                         T.C. Memo. 2002-280



                       UNITED STATES TAX COURT



                E. CAROLYN MELLEN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 4962-01.                 Filed November 7, 2002.



     W. Kevin Jackson, for petitioner.

     R. Craig Schneider, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     CHIECHI, Judge:    This case arises from a request for

equitable relief under section 6015(f)1 with respect to

petitioner’s taxable year 1995.   We must decide whether respon-


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

dent abused respondent’s discretion in denying petitioner relief

under that section for that year.    We hold that respondent did

not abuse respondent’s discretion.

                          FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.2

     At the time the petition was filed, petitioner resided in

Salt Lake City, Utah.

     Petitioner and Craig Richard Mellen (Mr. Mellen), who

married in 1970, have five children--Jamie, Rick, Andrea, Andrew,

and Justin--and one grandchild, Jessica, who is Jamie’s daughter.

At the time of the trial in this case, those children and that

grandchild were 32, 28, 26, 25, 23, and 14 years old, respec-

tively.

     After petitioner graduated from high school in 1959, she

completed a one-year course of study at Henagers Business Col-

lege, where she took courses in business, shorthand, and English.

After completing that course of study in 1960, petitioner became

employed, first as a medical claims clerk and then as a secre-

tary.    In 1970, when petitioner and Mr. Mellen had their first

child, petitioner stopped working and remained unemployed until

1988, when she accepted a part-time position with Salt Lake



     2
      Unless otherwise indicated or stated for clarity, all
findings of fact and conclusions herein that do not indicate the
times thereof pertain to the time of the trial in this case that
took place on May 14, 2002.
                              - 3 -

Community College.

     Since 1989, Questar InfoComm (Questar) has employed peti-

tioner as a secretary, for which she received the following

compensation during the years indicated:

              Year                         Compensation1
              1994                          $19,788.11
              1995                           22,691.49
              1996                                2
              1997                           25,791.07
              1998                           28,529.83
              1999                           33,783.53
              2000                           33,800.81
              2001                           31,963.39

          1
            State income tax, but no Federal income tax, was
     withheld from the compensation that petitioner received from
     Questar during 1994 and 1995. Federal income tax and State
     income tax were withheld from the compensation that peti-
     tioner received from Questar during 1997, 1998, 1999, 2000,
     and 2001.
          2
            The record does not disclose the amount of peti-
     tioner’s compensation from Questar during 1996, nor whether
     any Federal income tax or State income tax was withheld from
     that compensation.

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

compensation from Questar was $38,160.

     At all relevant times, petitioner’s employment with Questar

provided her, inter alia, certain health and dental benefits as

well as life and accident insurance and the right to participate

in a retirement plan (Questar retirement plan).   Petitioner

contributed the following amounts to the Questar retirement plan

during the years indicated:
                              - 4 -

              Year                      Amount Contributed
              1994                          $1,329.15
              1995                           1,502.82
              1996                               1
              1997                           1,713.93
              1998                           1,891.32
              1999                           2,224.62
              2000                           1,763.05
              2001                           2,050.00

          1
            The record does not disclose the amount, if any,
     that petitioner contributed to the Questar retirement
     plan during 1996.

As of March 2002, petitioner’s monthly contribution to the

Questar retirement plan was approximately $191, which Questar was

deducting from her compensation.

     After reducing petitioner’s annual compensation from

Questar, as reported in Form W-2, Wage and Tax Statement, for

each of the years 1994, 1995, and 1997 through 2001, by amounts,

if any, for Federal income tax, State income tax, Social Security

tax, Medicare tax, the cost of certain group-term life insurance,

and contributions to the Questar retirement plan that were

withheld from such compensation, petitioner’s annual net compen-

sation from Questar (petitioner’s annual net compensation) for

each such year was $16,735.37, $19,143.07, $21,474.13,

$23,634.42, $27,168.47, $25,412.16, and $23,851.05, respectively.

     At least as of the time of the trial in this case, peti-

tioner was investing $50 a month in a mutual fund and had a

balance in that mutual fund of $500.   At least as of March 2002,
                               - 5 -

petitioner was investing approximately $8 each month, which

Questar was deducting from her compensation each month, or

approximately $100 each year in savings bonds.3

     In April 1999, petitioner underwent surgery for colon

cancer.   In June 1999, petitioner again underwent surgery because

petitioner’s cancer had spread to her liver.   Thereafter, peti-

tioner has had regular checkups to monitor her recovery from

cancer.

     After graduating from high school around 1959, Mr. Mellen,

who is dyslexic, worked as a roofer.   At least as early as 1990,

Mr. Mellen became engaged in certain activities as an inventor

and sometime before 1995 was successful with respect to one of

his inventions.

     On July 15, 1994, Mr. Mellen was injured in an explosion

(July 15, 1994 accident).   Some of his property was also damaged

or destroyed in that explosion.   At all relevant times, peti-


     3
      In addition to the amounts that we have already found
Questar was deducting from petitioner’s compensation as of March
2002, Questar was deducting as of that time the following approx-
imate amounts each month from petitioner’s compensation:
(1) $140 for Federal income tax, (2) $113 for State income tax,
(3) $186 for Social Security tax, (4) $43 for Medicare tax,
(5) $96 for health benefits, (6) $30 for dental benefits, (7) $60
for reserved parking, (8) $52 for life insurance, (9) $5 for
accident insurance, (10) $300 for a $14,000 debt owed to the
State of Utah for State income tax with respect to taxable year
1995, (11) $17 for a legal service plan, (12) $168 payment on a
loan from the Questar retirement plan, (13) $173 payment on a
second loan from the Questar retirement plan, and (14) $77 for a
“Micro Computer 1" (the meaning of “Micro Computer 1" is not
disclosed by the record).
                                - 6 -

tioner knew about the July 15, 1994 accident as well as the

injuries that Mr. Mellen suffered and the damage or destruction

to his property caused by that accident.

     In a letter dated June 10, 1997, the Social Security Admin-

istration (SSA) determined that Mr. Mellen was disabled, that his

disability arose as of October 30, 1996, and that he satisfied

the medical requirements for Social Security disability benefits

(SS disability benefits).    Sometime after June 10, 1997, the SSA

determined that Mr. Mellen satisfied the nonmedical requirements

for SS disability benefits and that he was entitled to such

benefits as of April 1997.   At a time not disclosed by the

record, the SSA also determined that Mr. Mellen was entitled to

hospital insurance under Medicare as of April 1999.

