                        T.C. Memo. 2010-77



                     UNITED STATES TAX COURT



                 PAUL NEAL JENSEN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 28191-07.               Filed April 15, 2010.



     Paul Neal Jensen, pro se.

     Angela Friedman, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     MORRISON, Judge:   In a notice of deficiency, respondent

Commissioner of Internal Revenue (IRS) determined that petitioner

Paul Neal Jensen (Jensen) was liable for an income-tax deficiency

of $1,037 for the tax year 2005.   The issue for decision is

whether Jensen must recognize discharge-of-indebtedness income

because Citibank cancelled a debt of Jensen’s in 2005.
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                          FINDINGS OF FACT

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

The stipulation of facts and the attached exhibits are

incorporated in this opinion by this reference.    Jensen resided

in Illinois at the time he filed his petition.

     Jensen and his wife divorced in 2004.   As both Jensen and

the IRS assume, a debt obligation to Citibank arose before the

divorce.   We do not know much about the debt.   For reasons

explained below, we find that the original obligor was Jensen,

not his ex-wife.

     In 2004 Jensen and his wife entered into a divorce agreement

under which his wife agreed to assume the Citibank debt:

     WIFE has incurred debts for the following entities:
     * * * Citibank * * * . * * * She shall be solely
     responsible for payment of all these debts and shall
     hold HUSBAND free, harmless and indemnified thereunder
     for these debts and for any costs incurred by HUSBAND
     because of these debts.

In 2005 Citibank forgave the debt, the dollar amount of which was

by then $4,136.    Citibank reported the forgiveness of the debt to

the IRS on a Form 1099-C, an information return for cancelled

debts, listing Jensen as the borrower.

                               OPINION

     Under section 61(a)(12) of the Internal Revenue Code, a

taxpayer who is liable for a debt must recognize income when that

debt is forgiven.   The IRS claims that before the divorce,

Citibank had made a loan to Jensen and that Jensen was liable for
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the Citibank debt.    Jensen does not appear to seriously dispute

that he was the original borrower.      Instead, he relies on the

2004 divorce agreement, an instrument that he claims placed the

obligation to Citibank on the shoulders of his ex-wife.      Even

putting aside whether Jensen has conceded this point, we find as

a matter of fact that Jensen was the original borrower.      First,

Jensen failed to introduce any documents concerning the original

loan into the record, even though Jensen has the burden of proof.

See Rule 142(a), Tax Court Rules of Practice and Procedure.

Second, Citibank reported to the IRS in 2005 that the borrower

was Jensen.    Third, Jensen testified that he has no

correspondence from Citibank to show that he was “no longer” the

borrower.    This suggests that Jensen was at one time the

borrower.    The 2004 divorce agreement states that the Citibank

debt was “incurred” by Jensen’s ex-wife.      Although this might

suggest that the ex-wife was the borrower, its meaning is

unclear.

     Jensen argues that the 2004 divorce agreement transferred

liability for the debt to his wife.      Under state law, the divorce

agreement gave Jensen a right of indemnification against his

wife.    See Diaz v. Diaz, 403 N.E.2d 1219, 1221 (Ill. App. Ct.

1980).    The agreement did not relieve Jensen of liability to

Citibank.    See Gibson v. Gibson, 219 Bankr. 195, 204-205 (Bankr.

6th Cir. 1998).    Thus, Jensen was still liable for the debt when
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Citibank forgave the debt in 2005.       He was required to recognize

the forgiven debt as income in 2005.

     To reflect the foregoing,


                                         Decision will be entered

                                 for respondent.
