                        T.C. Memo. 2007-193



                      UNITED STATES TAX COURT



    CARLOS R. MENENDEZ AND MARIA L. MENENDEZ, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 3975-06.               Filed July 18, 2007.



     Carlos R. and Maria L. Menendez, pro sese.

     Thomas Fenner, for respondent.



              MEMORANDUM FINDINGS OF FACT AND OPINION


     FOLEY, Judge:   The issue for decision is whether petitioner

Maria Menendez is entitled to innocent spouse relief pursuant to

section 6015(c).1

     1
         Unless otherwise indicated, all section references are to
                                                    (continued...)
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                        FINDINGS OF FACT

     In January 1963, petitioners were married in Cuba.    In

October 2003, petitioner Carlos Menendez closed his individual

retirement account (IRA) and received $35,407.    Mr. Menendez was

the only person authorized to request distributions from the IRA,

and the funds were deposited into a checking account over which

he had sole control.

     On February 16, 2004, in preparation for petitioners’

divorce, petitioner Maria Menendez signed an asset inventory list

(the inventory list) prepared by their financial adviser that

listed all the assets of Mr. and Ms. Menendez.    The inventory

list delineated eight retirement accounts, including Mr.

Menendez’s IRA showing a balance of “None”.   The inventory list

signed by Ms. Menendez was based on their financial adviser’s

records as of January 8, 2004.

     On March 19, 2004, petitioners’ marriage was dissolved.      On

October 12, 2004, petitioners jointly filed their Form 1040, U.S.

Individual Income Tax Return, relating to 2003.    In preparation

for their joint 2003 return, petitioners individually provided

tax information in their possession to their accountant.    The

proceeds from the IRA were not reported on the 2003 return.


     1
      (...continued)
the Internal Revenue Code in effect for the year in issue.
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     By notice of deficiency, dated December 19, 2005, respondent

determined that petitioners were liable for a deficiency of

$10,161 and a section 6662(a) accuracy-related penalty of $2,032.

     On February 23, 2006, Ms. Menendez, while residing in

Houston, Texas, filed a petition with the Court, but the petition

was not signed by Mr. Menendez.   On April 5, 2006, Ms. Menendez

filed an amended petition indicating that she had sent respondent

a Form 8857, Request for Innocent Spouse Relief.     On November 14,

2006, Mr. Menendez filed an amendment to Ms. Menendez’s amended

petition ratifying his intent to be made a party to the case but

disputing Ms. Menendez’s right to innocent spouse relief.     On

February 7, 2007, respondent determined that Ms. Menendez was

entitled to innocent spouse relief pursuant to section 6015(c).

                              OPINION

     Generally, married taxpayers may elect to file a Federal

income tax return jointly.   Sec. 6013(a).    Each spouse filing a

joint return is jointly and severally liable for the accuracy of

the return and the entire tax due.     Sec. 6013(d)(3).   Pursuant to

section 6015(c), a requesting spouse may seek relief from joint

liability and elect to allocate a deficiency to a nonrequesting

spouse if the following conditions are met: a joint return was

filed; at the time of the election, the requesting spouse is

separated or divorced from the nonrequesting spouse; the

requesting spouse seeks relief within 2 years of the first
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collection activity relating to the liability; and the requesting

spouse did not have actual knowledge, at the time of signing the

joint return, of the item giving rise to the deficiency.    Sec.

6015(c)(3)(A)-(C).

     Ms. Menendez contends that she meets all requirements of

section 6015(c) and respondent agrees.   Mr. Menendez, however,

contends that relief is not available because Ms. Menendez signed

the inventory list indicating the IRA funds had been withdrawn,

and, therefore, she had actual knowledge of the item giving rise

to the deficiency.

     Although she signed the inventory list that noted a

withdrawal of the IRA funds, the list was based on information as

of January 8, 2004.   Pursuant to the inventory list, Mr. Menendez

could have withdrawn his IRA funds at any time between October 1,

2003 and January 7, 2004.    Moreover, there is no other evidence

in the record to establish that Ms. Menendez had actual knowledge

of the withdrawal in 2003.   Cf. Cheshire v. Commissioner, 115

T.C. 183, 194 (2000) (taxpayer had actual knowledge when she knew

of the amount, the source, and the date of receipt of the

retirement distribution), affd. 282 F.3d 326 (5th Cir. 2002).

Thus, she is entitled to relief pursuant to section 6015(c).
                              - 5 -

     Contentions we have not addressed are irrelevant, moot, or

meritless.


                                      An appropriate decision will

                              be entered.