     From at least March 1999 to the time of the trial in this

case, Mr. Mellen received monthly SS disability benefits that

ranged from approximately $900 to $949.

     At times that are not disclosed by the record, petitioner

and Mr. Mellen jointly filed Form 1040, U.S. Individual Income

Tax Return (return), for each of the taxable years 1986 through

1991.

     Sometime after October 15, 1996, but before October 23,

1996, petitioner and Mr. Mellen jointly filed a return for each
                              - 7 -

of the taxable years 1994 (1994 joint return)4 and 1995 (1995

joint return).5

     At times that are not disclosed by the record, petitioner

prepared, without the aid of a paid return preparer, and filed

returns using married filing separate status for the taxable

years 1992, 1993, and 1996 through 2000, respectively.   Sometime

between September 28, 2001, and April 18, 2002, petitioner

prepared, without the aid of a paid return preparer, a return

using head of household status for taxable year 2001 (2001

return), but did not sign or file that return.6

     The 1994 joint return reported, inter alia, adjusted gross

income of $19,815, taxable income of $0, compensation of $19,788

that petitioner received from Questar, taxable interest income of

$2, and dividend income of $25.

     The 1995 joint return reported, inter alia, adjusted gross

income of $355,340, taxable income of $315,704, compensation of

$22,691 that petitioner received from Questar, taxable interest


     4
      Petitioner and Mr. Mellen applied for and received exten-
sions until Oct. 15, 1995, within which to file the 1994 joint
return.
     5
      Petitioner and Mr. Mellen applied for and received exten-
sions until Oct. 15, 1996, within which to file the 1995 joint
return.
     6
      In the 2001 return, petitioner claimed Schedule A itemized
deductions of $3,051 for State and local income taxes, $3,106 for
real estate tax, $150 for personal property tax, $691 for mort-
gage interest, $3,775 for gifts to charity, and $3,000 for
attorney and accounting fees.
                               - 8 -

income of $35 from Cyprus Credit Union, dividend income of

$19,152,7 and Schedule D capital gain of $500,755 from the sale

of certain stock.8   The 1995 joint return claimed deductions for

Schedule A itemized deductions of $39,636, a Schedule C loss of

$127,219 relating to Mr. Mellen’s activities as an inventor, a

Schedule E loss of $29,144, and a casualty loss of $30,930 as a

result of the July 15, 1994 accident that caused damage to, or

destruction of, property that petitioner and Mr. Mellen claimed

Mr. Mellen used in his business (claimed casualty loss deduc-

tion).

     The Schedule A itemized deductions in the 1995 joint return

were for claimed State and local income taxes of $147, real

estate tax of $2,424, personal property tax of $100, mortgage

interest of $6,979, and gifts to charity of $37,205.    Schedule A

of the 1995 joint return listed $0 as the amount of medical

expenses for which petitioner and Mr. Mellen were not reimbursed

by insurance.

     The 1995 joint return showed total Federal income tax of

$79,467 and such tax due of $2,838.    Petitioner and Mr. Mellen


     7
      Schedule B, Interest and Dividend Income, Part II, of the
1995 joint return listed Questar among the payors of gross
dividends and/or other distributions on stock.
     8
      In arriving at Schedule D capital gain of $500,755, peti-
tioner and Mr. Mellen showed in Schedule D of their 1995 joint
return gains and losses from the sales of stock in the following:
“USPN”, “IRC”, “FONR”, “CWIDE”, “NHT”, “NAM”, and “SYBASE”.
                               - 9 -

did not pay any Federal income tax at the time they filed the

1995 joint return.   By February 3, 1997, petitioner and Mr.

Mellen paid in full the Federal income tax due shown in that

return, a penalty, and interest thereon.

     Sometime during 1997, an agent of respondent (examining

agent) commenced an examination of the 1995 joint return (respon-

dent’s examination).   Sometime after that examination commenced

but before September 8, 1998, the examining agent proposed nine

adjustments (proposed adjustments) to the 1995 joint return,

which included the proposed disallowance of the claimed casualty

loss deduction of $30,930.   As grounds for that proposed disal-

lowance, the examining agent concluded that if the alleged

casualty occurred at all, it occurred during 1994.   Sometime

after the examining agent proposed those adjustments but before

September 8, 1998, petitioner and Mr. Mellen disagreed with the

proposed adjustments and requested and had a conference with the

Internal Revenue Service (IRS) Appeals Office.   During that

conference, the IRS Appeals Office sustained only one of the

adjustments proposed by the examining agent, namely, the proposed

disallowance of the claimed casualty loss deduction.

     On September 8, 1998, petitioner and Mr. Mellen signed Form

870, Waiver of Restrictions on Assessment and Collection of

Deficiency in Tax and Acceptance of Overassessment, in which they

agreed to the disallowance of the claimed casualty loss deduction
                                - 10 -

for their taxable year 1995 and to the immediate assessment and

collection of a deficiency of $9,719 in Federal income tax, a

penalty of $486, and interest as provided by law.     On November

23, 1998, respondent assessed those amounts as well as interest

accruals thereon.   (We shall refer to those assessed amounts as

well as interest as provided by law accrued after November 23,

1998, as petitioner’s unpaid liability for 1995.)

     Petitioner did not enter into an installment agreement or

other arrangement to pay petitioner’s unpaid liability for 1995.

Nor did petitioner at any time attempt to borrow money on an

unsecured or secured basis in order to pay petitioner’s unpaid

liability for 1995.

     On March 26, 1999, petitioner filed with respondent Form

8857, Request for Innocent Spouse Relief (And Separation of

Liability and Equitable Relief), with respect to petitioner’s

unpaid liability for 1995.     (We shall refer to Form 8857 that

petitioner filed with respondent as petitioner’s Form 8857.)

Petitioner attached the following statement to petitioner’s Form

8857:

     TO WHOM IT MAY CONCERN:

          I am submitting this form because I am qualified
     in every way for equitable relief.

          I and my spouse have no community property. What
     property I do have is an inheritance from my parent’s
     estate.

          My husband runs his own business and is self-
                             - 11 -

     employed. I myself have no knowledge whatsoever of his
     business dealings, in particular his stock transac-
     tions. Further, I have never been involved in any of
     his business dealings.

           The only reason I signed the joint tax return in
     the first place was because his accountant thought it
     would be more convenient for him to file a joint re-
     turn.

