                  T.C. Summary Opinion 2010-13


                     UNITED STATES TAX COURT



                JON MICHAEL ROGERS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 19156-06S, 13665-07S.   Filed February 16, 2010.



     Jon Michael Rogers, pro se.

     Terry Serena, for respondent.



     THORNTON, Judge:   These consolidated cases were heard

pursuant to the provisions of section 7463 of the Internal

Revenue Code in effect when the petitions were filed.1    Pursuant

to section 7463(b), the decisions to be entered are not




     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code.
                                 - 2 -

reviewable by any other court, and this opinion shall not be

treated as precedent for any other case.

     The issue in these cases is whether respondent is entitled

to proceed with proposed levies to collect petitioner’s unpaid

2004 and 2005 Federal income tax liabilities.

                              Background

     When the petitions were filed, petitioner resided in

Kentucky.

     In 2004 petitioner married Lisa C. Rogers (Mrs. Rogers).

They soon began to have financial troubles, partly because of

large credit card debts that Mrs. Rogers brought to the marriage.

To help get their finances in order, petitioner encouraged Mrs.

Rogers to file for bankruptcy, which she did on May 27, 2005.      On

September 14, 2005, she received a discharge in bankruptcy, but

it did not cover her 2004 tax liability.

Petitioner’s 2004 Tax Liability

         On or before April 15, 2005, petitioner and Mrs. Rogers

filed a joint Form 1040, U.S. Individual Income Tax Return, for

2004.     Petitioner prepared the return.   The return showed tax due

of $20,059 before application of an $11,141 withholding credit

and a $255 payment, resulting in an $8,663 underpayment.2

     On February 11, 2006, respondent issued to petitioner a

Final Notice of Intent to Levy and Notice of Your Right to a


     2
        All dollar amounts are rounded to the nearest dollar.
                               - 3 -

Hearing with regard to the unpaid 2004 tax liability.    On March

1, 2006, petitioner submitted Form 12153, Request for a

Collection Due Process Hearing.   On this form he indicated that

he and Mrs. Rogers were separated pending divorce proceedings.

He stated:   “It is my understanding we began making $300.00 month

installment payments on this debt in January ‘06.    I have been

sending her [Mrs. Rogers] money to do so.    We would propose to

continue to pay this debt in that manner.”    Petitioner checked a

box on Form 12153 to indicate that he was requesting relief from

joint and several liability on their joint return (innocent

spouse relief) but did not, as the form directs, attach any Form

8857, Request for Innocent Spouse Relief.

     On August 17, 2006, following a telephone hearing,

respondent issued a notice of determination, sustaining the

proposed levy.   The notice of determination states:

     The Settlement Officer advised you there was no record
     of your being included on an installment agreement.
     You declined to establish an installment agreement
     during the hearing. You indicated you wanted to
     determine what happened to the payments you sent to
     your spouse to set up the installment agreement. You
     did not file Form 8857 for innocent spouse
     consideration and did not state you were not liable for
     the taxes. Since you did not propose an acceptable
     collection alternative, Appeals is unable to grant you
     relief from the Final Notice * * *.

     On September 20, 2006, petitioner filed his petition at

docket No. 19156-06S, seeking judicial review of this

determination.   On May 8, 2007, before the scheduled trial date,
                                 - 4 -

petitioner submitted to respondent Form 8857 requesting innocent

spouse relief for 2004.    Upon respondent’s motion, the trial date

was continued to allow respondent’s Innocent Spouse Unit to

consider petitioner’s request.    On January 31, 2008, respondent’s

Appeals Office issued petitioner a notice of determination

denying petitioner’s request for innocent spouse relief for 2004.

Petitioner’s 2005 Tax Liability

     In the meantime, on April 15, 2006, petitioner filed his

2005 income tax return.    He elected married filing separately

status.    The 2005 return showed $14,445 of tax due before

application of an $8,571 withholding credit, resulting in a

$5,874 underpayment.    On April 21, 2006, petitioner submitted to

respondent a Form 9465, Installment Agreement Request, proposing

to pay $100 per month toward his unpaid 2005 liability.3      He did

not submit any required financial information with the request.

     On November 13, 2006, respondent issued to petitioner a

Final Notice of Intent to Levy and Notice of Your Right to a

Hearing with regard to the unpaid 2005 tax liability.    On

December 9, 2006, petitioner submitted Form 12153 requesting a

hearing.    As before, he checked a box on the form indicating that

he was requesting innocent spouse relief.    He stated that he was

divorced and that his ex-wife “forced me to file married,

     3
      Insofar as the record shows, respondent never agreed to
this requested installment agreement. The record is inconclusive
as to whether respondent ever processed it.
                                - 5 -

separate in 2005 which resulted in an unexpected liability for

2005.”   Claiming that one-half of his 2005 tax liability belonged

to Mrs. Rogers, he stated that he wanted “to combine the matters

in question for 2005 with those I have previously asserted for

2004”.   There was no Form 8857 attached to the Form 12153, but

petitioner submitted one a few days later, on or about December

12, 2006.

