                    T.C. Summary Opinion 2011-25



                        UNITED STATES TAX COURT



                DESMOND D. CONYERS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 9760-08S.                Filed March 8, 2011.



     Desmond D. Conyers, pro se.

     Daniel J. Parent, for respondent.



     RUWE, Judge:     This case was heard pursuant to the provisions

of section 74631 of the Internal Revenue Code in effect when the

petition was filed.    Pursuant to section 7463(b), the decision to

be entered is not reviewable by any other court, and this opinion

shall not be treated as precedent for any other case.


     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended, and all Rule references are
to the Tax Court Rules of Practice and Procedure.
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     Respondent determined an $18,497 deficiency in petitioner’s

2004 Federal income tax and a $3,699.40 accuracy-related penalty

under section 6662(a).   By agreement of the parties, the only

issue we must decide is whether petitioner is entitled to relief

from joint and several liability under section 6015.

                             Background

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

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.

     At the time the petition was filed, petitioner resided in

California.   Petitioner and his wife, Lisa Conyers, filed a

timely joint Federal income tax return for 2004.    On January 22,

2008, respondent mailed to petitioner a notice of deficiency.

     During 2004 petitioner was self-employed as a roofing

contractor.   Petitioner reported gross receipts and expenses from

his business on a Schedule C, Profit or Loss From Business, which

was attached to his 2004 return.

     During 2004 petitioner traveled to jobsites in order to give

potential customers estimates for their projects.   Typically, the

estimates would consist of written proposals.   In addition to

providing estimates, petitioner performed or supervised the

construction roofing services his business provided.   Petitioner

was aware of all construction roofing services his business

provided during 2004.    Petitioner was also aware of all charges
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made to customers in exchange for these services.    All payments

petitioner’s business received for services rendered were

deposited into one of three business bank accounts petitioner

maintained.

     The only income petitioner and Lisa Conyers reported on

their 2004 return was the $268,182 of gross receipts or sales

listed on the Schedule C for petitioner’s construction roofing

business.   Respondent’s revenue agent conducted a bank deposits

analysis of petitioner’s bank accounts for 2004.    As a result,

respondent concluded after taking into account transfers and

nontaxable deposits that petitioner made $337,026 in total

taxable deposits for 2004.   Respondent has determined that

petitioner underreported his Schedule C gross receipts by $68,844

for 2004.   Petitioner does not dispute this determination.   The

unreported income giving rise to the deficiency is attributable

solely to petitioner’s income-producing activity.

     Petitioner’s wife passed away in January 2007, shortly

before the beginning of the examination of the 2004 return.     On

June 1, 2009, petitioner filed an amendment to petition claiming

“any and all defenses to which he might be entitled under IRC

Section 6015” as an innocent spouse.   On September 17, 2009,

respondent sent petitioner a Form 8857, Request for Innocent

Spouse Relief.   Petitioner did not provide respondent with a

completed Form 8857 until the week of trial.
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                             Discussion

      The parties have agreed that the only issue for decision is

whether petitioner is entitled to relief from the deficiency

under section 6015.    Section 6013(d)(3) generally provides that

married couples who file a joint Federal income tax return are

jointly and severally liable for any resulting income tax

liability.   A spouse may seek relief from joint and several

liability under section 6015(b), (c), or (f) in appropriate

circumstances.    Olson v. Commissioner, T.C. Memo. 2009-294.

Except as otherwise provided in section 6015, the taxpayer

seeking relief bears the burden of proof.    Rule 142(a).

I.   Section 6015(b)

      Section 6015(b)(1) authorizes the Commissioner to grant

relief from joint and several liability for tax if the taxpayer

requesting relief satisfies each of the following five

requirements:    (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 one 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 attributable to such understatement; and (E) the other
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individual elects 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.

     The spouse requesting relief bears the burden of proving

that he satisfies each of these five requirements.   See Rule

142(a); Haltom v. Commissioner, T.C. Memo. 2005-209.    “The

requirements of section 6015(b)(1) are stated in the conjunctive.

Accordingly, a failure to meet any one of them prevents a

requesting spouse from qualifying for relief offered therein.”