     On September 10, 1999, in response to petitioner’s Form

8857, respondent’s Joint Compliance Branch sent petitioner a

letter (respondent’s September 10, 1999 letter to petitioner).

That letter stated in pertinent part:

     Thank you for your request for Relief from Joint and
     Several Liability (Form 8857) received March 26, 1999.

     [X] Please complete the enclosed Form 886-A, Relief
     from Joint and Several Liability Questionnaire.[1]

     The additional information should be returned within 30
     days from the date of this letter.

     If you have any questions, you may write to us at the
     address shown above, or you may call the above listed
     number. This is not a toll-free number.

     Thank you for your cooperation.
          1
           The record does not contain a copy of the “Relief
     from Joint and Several Liability Questionnaire” (ques-
     tionnaire) to which respondent’s September 10, 1999
     letter to petitioner referred.

Petitioner did not return a completed questionnaire to respon-

dent, nor did she otherwise respond to respondent’s September 10,

1999 letter to petitioner.

     On September 10, 1999, respondent’s Joint Compliance Branch

also sent Mr. Mellen a letter (respondent’s September 10, 1999
                              - 12 -

letter to Mr. Mellen).   That letter stated in pertinent part:

     This is to inform you that Carolyn Mellen, who filed a
     joint return with you for the tax year(s) shown above,
     has requested relief from joint and several liability
     under section 6015 * * *

     If we grant the requested relief, you alone will be
     solely liable for all or a portion of the tax liabil-
     ity. That is, the IRS may only collect the balance due
     from you. To insure the proper determination of who
     pays the balance owed, you may want to participate in
     the IRS proceedings by providing any of the following
     information by October 15, 1999.

           1.   Whether Carolyn Mellen knew or had rea-
                sons to know of the audit adjustments
                and/or the balance due on the income tax
                return(s) for the above tax period(s)
                when he/she signed the return(s).

           2.   The current marital status between you
                and Carolyn Mellen * * *

           3.   Whether Carolyn Mellen significantly
                benefited from the unpaid liability.

           4.   Why it would be fair or unfair to hold
                Carolyn Mellen liable for the tax lia-
                bility.

     Please provide specific details and appropriate docu-
     mentation that support your information. * * *

Mr. Mellen did not respond to the foregoing letter.9

     On October 29, 1999, respondent’s Joint Compliance Branch

sent petitioner another letter (respondent’s October 29, 1999

letter).   That letter stated in pertinent part:


     9
      Although Mr. Mellen did not respond to respondent’s Septem-
ber 10, 1999 letter to Mr. Mellen, in a letter dated Dec. 19,
1999, entitled “TRANSFER TO APPEALS REQUEST”, Mr. Mellen re-
quested that the examination of the 1994 joint return be trans-
ferred to an IRS Appeals officer (Appeals officer).
                                - 13 -

     We have determined that:

          [X] You are not entitled to relief from the under-
     statement of tax liability as an innocent spouse.

          [X] Explanation for why relief was not granted:
     You have not provided any information to show what the
     exam issues were and that you did not know or have any
     reason to know of the basis for the understatement of
     tax.

     If you want to appeal our decision, you must provide a
     statement why you disagree with our decision. We have
     provided space at the end of this letter for you to
     provide your statement of disagreement. If that space
     is not adequate, you may attach a separate statement
     with a copy of this letter. * * *

     On November 5, 1999, petitioner returned to respondent

respondent’s October 29, 1999 letter and indicated in the space

provided in that letter for petitioner’s statement of disagree-

ment (petitioner’s statement of disagreement) that she disagreed

with respondent’s determination that she was not entitled to

relief under section 6015.   In support of her disagreement,

petitioner asserted in pertinent part:

     I, Carolyn Mellen, disagree with the above IRS decision
     because: As I notified you previously, I have NO
     knowledge of my husband’s stock purchases or capital
     gains for the 1995. [sic] I can provide a copy of my
     W-2 form for that year, which I’m sure you probably
     already have. That was the total amount of my earn-
     ings. I had no benefit from any stock or capital
     gains. I believe the audit was a result of stock &
     capital gains concerns and not my measly income. I do
     not know what papers I was to provide for this investi-
     gation.* To my knowledge, I submitted everything I was
     asked to provide. I’m sure, if necessary, I can get a
     tax attorney to review my situation.

     Any further inquiries can be made by calling me at 325-
     5774 (801).[1]
                               - 14 -

        *        *       *       *       *       *        *

     *Was a letter sent asking for specific info?    If so, I
     did not receive it.

          1
            The following handwritten notation appeared in
     the margin of petitioner’s statement of disagreement
     near the telephone number that petitioner provided
     therein: “Disconnected called 11/9/00". The record
     does not disclose who made that notation. The tele-
     phone number at which petitioner indicated “Any further
     inquiries can be made by calling” was petitioner’s
     office telephone number at Questar.

     On February 14, 2000, respondent sent petitioner and Mr.

Mellen a notice of intent to levy with respect to taxable year

1995.   On March 24, 2000, in response to that notice, petitioner

sent respondent a letter.    That letter stated in pertinent part:

     I have filed for Innocent Spouse Relief for this par-
     ticular year and was told that since a decision is
     still pending and is in Appeals Court [sic], no action
     should be taken against me or my property.

     My husband was ill advised as to how to file taxes for
     the year 1995. He should not have filed a joint re-
     turn, and I would not have to appeal this matter. I
     have a W-2 that specifically shows what money I earned
     for 1995. I in no way had anything to do with his
     capital gains.

     On November 14, 2000, an Appeals officer met with petitioner

(November 14, 2000 hearing) for at least 30 minutes and no more

than one hour.   The purpose of that hearing was to discuss

petitioner’s request for equitable relief under section 6015(f).

At the November 14, 2000 hearing, the Appeals officer questioned

petitioner, and petitioner had the opportunity to present infor-

mation including documentation, with respect to her claim for
                             - 15 -

equitable relief under section 6015(f).   Although petitioner knew

prior to the November 14, 2000 hearing that the Appeals officer

wanted to discuss with her the reasons why she believed that she

was entitled to equitable relief under section 6015(f), peti-

tioner did not bring with her to that hearing any documentation

supporting her position that she was entitled to such relief.

     The Appeals officer considered all of the information that

petitioner shared with him during the November 14, 2000 hearing.

