d)(2)(A).

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

          (1) In general.--Except as provided in this
     subsection, if an individual who has made a joint
     return for any taxable year elects the application
     of this subsection, the individual’s liability for
     any deficiency which is assessed with respect to
     the return shall not exceed the portion of such
     deficiency properly allocable to the individual
     under section (d).

          (2) Burden of proof.--Except as provided in
     subparagraph (A)(ii) or (C) of paragraph (3), each
     individual who elects the application of this
                       - 6 -

subsection shall have the burden of proof with
respect to establishing the portion of any
deficiency allocable to such individual.

     (3) Election.--

          (A) Individuals eligible to make
     election.--

               (i) In general.--An individual
          shall only be eligible to elect the
          application of this subsection if–-

                    (I) at the time such election
               is filed, such individual is no
               longer married to, or is legally
               separated from, the individual with
               whom such individual filed the
               joint return to which the election
               relates; or

                    (II) such individual was not a
               member of the same household as the
               individual with whom such joint
               return was filed at any time during
               the 12-month period ending on the
               date such election is filed.

               (ii) Certain taxpayers ineligible
          to elect.--If the Secretary demonstrates
          that assets were transferred between
          individuals filing a joint return as
          part of a fraudulent scheme by such
          individuals, an election under this
          subsection by either individual shall be
          invalid (and section 6013(d)(3) shall
          apply to the joint return).

          (B) Time for election.--An election
     under this subsection for any taxable year
     may be made at any time after a deficiency
     for such year is asserted but not later than
     2 years after the date on which the Secretary
     has begun collection activities with respect
     to the individual making the election.

          (C) Election not valid with respect to
     certain deficiencies.--If the Secretary
                         - 7 -

          demonstrates that an individual making an
          election under this subsection had actual
          knowledge, at the time such individual signed
          the return, of any item giving rise to a
          deficiency (or portion thereof) which is not
          allocable to such individual under subsection
          (d), such election shall not apply to such
          deficiency (or portion). This subparagraph
          shall not apply where the individual with
          actual knowledge establishes that such
          individual signed the return under duress.

          *    *    *    *    *    *    *

     (d) Allocation of Deficiency.--For purposes of
subsection (c)--

          (1) In general.--The portion of any
     deficiency on a joint return allocated to an
     individual shall be the amount which bears the
     same ratio to such deficiency as the net amount of
     items taken into account in computing the
     deficiency and allocable to the individual under
     paragraph (3) bears to the net amount of all items
     taken into account in computing the deficiency.

          (2) Separate treatment of certain items.--If
     a deficiency (or portion thereof) is attributable
     to–-

               (A) the disallowance of a credit; or

               (B) any tax (other than tax imposed by
          section 1 or 55) required to be included with
          the joint return;

     and such item is allocated to one individual under
     paragraph (3), such deficiency (or portion) shall
     be allocated to such individual. Any such item
     shall not be taken into account under paragraph
     (1).

          (3) Allocation of items giving rise to the
     deficiency.--For purposes of this subsection–-

               (A) In general.--Except as provided in
          paragraphs (4) and (5), any item giving rise
          to a deficiency on a joint return shall be
                                 - 8 -

               allocated to individuals filing the return in
               the same manner as it would have been
               allocated if the individuals had filed
               separate returns for the taxable year.

                    (B) Exception where other spouse
               benefits.--Under rules prescribed by the
               Secretary, an item otherwise allocable to an
               individual under subparagraph (A) shall be
               allocated to the other individual filing the
               joint return to the extent the item gave rise
               to a tax benefit on the joint return to the
               other individual.

                 *    *    *      *      *     *    *

          (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
          individual 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
     liability. [Emphasis added.]

     Petitioner requests that we find:       (1) That the underpayment

for 1987 and the deficiency for 1992 are entirely attributable

and allocable to H. Smith and (2) that she was abused emotionally

and physically by a spouse who kept her ignorant of their tax

liabilities, based on her uncorroborated conclusory testimony in

response to leading questions.    The unsatisfactory quality of

petitioner’s testimony is shown by the following excerpts:

          Q [By petitioner’s counsel] And during the time
     that you were married to Mr. Smith did he ever abuse
     you emotionally or physically?
                          - 9 -

     A     Yes.

     Q    Who handled--who primarily handled the family
finances?

     A     He did.

     Q    Did you know the balances in any bank
accounts?

     A     No.

     Q     Were you able to sign on all the accounts?

     A     No.

     Q     What accounts could you sign on?

     A     The one that was specific for the home bills.

     Q    And would you have an estimate of how much
money on a monthly basis would have been in that
account?

     A    He would deposit a certain amount each month,
depending on what the bills totaled.

     Q     And would you tell him what the bills
totaled?

     A     Yes.

     Q     Is that how it worked?

     A     Yes.

     Q    Did you have any input in any investments
that he made?

     A     No.

     Q     Did you have any investments of your own?

     A     No.

     Q     During 1987 were you employed?

     A     No.
                           - 10 -

     Q    Were you employed during 1992?

     A    Yes.

     Q    Now, as it relates to paying taxes did you
ever have a discussion with your husband about who was
responsible for paying taxes?

     A    No.    Not–-

     Q    Did you--how did you think the taxes were
going to get paid each month?

     A    He handled all the taxes at the end of the
year. I would--he--I just assumed that he was handling
what was owed or not owed or–-

     Q    Okay.

     A    --those items.

