                  T.C. Summary Opinion 2003-136



                     UNITED STATES TAX COURT



             ALVA COTTER SHELL IV, Petitioner, AND
                  JAMIE L. JONES, Intervenor v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 14736-02S.              Filed September 30, 2003.


     Alva Cotter Shell IV, pro se.

     Jamie L. Jones, pro se.

     Pamela L. Mable, for respondent.



     ARMEN, Special Trial Judge:     This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time that the petition was filed.1    The decision to



     1
        Unless otherwise indicated, all subsequent section
references are to the Internal Revenue Code in effect for 1996,
the taxable year in issue, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
                               - 2 -

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

should not be cited as authority.

     Pursuant to the provisions of section 6015, petitioner made

an administrative request for relief from a 1996 Federal income

tax deficiency.   Respondent denied petitioner’s request for

relief in a final notice of determination issued on July 11,

2002.   Petitioner timely filed a petition with this Court under

section 6015(e) for review of respondent’s determination.

Intervenor, petitioner’s former wife, filed a Notice of

Intervention under Rule 325(b) and opposes such relief.

     The sole issue for decision is whether respondent abused his

discretion in denying petitioner relief from joint and several

liability under section 6015(f).    We hold that he did not.

Background

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

Petitioner resided in Pitts, Georgia, at the time that his

petition was filed with the Court.

     Petitioner and intervenor Jamie L. Jones (intervenor) were

married to each other on May 19, 1990, and had one child, a son,

during their marriage.

     During 1996, petitioner worked as a full-time employee for

the City of Cordele and as a part-time employee for Gin Co., Inc.

Petitioner earned income of $13,855 and $3,206, respectively, at

each job in 1996.
                               - 3 -

     Intervenor worked part time at five different jobs and

earned total income of $5,666 during 1996.   Intervenor’s earnings

were deposited into the joint checking account she maintained

with petitioner.   Petitioner knew of intervenor’s employment and

earnings.

     During their marriage, both petitioner and intervenor

participated together in their financial matters.   For example,

personal and household expenses were paid by both petitioner and

intervenor from their joint checking account.

     Petitioner’s and intervenor’s joint 1996 Federal income tax

return was prepared and electronically filed by a paid income tax

return preparer.   Prior to meeting with their return preparer,

petitioner and intervenor discussed not reporting all of

intervenor’s income in order to qualify for a greater earned

income credit.   Therefore, petitioner and intervenor together met

with their return preparer.   The information petitioner and

intervenor provided their return preparer included all of

petitioner’s 1996 income and $594 of intervenor’s 1996 income.

Both petitioner and intervenor knew that $5,072 of intervenor’s

income was not reported on their 1996 return.   Petitioner and

intervenor received a refund of their 1996 taxes in the amount of

$2,267, more than half of which was attributable to the earned

income credit.
                               - 4 -

     Petitioner and intervenor separated in September 1997 and

were divorced on February 9, 1998.     Petitioner was awarded

custody of their son, and intervenor was allowed visitation

rights.   The divorce decree made no provision for any joint

liabilities, including any Federal income tax liabilities.

     On February 26, 1999, respondent sent both petitioner and

intervenor a notice of deficiency determining a deficiency in

their 1996 Federal income taxes in the amount of $1,564.     The

deficiency was based on intervenor’s unreported income and the

disallowance of most of the claimed earned income credit.

     Neither petitioner nor intervenor filed a petition with the

Court to contest their 1996 tax deficiency.

     On March 4, 1999, petitioner submitted to respondent a Form

8857, Request for Innocent Spouse Relief, requesting section 6015

relief.   On April 7, 2000, respondent sent a letter to petitioner

requesting that he complete a questionnaire to assist in

respondent’s determination.   Petitioner did not respond to the

questionnaire or otherwise provide respondent with any of his

financial information.

     On July 11, 2002, respondent issued a notice of final

determination advising petitioner that he was not entitled to

relief under section 6015.

     At the time of trial in May 2003, petitioner was employed as

an aircraft worker at Robbins Air Force Base earning an annual
                                 - 5 -

base salary of approximately $40,456.    Petitioner also received

$749 in monthly disability benefits from the Veterans Benefits

Administration.

Discussion

     As a general rule, spouses filing a joint Federal income tax

return are jointly and severally liable for all taxes shown on

the return or found to be owing.    Sec. 6013(d)(3); Cheshire v.

Commissioner, 115 T.C. 183, 188 (2000), affd. 282 F.3d 326 (5th

Cir. 2002).   However, relief from joint and several liability is

available to certain taxpayers under section 6015.    There are

three types of relief available under section 6015:    (1) Section

6015(b)(1) provides full or apportioned relief from joint and

several liability; (2) section 6015(c) provides proportionate tax

relief to divorced or separated taxpayers; and (3) section

6015(f) provides equitable relief from joint and several

liability in certain circumstances if neither section 6015(b) nor

(c) is available.

     Petitioner concedes that he is not eligible for relief under

either section 6015(b) or (c).    Petitioner has instead requested

equitable relief under section 6015(f).

     Section 6015(f) provides:

          SEC. 6015(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 individual liable for any unpaid tax or any
                               - 6 -

           deficiency (or any portion of either); and

                  (2) relief is not available to such
           individual under subsection (b) or (c),

     the Secretary may relieve such individual of such
     liability.