As reflected in respondent’s administrative record pertaining to

petitioner (respondent’s administrative record) which the Appeals

officer created and/or on which he relied in arriving at his

determination that petitioner was not entitled to equitable

relief under section 6015(f), petitioner informed the Appeals

officer at that hearing that as of the date of that hearing:

(1) She was “still married to her husband, Craig Mellen, with

whom she filed the joint 1995 Form 1040”; (2) she “signed the

1995 Form 1040 because her husband told her that that is what the

accountant wanted” but had “never met the accountant”; (3) she

“prepared her own income tax returns when she filed income tax

returns separately from her husband” and “did not use a paid

return preparer for completing or filing these income tax re-

turns”; (4) she “has been working for eleven years”; (5) she “and

her husband support the household”; (6) “her husband pays the

mortgage payments to their home with his disability income”;
                             - 16 -

(7) “her salary was about $2,700 a month in November of 2000";

(8) “she has a married daughter that helps out with the family

expenses by contributing a couple hundred dollars a month”;

(9) “her husband has had two major accidents, which have left his

legs unusable”; (10) “her husband is not working, and * * *

receives less than $900 a month in disability income”; (11) “her

husband was an inventor in 1995"; (12) “her husband changed

careers from the roofing industry to the invention industry in

about 1990"; (13) “she has lived in her present house since about

1987"; (14) “her house is worth about $300,000"; (15) “as of

November of 1995, she and her husband owed approximately $15,000

on the only mortgage on the house” and “she had a 15-year mort-

gage, and * * * it would be paid off in a couple of years”;

(16) “her assets are in a trust”; (17) “she really did not own

anything other than the house”; (18) “she has not considered

refinancing her house to pay off the tax liability”; (19) “the

income she and her husband reported on their 1995 Form 1040 was

largely lost in the stock market, but that she used some of it to

pay for a wedding”; (20) “she pays taxes on her own wages, but

* * * she does not feel she should pay her husband’s taxes”; and

(21) “her husband blames everyone else for his problems”.

     On November 17, 2000, the Appeals officer and Mr. Mellen

spoke over the telephone with respect to, inter alia, peti-
                             - 17 -

tioner’s request for equitable relief under section 6015(f).10

     As reflected in respondent’s administrative record, the

Appeals officer summarized in pertinent part as follows his

conclusions with respect to petitioner’s claim for equitable

relief under section 6015(f) in a document dated February 1,

2001, and entitled “Brief Narrative for Appeals Case Memo”:

     The basis for the additional assessment was the casu-
     alty loss claimed in 1995. The casualty actually
     happened, and should have been claimed, in 1994. Craig
     Mellen was at work in his warehouse when it blew up.
     He was injured, and he lost a lot of his property.
     Carolyn Mellen knew about the accident, and helped her
     husband get through it. No reason was given as to why
     the casualty loss was not claimed in 1994. However,
     there was no tax liability in 1994.

     There are two tiers of conditions that must be met to
     grant innocent spouse relief under section 6015(f).
     Carolyn meets the seven conditions under tier one (also
     referred to as general requirements).

     A problem does exist, however, in meeting the factors
     under tier 2 (also known as local factors).

     There appear to be no factors weighing in favor of
     equitable relief for the requesting spouse.

     The following facts weighing against equitable relief
     are considered:

          1.   The requesting spouse is still married to the
               taxpayer. They still live in the same house, and
               there is no indication of an imminent divorce.
               The requesting spouse works, and her husband col-
               lects disability income. The household expenses
               are shared with the income available.


     10
      On at least one occasion after Nov. 17, 2000, the Appeals
officer and Mr. Mellen discussed over the telephone Mr. Mellen’s
claims and/or concerns with respect to the 1994 joint return.
                                - 18 -


            2.    Knowledge of the event. The requesting spouse new
                  [sic] of the accident that her husband was in-
                  volved in. She also knew when it happened. In
                  prior and subsequent years, she filled out her own
                  tax returns in order to file separately. She
                  appears to have the knowledge of when a deduction
                  can be claimed.

            3.    Lack of economic hardship. The requesting spouse
                  has indicated that the Service [sic] is in the
                  process of garnishing her wages, and that will
                  leave them in a position where they cannot pay
                  their bills. However, the taxpayer also indicated
                  that they are living in a $300,000 home which will
                  be paid off in a couple of years. The taxpayers
                  have not considered refinancing the home to pay
                  the tax.

            4.    The additional liability is not solely due to the
                  non-requesting spouse. Even though the casualty
                  took place in the non-requesting spouse’s work
                  environment, the requesting spouse had benefit of
                  the results of that work. She elected to file the
                  joint return, knowing that the tax would be lower.

     In conclusion, Carolyn meets the threshold requirements
     for equitable relief. She does not have any of the
     factors for equitable relief that are in her favor. It
     is recommended that Carolyn not be granted innocent
     spouse relief for 1995 under Section 6015(f).

     On February 14, 2001, the IRS Appeals Office sent petitioner

a determination letter regarding petitioner’s claim under section

6015(f) with respect to taxable year 1995.    That letter stated in

pertinent part:

     We’re writing to tell you that we’ve made a decision
     about your November 5, 1999 request for innocent spouse
     relief under Section 6015(f) of the Internal Revenue
     Code.

        *         *       *       *       *       *       *

     We’ve determined that, for the above tax year(s), we:
                                     - 19 -

             •     cannot allow your request.

     You had     knowledge of the casualty loss and when it took
     place.      Your 1995 return was examined by the Internal
     Revenue     Service, and you agreed to moving the loss from
     1995 to     1994.

     The schedule below shows any adjustments we’ve made to
     your account.

                       Amount of relief Amount of relief   Amount of tax
      Tax Period(s)      you requested   we could allow      remaining
                       [1]                                 [1]
          * * * 1995         $10,205.00       $0.00           $10,205.00
             1
           The amount shown is the total of the Federal
     income tax of $9,719 and the penalty of $486 that
     respondent had assessed with respect to petitioner’s
     taxable year 1995.

     Petitioner and Mr. Mellen, both of whom were about 60 years

old at the time of the trial in this case, own the residence in

which they have been living since 1987.           (For convenience, we

shall refer to the real property owned by petitioner and Mr.

