                   T.C. Summary Opinion 2008-108



                      UNITED STATES TAX COURT



        CHARLENE DONIA STRINZ, n.k.a. CHARLENE MONTOUR,
   Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent

   CHARLENE D. STRINZ, n.k.a. CHARLENE MONTOUR, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 20179-05S, 897-06S.    Filed August 25, 2008.



     Charlene Montour, pro se.

     Robert V. Boeshaar and Jessica Yu, for respondent.



     GERBER, Judge:   These cases1 were heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect




     1
       Docket No. 20179-05S concerns the 1995 and 1996 tax years
and docket No. 897-06S concerns the 1994 tax year for petitioner.
                                - 2 -

when the petitions were filed.2   Pursuant to section 7463(b), the

decisions to be entered are not reviewable by any other court,

and this opinion shall not be treated as precedent for any other

case.

     Petitioner sought relief from joint and several tax

liability for 1994, 1995, and 1996.      She applied for relief under

section 6015(b), (c), and (f), and respondent, in determinations,

denied such relief.   Petitioner timely petitioned this Court for

review of respondent’s determinations.

                             Background

     Petitioner, at the time of filing her petitions, resided in

the State of Washington.    She filed joint returns with her former

husband3 for 1994, 1995, and 1996.      For each year the return was

prepared by a professional preparer and reflected a balance of

tax due.    Petitioner earned a small amount of wages each year

from her work at her husband’s construction company, but the

underpayments were, in substantial part, due to income reported

on Schedules C, Profit or Loss From Business, for the

construction company.    Petitioner was responsible for the

household bills and expenditures during the years in issue.



        2
       Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable years in
issue.
        3
       For convenience, petitioner’s former husband will be
referred to as her husband.
                               - 3 -

     When the 1994, 1995, and 1996 returns were filed, petitioner

was aware of the couple’s financial difficulties and that they

were having a hard time paying their living expenses.    Because

she worked at her husband’s construction company, she was also

aware of its financial situation and that it was also having

trouble paying its obligations.   Petitioner and her husband had

filed for bankruptcy and their unpaid tax liabilities for 1991,

1992, and 1993 were discharged, but the 1994, 1995, and 1996 tax

liabilities were not qualified for discharge.

     Petitioner separated from her husband during 1995 and

obtained a final divorce effective December 31, 1997.    Although

separated, petitioner and her husband continued to file joint

returns throughout the years at issue.   After the separation,

petitioner showed her husband’s girlfriend how to run the

administrative office of the construction business.   Those duties

included handling financial matters, typing contracts, buying

office supplies, and related duties.   In connection with the

divorce, petitioner’s husband had made an oral promise to pay the

Federal income taxes, but he did not keep his promise.    There was

no legal obligation under the divorce decree for payment of the

income tax liability.   Petitioner’s husband did not force her to

sign the returns or intimidate her in such a way that she signed

under duress.
                                - 4 -

     Petitioner filed for relief from joint and several

liability.   Respondent’s determination was that she was not

entitled to relief under section 6015(b) or (c) because the

assessments were based on underpayments of tax reported due.

Respondent also reviewed all of the factors to be considered for

relief under section 6015(f) and determined that she was not

entitled to equitable relief.

                            Discussion

     Section 6015(b) and (c) provides for relief from joint and

several liability in situations where there is an understatement

of tax or a deficiency in tax, respectively.   Because these cases

involve underpayments of tax reported on joint returns,

petitioner is not entitled to relief under either section 6015(b)

or (c).

     Section 6015(f) gives the Commissioner discretion to grant

relief from joint and several liability if, taking into account

all of the facts and circumstances, it is inequitable to hold an

individual liable for any unpaid tax and relief is not available

under section 6015(b) or (c).

     As directed by section 6015(f), the Commissioner has

prescribed guidelines in Rev. Proc. 2003-61, sec. 4.03(2), 2003-2

C.B. 296, 298, which lists the eight nonexclusive factors that

the Commissioner will consider in determining whether, taking

into account all the facts and circumstances, it is inequitable
                              - 5 -

to hold the requesting spouse liable for all or part of the

deficiency, and full or partial equitable relief under section

6015(f) should be granted.

     These nonexclusive factors include whether:   (1) The

requesting spouse is separated or divorced from the nonrequesting

spouse; (2) the requesting spouse will suffer economic hardship

without relief; (3) the requesting spouse did not know or have

reason to know that the nonrequesting spouse would not pay the

income tax liability; (4) the nonrequesting spouse had a legal

obligation to pay the outstanding liability; (5) the requesting

spouse received a significant benefit from the item giving rise

to the deficiency; (6) the requesting spouse has made a good

faith effort to comply with income tax laws in subsequent years;

(7) the requesting spouse was abused by the nonrequesting spouse;

and (8) the requesting spouse was in poor mental or physical

health when signing the return or requesting relief.   Rev. Proc.

2003-61, sec. 4.03(2), further provides that no single factor

will be determinative, but that all relevant factors will be

considered.

     The Appeals officer determined that the first and sixth

factors were in petitioner’s favor, the second and third were

against her, and the fourth and fifth were neutral.    With respect

to the seventh and eighth factors, the Appeals officer determined
                                - 6 -

that petitioner was not abused and no special consideration

arises from petitioner’s mental and physical health.

     We will now consider whether there was an abuse of

discretion in the denial of relief on the basis of the above-

listed relief factors.   After trial and the opportunity to

consider petitioner’s testimony, it appears that the Appeals

officer was correct in the analysis of the eighth factor.     There

is no question about whether petitioner was separated or divorced

and about her subsequent compliance, and so these factors weigh

in her favor.

     With respect to economic hardship, petitioner is currently

employed and she has not established economic hardship.     In that

regard, petitioner and her husband were relieved of 1991, 1992,

and 1993 income tax in an amount approaching $200,000 during

their bankruptcy proceeding.   This factor weighs against

petitioner.

     On the basis of petitioner’s testimony, it is clear that she

had reason to know that her husband would not pay the taxes

reported on the returns as she was aware of the internal

operations of his business and their personal inability to pay

their bills.    Accordingly, this factor weighs against petitioner.

     Although petitioner’s husband had made an oral promise to

pay the tax liabilities, there was no enforceable legal
                                 - 7 -

obligation to do so.   It was reasonable for the Appeals officer

to treat this factor as neutral.

     It is not clear that petitioner received a significant

benefit from the fact that there were tax underpayments, but it

is likely that she and her husband lived on the receipts of the

business, although the taxes were unpaid.       Again, it was

reasonable for the Appeals officer to treat this factor as

neutral.

     Finally, petitioner’s husband was prone to overindulge in

alcohol and may have used abusive language, but petitioner was

not influenced or intimidated by his actions and these conditions

did not play a factor in petitioner’s choice to sign joint

returns.   There has been no showing that petitioner’s mental or

physical health should play a role in the consideration

of whether she should have been granted relief under section

6015(f).

     In view of the foregoing, we hold that respondent’s refusal

to grant petitioner relief from joint and several liability for

the 1994, 1995, and 1996 tax years was justified.

     To reflect the foregoing,

                                              Decisions will be entered

                                         for respondent.