     We review respondent’s denial of equitable relief to

petitioner under an abuse of discretion standard.   Cheshire v.
Commissioner, 115 T.C. at 198; Butler v. Commissioner, 114 T.C.

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

respondent’s denial of equitable relief under section 6015(f) was

an abuse of discretion.   Rule 142(a); Alt v. Commissioner, 119

T.C. 306, 311 (2002); Jonson v. Commissioner, 118 T.C. 106, 113

(2002).   Petitioner must demonstrate that respondent exercised

his discretion arbitrarily, capriciously, or without sound basis

in fact or law.    Jonson v. Commissioner, supra at 125; Woodral v.

Commissioner, 112 T.C. 19, 23 (1999).

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

prescribed procedures to be used in determining whether the

requesting spouse qualifies for relief from joint and several

liability under section 6015(f).   These procedures are set forth

in Rev. Proc. 2000-15, 2000-1 C.B. 447.2   Where, as is the case

here, the requesting spouse satisfies the threshold conditions




     2
        As relevant herein, Rev. Proc. 2000-15, sec. 3, 2000-1
C.B. 447, 448, is applicable for any liability for tax arising on
or before July 22, 1998, that was unpaid on that date.
                                - 7 -

set forth in section 4.01 of the revenue procedure,3 section 4.03

of the revenue procedure lists several nonexclusive factors to be

considered by the Commissioner in determining eligibility for

equitable relief.    “No single factor will be determinative of

whether equitable relief will or will not be granted in any

particular case.    Rather, all factors will be considered and

weighed appropriately.”    Rev. Proc. 2000-15, sec. 4.03, 2001-1

C.B. at 448.

     The nonexclusive list of factors that the Commissioner will

consider as weighing in favor of granting relief includes:    (1)

The requesting spouse is separated or divorced from the

nonrequesting spouse; (2) the requesting spouse would suffer

economic hardship if relief is not granted; (3) the requesting

spouse was abused by the nonrequesting spouse; (4) the requesting

spouse did not know or have reason to know of the items giving

rise to the deficiency; (5) the nonrequesting spouse has a legal

obligation pursuant to a divorce decree or agreement to pay the

unpaid liability; and (6) the unpaid liability is attributable

solely to the nonrequesting spouse.     See Rev. Proc. 2000-15, sec.

4.03(1), 2001-1 C.B. at 448.    The nonexclusive list of factors

that the Commissioner will consider as weighing against granting

of relief includes:    (1) The item giving rise to the deficiency

is attributable to the requesting spouse; (2) the requesting

spouse knew or had reason to know of the item giving rise to the


     3
        Respondent concedes that petitioner has satisfied the
threshold conditions of sec. 4.01.
                               - 8 -

deficiency; (3) the requesting spouse significantly benefited

(beyond normal support) from the item giving rise to the

deficiency; (4) the requesting spouse will not suffer economic

hardship if relief is denied; (5) 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 to which the request for

relief relates; and (6) the requesting spouse has a legal

obligation pursuant to a divorce decree or agreement to pay the

unpaid liability.   See Rev. Proc. 2000-15, sec. 4.03(2), 2001-1

C.B. at 449.

     Petitioner primarily relies on the fact that the unreported

income items giving rise to the deficiency are attributable

solely to his former spouse and that he would suffer economic

hardship if he did not receive relief.   Respondent argues that

petitioner is not eligible for relief because the negative

factors in favor of not granting relief under section 6015(f)

outweigh the positive factors in favor of granting relief.

     Although it is clear that the unreported income was solely

attributable to the earnings of intervenor, the remaining factors

weigh heavily against granting petitioner equitable relief.

     Petitioner admits that he knew of intervenor’s employment

during 1996 and that she derived income from that employment.

Intervenor’s unreported earnings were deposited in a joint

checking account for their mutual benefit.   Petitioner and

intervenor discussed not reporting a portion of her income on
                               - 9 -

their 1996 return prior to their meeting with their return

preparer.   Petitioner knew that $5,072 of intervenor’s earnings

were not reported on their 1996 return.   Petitioner, along with

intervenor, benefited from the unreported income by receiving a

larger tax refund in 1996.   There was also no legal obligation

pursuant to the divorce decree or other agreement for intervenor

to pay the outstanding joint tax liability.

     Finally, petitioner has also failed to establish that he

will suffer economic hardship if equitable relief is not granted.

In determining whether a requesting spouse will suffer economic

hardship, the revenue procedure refers to rules similar to those

provided in section 301.6343-1(b)(4), Proced. & Admin. Regs.

That regulation generally provides that an individual suffers an

economic hardship if the individual is unable to pay his or her

reasonable basic living expenses.   See id.

     Petitioner relies solely on the fact that he is a single

father who receives no child support.   However, petitioner is

currently employed and earns an annual base salary of $40,456.

Petitioner also receives monthly disability payments of $749.

Petitioner has provided no information as to his monthly

expenses.   Petitioner likewise did not provide respondent with

any evidence of financial hardship during respondent’s decision-

making process.   Thus, petitioner has failed to show that he will

suffer any economic hardship if equitable relief is denied.

     Based on the facts and circumstances presented in this case,
                             - 10 -

we find that the factors against equitable relief outweigh the

factors in favor of equitable relief.   Accordingly, we hold that

it was not an abuse of discretion by respondent to deny

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

     Reviewed and adopted as the report of the Small Tax Case

Division.

     To reflect the foregoing,

                                         Decision will be entered

                                   for respondent.