Mellen at which they have been living since 1987 as petitioner’s

residence.)      During the period from at least March 1999 until

sometime during 2001, Jamie and her daughter Jessica were living

in petitioner’s residence.          During at least November 2000, Rick,

Andrew, and Jamie’s “significant other” Glen also were living in

petitioner’s residence.          Sometime during 2001, Jamie, Jessica,

and Glen moved out of petitioner’s residence.11

     11
      Although petitioner advised the Appeals officer during the
November 14, 2000 hearing that her daughter Jamie helped “out
with the family expenses by contributing a couple hundred dollars
a month” while Jamie and her daughter Jessica, inter alia, were
living in petitioner’s residence, those payments ceased sometime
                                                   (continued...)
                                   - 20 -

       Mr. Mellen was the general contractor for, and oversaw, the

construction of petitioner’s residence during the 1980s.       Al-

though petitioner and Mr. Mellen have been living in that resi-

dence since 1987, as of the time of the trial in this case,

certain work on petitioner’s residence remained unfinished,

including completing the installation of gutters, certain

stuccowork, certain cement work, certain sheetrock work in the

garage, and certain landscaping in the backyard.       The unfinished

sheetrock work in the garage of petitioner’s residence has

prevented petitioner and Mr. Mellen from obtaining a certificate

of occupancy for that residence.       Without such a certificate of

occupancy, the local authorities will not approve petitioner’s

residence for permanent, as opposed to temporary, power.

       Since at least March 1999, petitioner and Mr. Mellen have

had certain maintenance problems with petitioner’s residence,

including certain cracked ceramic tiles, certain leaky

plumbing,12 wood rot in certain windows, certain flooding and

mildew problems in the basement, and a missing piece of flashing

from the roof.       As of the time of the trial in this case, Mr.

Mellen had fixed the leaky plumbing in petitioner’s residence,



       11
      (...continued)
during 2001 when Jamie, Jessica, and Glen moved out of peti-
tioner’s residence.
       12
            The leaky plumbing in question caused certain sheetrock to
rot.
                              - 21 -

but neither petitioner nor Mr. Mellen had repaired any of the

other maintenance problems in that residence.

     Petitioner’s residence does not contain any item of personal

property valued in excess of $800.13   Petitioner does not own any

sterling silverware, furs, coin collections, or a wedding ring.

     For purposes of 2000 real property taxes, Salt Lake County,

Utah (Salt Lake County), determined that the total market value

of petitioner’s residence consisting of the house and the land on

which that house was located was $317,900.14    For purposes of

2001 real property taxes, Salt Lake County determined that the

total market value of petitioner’s residence consisting of the

house and the land on which that house was located was

$310,100.15

     At the time of the trial in the instant case, petitioner and

Mr. Mellen owned petitioner’s residence free and clear of any

encumbrances.   As of that time, petitioner had not attempted to

obtain a loan secured by petitioner’s residence in order to pay


     13
      The only new piece of furniture in petitioner’s residence
was a couch that one of petitioner’s sons purchased.
     14
      Salt Lake County determined that, for purposes of 2000
real property taxes, the market values of the house and the .44
acres of land on which that house was located were $263,700 and
$54,200, respectively, and the real property tax on petitioner’s
residence was $2,866.23.
     15
      Salt Lake County determined that, for purposes of 2001
real property taxes, the market values of the house and the .44
acres of land on which that house was located were $255,900 and
$54,200, respectively.
                              - 22 -

petitioner’s unpaid liability for 1995.

     Petitioner and Mr. Mellen owned free and clear of any

encumbrances a 1991 Infiniti automobile, a 1988 Toyota truck,16

and another truck that needed repair.   At the time of the trial

in this case, petitioner was driving her son’s car because the

1991 Infiniti that she usually drove needed repair.

     In addition to petitioner’s unpaid liability for 1995, at

the time of trial in the instant case, the debts of petitioner

and/or Mr. Mellen were:   (1) $14,000 to the State of Utah for

State income tax with respect to the taxable year 1995, (2) a

$545 judgment for a medical bill, (3) a debt in an undisclosed

amount for money borrowed at an undisclosed time from the Questar

retirement plan, and (4) $9,000 to the Questar retirement plan

for a second loan that petitioner used sometime after the Novem-

ber 14, 2000 hearing with the Appeals officer but before the date

of the trial in this case in order to make the final balloon

payment with respect to the mortgage on petitioner’s residence.17




     16
      A neighbor gave the 1988 Toyota truck to Mr. Mellen at a
time not disclosed by the record because it was not working, and
the neighbor thought that Mr. Mellen might be able to make the
repairs necessary for that truck to become functional.
     17
       As of at least January 2002, petitioner had been unable to
obtain another loan from the Questar retirement plan. That is
because, since at least that time, the maximum number of out-
standing loans permitted under the Questar retirement plan at any
one time was two (i.e., one general loan and one residential
loan).
                              - 23 -

                              OPINION

     We review respondent’s denial of relief under section

6015(f) for abuse of discretion.18   Butler v. Commissioner, 114

T.C. 276, 292 (2000).   Petitioner bears the burden of proving

that respondent abused respondent’s discretion in denying her

relief under section 6015(f).19   See Jonson v. Commissioner, 118

T.C. 106, 125 (2002).

     Section 6015(f) provides:

     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 individ-
          ual under subsection (b) or (c),

     the Secretary may relieve such individual of such
     liability.



     18
      In so holding, we reject petitioner’s contention in her
opening brief, which she appears to abandon in her answering
brief, that “the Commissioner’s determination * * * is entitled
to a presumption of correctness”. See Butler v. Commissioner,
114 T.C. 276, 292 (2000).
     19
      In so holding, we reject petitioner’s contention that sec.
7491(a) shifts the burden of proof to respondent in the instant
case. See Jonson v. Commissioner, 118 T.C. 106, 125 (2002). In
any event, the record establishes that respondent’s examination
of the 1995 joint return commenced in 1997. See sec. 7491(a);
Internal Revenue Service Restructuring and Reform Act of 1998,
Pub. L. 105-206, sec. 3001(c), 112 Stat. 727.
                                - 24 -

     In the instant case, the parties agree that relief is not

available to petitioner under section 6015(b) or (c), thereby

satisfying section 6015(f)(2).20

     We turn first to a dispute between the parties as to the

scope of the record upon which we should determine whether

respondent abused respondent’s discretion in denying petitioner

relief under section 6015(f).    As we understand her position,

petitioner contends that that record should include not only the

information that petitioner presented to respondent during

respondent’s administrative consideration of petitioner’s request

for relief under section 6015(f) but also the additional informa-

tion (petitioner’s additional information) that petitioner

presented at trial and that is part of the record in this case.