Alt v. Commissioner, 119 T.C. 306, 313 (2002), affd. 101 Fed.

Appx. 34 (6th Cir. 2004); Haltom v. Commissioner, supra.

     A requesting spouse has knowledge or reason to know of an

understatement if he or she actually knew of the understatement

or if a reasonable person in similar circumstances, at the time

he or she signed the return, could be expected to know that the

return contained an understatement.    Sec. 1.6015-2(c), Income Tax

Regs.   A requesting spouse has constructive knowledge or a reason

to know of an understatement if “a reasonably prudent taxpayer

under the circumstances of the [requesting] spouse at the time of

signing the return could be expected to know that the tax

liability stated was erroneous or that further investigation was

warranted.”   Kistner v. Commissioner, 18 F.3d 1521, 1525 (11th

Cir. 1994), revg. T.C. Memo. 1991-463; see also sec. 1.6015-2(c),
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Income Tax Regs.    All of the facts and circumstances are

considered in determining whether a requesting spouse had reason

to know of an understatement.    Sec. 1.6015-2(c), Income Tax Regs.

     Petitioner fails to qualify for relief under section 6015(b)

because he had actual knowledge of items giving rise to the

understatement in tax and the resulting deficiency.   See sec.

6015(b)(1)(C).   The only items of income petitioner reported in

2004 were amounts he received through the operation of his

roofing business.   Petitioner was responsible for the operation

of the business and for collections it made upon providing

services to its customers.   Petitioner provided estimates to

customers for proposed projects and either supervised or

performed all of the construction roofing services his business

provided during 2004.   Petitioner was aware of all charges made

to customers in exchange for his services during 2004.    All

payments petitioner’s business collected were deposited into one

of three bank accounts petitioner maintained for the business.

Because petitioner was responsible for deciding how much to

charge for services performed, for actually performing the work,

and for collecting and depositing fees, petitioner had actual

knowledge of items giving rise to the understatement.    As a

result, petitioner is not eligible for relief under section

6015(b).
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II.    Section 6015(c)

       Under section 6015(c) if the requesting spouse is no longer

married to or is legally separated from the spouse with whom he

filed the joint return, he may elect to limit his liability for a

deficiency as provided in section 6015(d).     Sec. 6015(c)(1),

(3)(A)(i)(I); DeMattos v. Commissioner, T.C. Memo. 2010-110.

However, the election is not available where the Secretary has

demonstrated that the individual making the election had actual

knowledge, at the time the individual signed the return, of any

item giving rise to the deficiency.     Sec. 6015(c)(3)(C).   Because

we have already held that petitioner had actual knowledge of the

items giving rise to the deficiency, petitioner is not eligible

for relief under section 6015(c).

III.    Section 6015(f)

       Section 6015(f) allows for an alternative means of relief

for a requesting spouse who does not otherwise qualify for relief

under section 6015(b) or (c).    Sec. 6015(f)(2).   Section 6015(f)

permits relief from joint and several liability where it would be

inequitable to hold the individual liable for any unpaid tax or

any deficiency.    Sec. 6015(f)(1).   Under section 6015(f), the

Secretary may grant equitable relief to a requesting spouse on

the basis of the facts and circumstances of the requesting

spouse’s case.    Sec. 6015(f)(1).    Petitioner bears the burden of

proving that he is entitled to equitable relief under section
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6015(f).   See Rule 142(a); Porter v. Commissioner, 132 T.C. 203

(2009).

     At trial petitioner testified that sometime after

respondent’s examination he became aware of large sums of cash

withdrawn from two of his bank accounts and that he now believes

that his wife had been taking money and fixing the books to

support a drug and alcohol addiction.      He also testified that

payment of the tax in issue would cause him such hardship that

his only option would be to file for bankruptcy.      Other than this

brief and conclusory testimony, petitioner produced no evidence

to support these allegations.   In the light of the facts

indicating that petitioner knew about the operations of his

business and its substantial income, we cannot find that

petitioner has proven that he is eligible for relief under

section 6015(f).

      To reflect the foregoing,


                                             Decision will be entered

                                        under Rule 155.