     Q    So, Ms. Smith, is it your testimony the only
financial aspect of the family when you were married to
Hugh V. Smith was that you would pay basically the
household expenses. Is that correct?

     A    Yes.

     Q    Okay. Why was it that your husband handled
all the financial matters?

     A    That’s what he wanted to do.   That was-–

     Q    Okay.

     A    --just the way it had been for 20-some-odd
years is he handled everything but the basic home
expense.

     Q    Did he insist that they be done that way?

     A    Yes.

     Q    Did you have any say-so at all?

     A    No.
                               - 11 -

          Q    Did you believe that your husband was paying
     the family taxes?

          A    Yes.

          Q    Was there anything at all in just how your
     husband behaved that would indicate that he didn’t have
     the financial ability to pay the taxes?

          A    No.

          Q    Were you aware that he was ever negligent in
     paying taxes at the time?

          A    At that time?

          Q    Yes.

          A    No.

          Q    There was nothing that made you think that he
     wasn’t going to pay taxes for a year?

          A    No.

          Q    As far as you knew did he make all the tax
     payments on time?

          A    As far as I knew.

On cross-examination, petitioner testified:

          Q    * * * You stated that you believed your
     husband was paying taxes. What do you base your belief
     on?

          A    Nothing was said that there were--there was
     nothing told to me that bills were not being paid.

          Q     Did you ever ask him if he would be paying
     the taxes?

          A    I don’t recall.   I could have but I don’t
     recall asking him that.
                              - 12 -

Without any elaboration on the subject matter of petitioner’s

testimony, and based on her own words rather than her counsel’s,

we are not satisfied that her conclusions are based on facts.

     Petitioner testified in a similar manner that all income

other than her salary reported on the 1992 return was

attributable to her husband and that income taxes were withheld

from her earnings during 1992.   The stipulated facts, however,

contradict petitioner’s recollection of income taxes being

withheld.   According to the stipulation, no payments on the 1992

liabilities were made before 1998.     Any withholding from

petitioner’s wages would have been reflected as of April 1993.

In the absence of either the tax return or the notice of

deficiency for 1992, we cannot tell whether the deficiency

resulted from unreported income, from petitioner’s or H. Smith’s

income, or from disallowed deductions that were apparent on the

face of the return.

     Petitioner claims that she is entitled to relief under

section 6015(b), (c), or (f) for 1992 and under section 6015(f)

for 1987.   She concedes that, with respect to liabilities

reported on the return but not paid, relief is available only

under section 6015(f).   Petitioner relies on the above testimony

to establish that the understatement of tax for 1992 was

attributable to H. Smith and that she had no reason to know of

the deficiency.   Petitioner argues that it would be inequitable
                              - 13 -

to hold her responsible for the understatement based on her

response to questions about vacations and jewelry and separate

accounts.   She relies on the absence of the factors listed in the

statute as disqualifications, such as fraudulent intent or

transfers of property to avoid tax.    Otherwise, she has not cited

any evidence from which we could conclude that respondent abused

his discretion in denying relief under section 6015(f).    See

Cheshire v. Commissioner, 115 T.C. 183, 198 (2000).

     Because of the gaps in the record, we need not discuss the

separate elements of each type of relief provided by section

6015.   The record is insufficient for us to conclude that

petitioner is entitled to relief.   At the time of trial, the

original returns that were sent to the Internal Revenue Service

were not available.   Petitioner’s counsel stated at trial that

“we’ve got unsigned copies”, but the copies were not produced.

During the administrative consideration of petitioner’s claim for

relief under section 6015, petitioner was invited to present

additional information, but no further information was provided

by petitioner.

     The absence of corroborative testimony or documentation in

this case is troublesome.   Petitioner’s counsel claimed to have

served a subpoena duces tecum for trial on H. Smith and only

belatedly stated to the Court that the subpoena had been

disregarded.   Counsel cited H. Smith’s failure to appear as
                                - 14 -

indicative “of the fact that he is not cooperating.”      Petitioner

complains in her posttrial brief that respondent would not agree

to a posttrial deposition of H. Smith, but petitioner has not

shown any reason why the record should be reopened after trial

for the purpose of receiving evidence that cannot be described as

“newly discovered”.

     Petitioner argues that she had a reasonable belief that the

tax liability reported on the joint returns would be paid.      Her

alleged belief, however, was based only on the absence of

knowledge that payment would not be made.      She testified that she

did not inquire (or did not recall inquiring) whether or how that

amount would be paid.    The liability shown on the 1987 return

exceeded $60,000.    Petitioner is neither uneducated nor

unintelligent.    We do not believe that she would have been

disinterested in how such a large amount would have been paid or

oblivious about the family resources from which the taxes could

have been paid.

     The parties’ briefs dispute whether certain case precedents

are persuasive or distinguishable.       The record, however, does not

support findings sufficient to make a comparison to the

circumstances in prior cases.    Petitioner’s briefs assert facts

that are not in the record, see Rule 143(b), and petitioner seeks

to impose on respondent the burden of negating conclusory

testimony such as that quoted above.      We cannot, on this record,
                              - 15 -

attribute or allocate the items giving rise to the deficiency to

H. Smith.   We cannot conclude that it would be inequitable to

hold petitioner to the consequences of filing a joint return.    On

consideration of the entire record, we conclude that petitioner’s

bald assertions are not reliable.   We conclude further that

petitioner is not entitled to relief with respect to the

underpayment and penalties for 1987 or the deficiency and

penalties for 1992.

     To reflect the foregoing,

                                         Decision will be entered

                                    for respondent.