Respondent counters that the Court should determine whether

respondent abused respondent’s discretion in denying petitioner

relief under section 6015(f) only on the basis of the information

that petitioner presented to respondent during respondent’s

administrative consideration of her request for that relief.21


     20
      The Court’s jurisdiction in this case is dependent upon
sec. 6015(e)(1). See Ewing v. Commissioner, 118 T.C. 494, 496-
497 (2002), Fernandez v. Commissioner, 114 T.C. 324, 330-331
(2000); Butler v. Commissioner, supra at 289-290.
     21
      In this connection, respondent objected at trial, inter
alia, to certain evidence as irrelevant and immaterial to the
issue of whether respondent abused respondent’s discretion in
denying petitioner equitable relief under sec. 6015(f). We
overruled respondent’s objections and indicated that, in deter-
                                                   (continued...)
                               - 25 -

We need not resolve the foregoing dispute between the parties.

That is because, based upon our examination of the entire record

in this case, including petitioner’s additional information that

is part of the record established at trial, we find that peti-

tioner has failed to carry her burden of showing that respondent

abused respondent’s discretion in denying her relief under

section 6015(f) with respect to taxable year 1995.22

     We initially address certain of the arguments that peti-

tioner advances on brief, all of which we find to be without

merit.    To illustrate, petitioner argues on brief that

     a ruling in favor of the spouse [petitioner] does not
     mean the tax debt is forgiven or that it will never be
     paid. It only means that based upon the present facts
     and circumstances, it is not equitable to compel the
     requesting spouse [petitioner] to pay the tax debt in
     full at this time. * * * If an economic hardship is
     present, then Congress has declared that the present
     collection of the tax is to be suspended as to the


     21
      (...continued)
mining whether respondent abused respondent’s discretion in
denying that relief, we would give whatever weight we consider
appropriate to the evidence to which respondent objected.
     22
      In so holding, we have considered petitioner’s contention
that respondent did not fulfill what petitioner claims was
respondent’s responsibility to investigate and ascertain during
the administrative consideration of petitioner’s request for
relief under sec. 6015(f) all of the facts and circumstances with
respect to petitioner’s claim for equitable relief under sec.
6015(f). Regardless of whether or not petitioner’s contention
has any merit, petitioner had the opportunity at trial to intro-
duce admissible evidence into the record that established all of
the facts which she claims respondent had a duty to investigate
and ascertain and on which she relies in order to show that
respondent abused respondent’s discretion in denying her relief
under sec. 6015(f).
                              - 26 -

     requesting spouse [petitioner].

We reject petitioner’s views regarding the nature of the relief

from joint and several liability provided by section 6015.

Relief under that section from joint and several liability is

not, as petitioner alleges, the temporary suspension of such

liability.   See sec. 6015.

     By way of further illustration, petitioner argues on brief

that Revenue Procedure 2000-15, 2000-1 C.B. 447 (Revenue Proce-

dure 2000-15), which prescribes procedures that are to be used in

determining whether an individual qualifies for relief under

section 6015(f), “is fundamentally flawed in that it unduly

limits the broad application of the statute seeking to provide

tax collection relief to a spouse” and considers facts and/or

circumstances that are “legally irrelevant” and inappropriate in

this case.   We reject those arguments about Revenue Procedure

2000-15.

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

procedures in Revenue Procedure 2000-15 that are to be used in

determining whether an individual qualifies for relief under that

section.   Section 4.01 of Revenue Procedure 2000-15 lists seven

conditions (threshold conditions) which must be satisfied before

the IRS will consider a request for relief under section 6015(f).

Respondent concedes that those threshold conditions are satisfied

in the instant case.   Where, as here, the requesting spouse
                               - 27 -

satisfies the threshold conditions, section 4.01 of Revenue

Procedure 2000-15 provides that a requesting spouse may be

relieved under section 6015(f) of all or part of the liability in

question if, taking into account all of the facts and circum-

stances, the IRS determines that it would be inequitable to hold

the requesting spouse liable for such liability.

     Where, as here, the requesting spouse satisfies the thresh-

old conditions set forth in section 4.01 of Revenue Procedure

2000-15, section 4.02 of that revenue procedure sets forth the

circumstances, 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).   In the instant

case, the liability from which relief is sought arises from a

deficiency.   Therefore, section 4.02 of Revenue Procedure 2000-15

is not applicable here.23   However, where, as here, the request-

ing spouse fails to qualify for relief under section 4.02 of that

revenue procedure, the IRS may nonetheless grant the requesting

spouse relief under section 4.03 of Revenue Procedure 2000-15.

That section provides a partial list of positive and negative

factors which respondent is to take into account in considering



     23
      Assuming arguendo that sec. 4.02, Rev. Proc. 2000-15,
2000-1 C.B. 448, were applicable in the instant case, petitioner
would not qualify for relief under that section of that revenue
procedure. That is because petitioner has failed to show that
the circumstances set forth in sec. 4.02 of Revenue Procedure
2000-15 are present in the instant case.
                              - 28 -

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 now turn to the application of section 4.03 of Revenue

Procedure 2000-15 to the record established in the instant case.

As pertinent here, 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
     * * * 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 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.
                             - 29 -

          (f) Attributable to nonrequesting spouse. The
     liability for which relief is sought is solely attrib-
     utable 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

Procedure 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, respec-

tively.)

     With respect to the marital status positive factor set forth

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

concedes that the marital status positive 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 2000-15,24


     24
      In determining whether a requesting spouse will suffer
economic hardship, sec. 4.02(1)(c) of Revenue Procedure 2000-15,
to which sec. 4.03(1)(b) of that revenue procedure refers,
requires reliance on rules similar to those provided in sec.
301.6343-1(b)(4), Proced. & Admin. Regs. Sec. 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. Sec.
301.6343-1(b)(4), Proced. & Admin. Regs., provides in pertinent
part:

          (ii) Information from taxpayer. In determining a
     reasonable amount for basic living expenses the direc-
     tor will consider any information provided by the
     taxpayer including–-
                                                   (continued...)
                               - 30 -



petitioner contends that that positive factor is present in this

case.