     On May 7, 2007, petitioner had a telephone hearing with a

settlement officer.    According to the settlement officer’s notes:

Petitioner acknowledged that his request for innocent spouse

relief for 2005 was “incorrect”; the settlement officer offered

petitioner an installment agreement for petitioner to pay $395

per month or, alternatively, a 90-day extension of time to pay,

during which petitioner could try to set up a different

installment agreement; and petitioner chose the latter option.

Consistent with this understanding, on May 11, 2007, respondent

issued a notice of determination, sustaining the proposed levy

but suspending collection action until August 7, 2007, to provide

petitioner the agreed-upon 90-day extension of time to pay.

Petitioner timely petitioned the Tax Court.

                             Discussion

     Section 6330 requires the Secretary to furnish a person

notice and opportunity for a hearing before making a levy on the

person’s property.    At the hearing, the person may raise any
                                 - 6 -

relevant issue relating to the unpaid tax or proposed levy,

including spousal defenses, challenges to the appropriateness of

the collection action, and offers of collection alternatives.

Sec. 6330(c)(2).     Once the Commissioner’s Appeals Office issues a

notice of determination, the person may seek judicial review in

this Court.   Sec. 6330(d)(1).

     In these proceedings, petitioner seeks two types of relief:

(1) Innocent spouse relief pursuant to section 6015; and (2) a

collection alternative.

A.   Innocent Spouse Relief

     In general, married taxpayers may elect to file a joint

Federal income tax return.    Sec. 6013(a).   After making the

election for a year, each spouse is jointly and severally liable

for the entire Federal income tax liability assessed for that

year, whether as reported on the joint return or subsequently

determined to be due.    Sec. 6013(d)(3); see sec. 1.6013-4(b),

Income Tax Regs.   Subject to various conditions, an individual

who has made a joint return with his or her spouse for a year may

seek relief from the joint and several liability arising from

that joint return.    There are three types of relief available

under section 6015.    In general, section 6015(b) provides full or

apportioned relief from joint and several liability; section

6015(c) provides proportionate tax relief to divorced or

separated taxpayers; and in certain circumstances section 6015(f)
                                - 7 -

provides equitable relief if relief is not available under

section 6015(b) or (c).    If the Commissioner denies a taxpayer’s

request for relief under section 6015, the taxpayer may petition

this Court to review the determination.    Sec. 6015(e)(1)(A).

     When petitioner filed his petition in docket No. 19156-06S,

respondent had made no determination regarding innocent spouse

relief for 2004 because petitioner had filed no Form 8857 for

2004.    Subsequently, petitioner filed Form 8857 for 2004, and

respondent issued a determination denying his request for

innocent spouse relief.    Treating that determination as a

supplement to respondent’s section 6330 determination, we

conclude that we may review in this collection proceeding

respondent’s determination to deny innocent spouse relief.    See

Pahamotang v. Commissioner, T.C. Memo. 2003-177.4

     Petitioner’s contention, as best we understand it, is that

he is entitled to innocent spouse relief for 2004 because he has

not received credit for monthly payments that he claims to have

made to Mrs. Rogers with the understanding that his payments

     4
      With respect to his 2005 liability, petitioner filed a Form
8857 a few days after filing his request for a sec. 6330
collection hearing. Respondent issued no separate determination
with respect to petitioner’s request for innocent spouse relief
for 2005 and did not expressly address the issue in the sec. 6330
determination for 2005, apparently on the assumption that
petitioner agreed he did not qualify for innocent spouse relief
for 2005. Because petitioner was entitled to raise spousal
defenses under sec. 6330(c)(2), we shall review petitioner’s
claim for innocent spouse relief for 2005 as part of our review
of respondent’s determination under sec. 6330 for 2005.
                                - 8 -

would be applied to their joint 2004 Federal income tax

liability.   He also claims that he is entitled to innocent spouse

relief for 2005 because his 2005 deficiency would have been

smaller if Mrs. Rogers had agreed to file a joint return with him

for 2005.

     We may quickly dispose of petitioner’s claim for innocent

spouse relief for 2005.   By its terms, section 6015 applies only

if an individual has made a joint return.     Sec. 6015(a)(1).

Because petitioner filed no joint return for 2005, section 6015

is inapplicable--indeed, it is not meaningful to speak of relief

from joint and several liability for a year in which petitioner

has no joint and several liability.