     Petitioner has established that as of the time of the trial

in this case she and/or Mr. Mellen was liable for a $545 judgment

for a medical bill.   She has also shown that as of March 2002,

Questar was deducting the following approximate amounts each

month from her compensation:   (1) $140 for Federal income tax,

(2) $113 for State income tax, (3) $186 for Social Security tax,

(4) $43 for Medicare tax, (5) $96 for health benefits, (6) $30

     24
      (...continued)
               (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

               (F) Any other factor that the taxpayer claims
     bears on economic hardship and brings to the attention
     of the director.
                               - 31 -

for dental benefits, (7) $60 for reserved parking, (8) $52 for

life insurance, (9) $5 for accident insurance, (10) $300 for a

$14,000 debt owed to the State of Utah for State income tax with

respect to taxable year 1995, (11) $17 for a legal service plan,

(12) $168 on a loan from the Questar retirement plan, (13) $173

on a second loan from the Questar retirement plan, (14) $77 for a

“Micro Computer 1" (the meaning of “Micro Computer 1" is not

disclosed by the record), (15) $191 as a contribution to the

Questar retirement plan, and (16) $8 for savings bonds.   Further-

more, petitioner has shown that at least as of the time of the

trial in this case, she was investing $50 a month in a mutual

fund and had a balance in that mutual fund of $500.   However, on

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

establish the amounts of any other expenditures, let alone

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

indicates are to be considered in determining a reasonable amount

for basic living expenses.25   We further find on the record


     25
      In an effort to establish certain expenses that sec.
301.6343-1(b)(4), Proced. & Admin. Regs., indicates are to be
considered in determining a reasonable amount for basic living
expenses, petitioner proffered at trial certain documentary
evidence. The documentary evidence that petitioner proffered
consisted of nothing more than petitioner’s self-serving summa-
ries of expenses that she claims to have incurred. Respondent
objected to the admission of that evidence pursuant to Fed. Rules
of Evid. 802 and 1006. We sustained respondent’s objections.
Petitioner did not substantiate by reliable documentary evidence
most of the expenses claimed in such summaries. To the extent
that petitioner substantiated any such expenses by reliable
                                                   (continued...)
                              - 32 -

before us that petitioner has failed to persuade us that she

would not be able to pay a reasonable amount for basic living

expenses if she remained jointly and severally liable for peti-

tioner’s unpaid liability for 1995.26   The record before us

establishes that petitioner, inter alia:   (1) Has been employed



     25
      (...continued)
documentary evidence, we have found that she established such
expenses.
     26
      In attempting to persuade us that she would not be able to
pay a reasonable amount for basic living expenses if she were not
granted relief under sec. 6015(f), petitioner advances various
contentions, all of which we find to be without merit. To
illustrate, petitioner appears to contend that the $545 judgment
obtained for an unpaid medical bill, which judgment remained
unsatisfied as of the time of the trial herein, shows that she
has been unable to pay a reasonable amount for basic living
expenses. However, petitioner testified that the underlying
medical bill with respect to which the $545 judgment in question
was obtained “has been paid off.” Petitioner apparently disputes
the validity of the $545 judgment in question and therefore has
refused to pay it. On the record before us, we find that peti-
tioner’s testimony does not establish that petitioner has been
unable to pay the $545 judgment in question.

     By way of further illustration, petitioner contends on brief
that petitioner’s “telephones had been disconnected for three
(3) months”, the implication being that petitioner was not able
to afford to pay her telephone bill. To support her contention
regarding her inability to pay her telephone bill for 3 months,
petitioner relies on the notation “Disconnected called 11/9/00"
that appeared in the margin of petitioner’s statement of dis-
agreement with respect to respondent’s October 29, 1999 letter
stating that she was not entitled to relief under sec. 6015(f).
We reject the inference that petitioner attempts to draw from
that notation. The record establishes that the number shown in
petitioner’s statement of disagreement was petitioner’s telephone
number at Questar, and not her home telephone number. Further-
more, petitioner’s contention that “telephones had been discon-
nected for three (3) months” is not supported by any evidence in
the record.
                             - 33 -

by Questar since 1989; (2) was earning annual compensation of

$38,160 at the time of the trial in this case; (3) contributed

regularly each pay period to the Questar retirement plan;

(4) invested monthly in a mutual fund; (5) invested regularly

each pay period in savings bonds; (6) has undisclosed assets in a

trust; and (7) has an inheritance from her “parent’s estate”.

The record also establishes (1) that at the time of the trial in

this case Mr. Mellen was receiving monthly SS disability benefits

of $949 and was entitled as of April 1999 to hospital insurance

under Medicare, (2) that petitioner and Mr. Mellen owned peti-

tioner’s residence and their automobiles free and clear of any

encumbrances, (3) that petitioner’s residence had an assessed

market value of $317,900 in 2000 and $310,100 in 2001, and

(4) that petitioner has not attempted to obtain a loan secured by

petitioner’s residence in order to pay petitioner’s unpaid

liability for 1995.

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

to carry her burden of establishing that the economic hardship

positive factor set forth in section 4.03(1)(b) of Revenue

Procedure 2000-15 is present in the instant case.

     With respect to the abuse positive factor set forth in

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

concedes that that positive factor is not present in the instant

case.
                               - 34 -

     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 does not dispute that that positive factor is not

present in the instant case.    Instead, she argues that that

factor is “legally irrelevant” to determining whether she is

entitled to equitable relief under section 6015(f).    We disagree.

We find that whether a spouse requesting relief under section

6015(f) knew or had reason to know of the item giving rise to a

deficiency is a relevant factor in determining whether such

spouse is entitled to such relief.

     With respect to the legal obligation positive factor set

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

record before us, we find this factor to be a neutral factor in

the instant case.   That is because at all relevant times peti-

tioner and Mr. Mellen were married.

     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

because “It was Craig Mellen’s activities (i.e. the fire and the

subsequent explosion) that generated a casualty loss.”    We agree

with petitioner.    The claimed casualty loss deduction of $30,930

in the 1995 joint return is the item that gave rise to the

deficiency for 1995 (and the resulting unpaid liability for

1995), and that claimed deduction was attributable to the July
                              - 35 -

15, 1994 accident in which Mr. Mellen’s property was damaged or

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

carried 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 the instant 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, as pertinent here, 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 * * *. This is an extremely
     strong factor weighing against relief. Nonetheless,
     when the factors in favor of equitable relief are
     unusually strong, it may be appropriate to grant relief
     under § 6015(f) * * * in very limited situations 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
     deficiency. * * *

          (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
                             - 36 -

     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

Procedure 2000-15 as the attribution negative factor, the knowl-

edge 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, respectively.)

     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

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.   We also

note that the parties do not dispute that the attribution nega-

tive 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.27


     27
      Although we do not believe that those two factors are
exactly opposite because, inter alia, the attribution negative
factor does not contain the word “solely” that appears in the
attribution positive factor, we conclude that respondent’s use of
                                                   (continued...)
                               - 37 -

     With respect to the attribution negative factor set forth in

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

that petitioner carried her burden of establishing that the

attribution positive factor set forth in section 4.03(1)(f) of

that revenue procedure is present in the instant case.    On the

record before us, we further find that petitioner has carried her

burden of establishing that the attribution negative factor set

forth in section 4.03(2)(a) of Revenue Procedure 2000-15 is not

present in the instant case.

     With respect to the knowledge or reason to know negative

factor set forth in section 4.03(2)(b) of Revenue Procedure 2000-

15, we indicated above that petitioner does not dispute that the

knowledge or reason to know positive factor set forth in section

4.03(1)(d) of that revenue procedure is not present in the

instant case.   Nor does petitioner dispute that the knowledge or

reason to know negative factor set forth in section 4.03(2)(b) of

that revenue procedure is present in the instant case.    Instead,

petitioner contends, as she does with respect to the knowledge or

reason to know positive factor, that the knowledge or reason to

know negative factor is “legally irrelevant” to resolving whether

petitioner is entitled to relief under section 6015(f).    We found


     27
      (...continued)
the word “solely” in describing the attribution positive factor
but not in describing the attribution negative factor does not
affect our findings and conclusions with respect to those factors
in the instant case.
                             - 38 -

above and restate here that whether a spouse requesting relief

under section 6015(f) knew or had reason to know of the item

giving rise to a deficiency is relevant in determining whether

such spouse is entitled to such relief.

     With respect to the significant benefit negative factor set

forth in section 4.03(2)(c) of Revenue Procedure 2000-15 (i.e.,

whether the requesting spouse has significantly benefited beyond

normal support from the unpaid liability or item giving rise to

the deficiency), petitioner contends on brief that she did not

significantly benefit from the item giving rise to the deficiency

because it “did not significantly increase her wealth, her

standard of living, or provide any meaningful benefit in excess

of the support she is otherwise entitled to receive from her

spouse under state law.”

     We find on the instant record that petitioner has failed to

establish the amount that she and Mr. Mellen expended annually

for their normal support during 1994, 1995 (the year to which the

unpaid liability at issue relates), and thereafter.   Nonetheless,

it is reasonable to assume that the amount that they expended

annually for such support during 1994 and 1997 through 2001 did

not exceed their annual net income (i.e., the total of peti-

tioner’s net compensation from Questar, Mr. Mellen’s disability

benefits, and any interest, dividends, and other income disclosed
                              - 39 -

by the record) for each such year (annual net income).28   During

the period 1994 and 1997 through 2001, the record establishes

that the annual net income that petitioner and Mr. Mellen re-

ceived ranged from approximately $17,000 to $38,500.

     The claimed casualty loss deduction of $30,930 gave rise to

a deficiency of $9,719 for taxable year 1995.    By not paying that

$9,719 of Federal income tax, petitioner and Mr. Mellen had an

additional $9,719 of funds available to spend.   The deficiency of

$9,719 attributable to the casualty loss deduction that peti-

tioner and Mr. Mellen claimed for taxable year 1995 ranged from

approximately 25 percent to 57 percent of the annual net income

of petitioner and Mr. Mellen during the period 1994 and 1997

through 2001.   We find that, by not paying the Federal income tax

of $9,719 attributable to the claimed casualty loss deduction in

question, petitioner and Mr. Mellen had funds available to them

(i.e., $9,719) substantially in excess of their normal support,

which we assume did not exceed their annual net income for each



     28
      We have not made any such assumption regarding 1995 or
1996. We have not done so with respect to 1995 because peti-
tioner testified that “the income she and her husband reported on
their 1995 Form 1040 [i.e., petitioner’s compensation from
Questar of $22,691, taxable interest of $35, dividend income of
$19,152, and Schedule D capital gain of $500,755] was largely
lost in the stock market, but that she used some of it to pay for
a wedding”. We have not made any assumption with respect to 1996
about the amount that petitioner and Mr. Mellen expended for
their normal support during that year. That is because the
record is devoid of any financial information relating to peti-
tioner and Mr. Mellen for that year.
                              - 40 -

of the years 1994 and 1997 through 2001.

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

to persuade us that she did not significantly benefit beyond

normal support from the $9,719 of Federal income tax not paid for

taxable year 1995.   On that record, we further find that peti-

tioner has failed to carry her burden of establishing that the

significant benefit negative factor set forth in section

4.03(2)(c) of Revenue Procedure 2000-15 is not present in the

instant case.

     With respect to the economic hardship negative factor set

forth in section 4.03(2)(d) of Revenue Procedure 2000-15, we

found above that petitioner failed to carry her burden of estab-

lishing that the economic hardship positive factor set forth in

section 4.03(1)(b) of that revenue procedure is present in the

instant case.   On the record before us, we further find that

petitioner has failed to carry her burden of establishing that

the economic hardship negative factor set forth in section

4.03(2)(d) of Revenue Procedure 2000-15 is not present in the

instant 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 filed all federal income tax returns

required of her since she entered the work force after her

graduation from high school” and that “She has paid all federal
                                - 41 -

income tax liabilities that she owes, but for the single tax year

in question.”    The parties stipulated that “For tax years * * *

1996 through 2000, petitioner filed income tax returns”.    Respon-

dent does not contend that petitioner did not pay any Federal

income tax shown due in each such return.    With respect to

taxable year 2001, the record contains an unsigned Form 1040 for

that year.29    On the record before us, we find that petitioner

has established that she has made a good faith effort to comply

with the Federal income tax laws following taxable year 1995.      We

further find on that record that petitioner has carried her

burden of establishing that the noncompliance negative factor is

not present in the instant case.

     With respect to the legal obligation negative factor set

forth in section 4.03(2)(f) of Revenue Procedure 2000-15, we

found above that the legal obligation positive factor set forth

in section 4.03(1)(e) of Revenue Procedure 2000-15 is a neutral

factor in the instant case.    On the record before us, we further

find that the legal obligation negative factor set forth in

section 4.03(2)(f) of that revenue procedure is a neutral factor

in the instant case.

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

to carry her burden of establishing any other factors with


     29
      The record does not establish that petitioner had filed
the unsigned Form 1040 for 2001 as of May 14, 2002, the date of
the trial in this case.
                             - 42 -

respect to the year 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

showing that respondent abused respondent’s discretion in denying

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

1995.

     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.