     For 2004 the analysis is more complicated.     Petitioner does

not qualify for relief under section 6015(b) or (c) because the

joint tax return reported the full amount of tax due, and

therefore the liability is due to underpayment of tax, not

understatement of tax.    Accordingly, petitioner’s sole avenue of

relief is through section 6015(f).      See Washington v.

Commissioner, 120 T.C. 137, 146-147 (2003).

     A taxpayer who does not qualify for relief under section

6015(b) or (c) can be relieved from joint and several liability

pursuant to section 6015(f) if, taking into account all the facts

and circumstances, it would be inequitable to hold the taxpayer

liable for any unpaid tax or deficiency.     Sec. 6015(f)(1).    In
                               - 9 -

determining the appropriate relief available under section

6015(f), we apply a de novo scope and standard of review.    See

Porter v. Commissioner, 132 T.C.       (2009).

     Rev. Proc. 2003-61, 2003-2 C.B. 296, prescribes guidelines

for determining whether an individual qualifies for relief under

section 6015.   Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297,

lists threshold conditions that must be satisfied before the

Commissioner will consider a request for equitable relief under

section 6015(f).   Respondent agrees that petitioner has met these

threshold conditions.

     Once the threshold conditions have been met, relief will

ordinarily be granted with respect to underpayments of tax if the

requesting spouse satisfies the so-called tier 1 factors

described in Rev. Proc. 2003-61, sec. 4.02, 2003-2 C.B. at 298.

Respondent determined that petitioner failed to satisfy all these

tier 1 factors, finding that petitioner had not established that

he had no knowledge or reason to know that the tax would not be

paid or that he would suffer economic hardship if relief were not

granted.

     If the requesting spouse does not qualify for relief under

Rev. Proc. 2003-61, sec. 4.02, 2003-2 C.B. at 298, a

determination may nevertheless be made under Rev. Proc. 2003-61,

sec. 4.03, 2003-2 C.B. at 298, to grant relief.   Rev. Proc. 2003-

61, sec. 4.03, contains a nonexhaustive list of so-called tier 2
                             - 10 -

factors that the IRS will consider in deciding whether to grant

equitable relief under section 6015(f).   Respondent found that

numerous tier 2 factors weighed against petitioner, among them:

Petitioner had reason to know that the tax would not be paid;

petitioner was helping Mrs. Rogers file for bankruptcy when they

filed their 2004 joint return; petitioner prepared the 2004 joint

return and knew that he and Mrs. Rogers had a liability;

petitioner has not complied with the tax laws going forward; and

petitioner earned more than twice Mrs. Rogers’ income and would

not suffer economic hardship if relief were denied.   The only

factor that respondent found favored petitioner was that he was

divorced.

     Upon careful review of the record, and considering the

evidence petitioner presented, we agree with respondent that

petitioner is not entitled to innocent spouse relief under

section 6015(f).5




     5
      At trial petitioner produced a temporary order from the
Family Court of Putnam County, W. Va., dated Nov. 27, 2007,
indicating that petitioner paid Mrs. Rogers $2,400 to apply to
their joint 2004 Federal income tax liability but that this
amount was instead applied to her 2003 separate liability. The
temporary order also states that the Family Court “will set a
hearing after this to make * * * [petitioner] whole.” Hence,
while this evidence tends to corroborate petitioner’s claims
regarding his payments to Mrs. Rogers, it also suggests that he
may have recourse to relief outside the tax system and will not
suffer economic hardship if innocent spouse relief is denied.
                               - 11 -

B.   Collection Alternatives

     Although petitioner was entitled to offer collection

alternatives at his section 6330 hearings, there is no indication

that he ever did so.6   To the contrary, the notice of

determination for 2004 states that petitioner “declined to

establish an installment agreement during the hearing.”     The

settlement officer did not abuse her discretion by not

considering collection alternatives that petitioner had not

raised.

     Nevertheless, during the collection hearing with respect to

petitioner’s 2005 liability, petitioner and the settlement

officer agreed that collection action would be suspended for 90

days after issuance of the notice of determination and that

during this time petitioner could voluntarily pay his tax or

propose an installment agreement covering all his outstanding

Federal income tax liabilities.    According to the settlement

officer’s case notes:    “the levy would begin after the 90 days

expire”.    The notice of determination for 2005 reflects this

understanding.

         For the reasons previously described, we sustain

respondent’s determinations.    To give effect to the terms of the

notice of determination for 2005 and the parties’ apparent


     6
      There is also no indication in the record that petitioner
ever had any installment agreement in his own name.
                             - 12 -

understanding underlying it, we shall direct that respondent

suspend the proposed levies for 90 days to give petitioner an

additional opportunity, if he wishes, to voluntarily pay his

outstanding liabilities or propose an installment agreement in

the light of our holding today.

     To reflect the foregoing,


                                        Appropriate orders will

                                   be issued.
