                       T.C. Memo. 2004-184



                     UNITED STATES TAX COURT



                MARGARET A. DURHAM, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10581-02.               Filed August 16, 2004.


     Margaret A. Durham, pro se.

     Edwina L. Jones, for respondent.



                       MEMORANDUM OPINION


     PANUTHOS, Chief Special Trial Judge:    Respondent determined

that petitioner is not entitled to relief from joint and several

liability under section 6015 for the 1993 taxable year.1   The

issues for decision are:    (1) Whether petitioner is entitled to


     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.
                               - 2 -

relief under section 6015(b) or (c); and (2) whether respondent

abused his discretion in denying petitioner’s request for

equitable relief under section 6015(f).

                             Background

     Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.

Petitioner resided in Hope Mills, North Carolina, at the time she

filed the petition herein.

     Petitioner was married to James L. Hyatt (Mr. Hyatt).

During the 1993 taxable year, petitioner was a housewife, and Mr.

Hyatt was a self-employed carpenter and partner of J.D. Trim

Company.

     Petitioner and Mr. Hyatt filed a timely Federal income tax

return for the 1993 taxable year (1993 joint return).   The 1993

joint return reported “total tax” of $4,175 and tax due of the

same amount.   Petitioner and Mr. Hyatt did not remit any payment

with their return.   On May 23, 1994, respondent accepted the 1993

joint tax return as filed and assessed the tax reported therein,

along with additions to tax under sections 6651(a)(2) and 6654 of

$39.70 and $166.34, respectively, and interest of $29.03.

     Petitioner had overpayments of tax for the taxable years

1995 through 2001.   Respondent applied these overpayments to

offset the outstanding tax liability associated with the 1993

joint return in the following manner:
                                      - 3 -

      Taxable Year        Amount of Overpayment          Week Applied1

             1995                  $193                    5/12/1996
             1996                    585                   5/25/1997
             1997                    246                   5/10/1998
             1998                    226                   2/21/1999
             1999                    237                   4/16/2000
             2000                    349                   5/13/2001
                                   2
             2000                    300                   8/12/2001
             2001                    253                   4/21/2002
      1
        Respondent testified that Monday is the typical day of the week for
applying the overpayment.

      2
          Amount of petitioner’s rate reduction credit for 2000.
As of December 8, 2003, the amount outstanding associated with

the 1993 joint return was $1,740.17 of accrued interest.2

      In 1995 or sometime thereafter, petitioner and Mr. Hyatt

divorced.

      On December 26, 2001, petitioner filed a Form 8857, Request

for Innocent Spouse Relief.          Respondent issued petitioner a final

notice dated March 27, 2002, denying petitioner relief from joint

and several liability under section 6015(b), (c), and (f).

Respondent noted:

      We received your request more than two years after the
      date we began collection activity. IRC Sections
      6015(b)(1)(E), 6015(c)(3)(B) and 6015(f) require
      Innocent Spouse claims to be filed no later than two
      years after the start of collection activity after July
      22, 1998. The date of collection activity on your
      account, after the enactment if [sic] IRC Section 6015
      was 2/22/99.


      2
        Respondent also applied both Mr. Hyatt’s overpayment of
tax for the 2001 taxable year and Mr. Hyatt’s payments under an
installment agreement to offset the outstanding liability
associated with the 1993 joint return.
                               - 4 -


     After respondent issued the final notice dated March 27,

2002, denying equitable relief under section 6015(f) based upon

the 2-year time limit, respondent nevertheless requested that his

Appeals Office review petitioner’s request under the

nonexhaustive list of factors of Rev. Proc. 2000-15, sec. 4.03,

2000-1 C.B. 447, 448-449.   On November 19, 2003, respondent’s

Appeals Office recommended not granting equitable relief under

section 6015(f) after concluding the following:

          The fact that she indicates that she is divorced
     and the income was due to the non-requesting spouse
     does not out weigh [sic] the factors that she knew
     there was a balance due when she signed the return, was
     not forced to sign the joint return, had no filing
     requirement since she was a housewife and did not have
     to sign her name, knew what she was doing when she
     signed the joint return (she wanted to get a deduction
     for herself), the lack of economic hardship, no abuse,
     in good health, has assets that could be sold to pay
     the liability and is 45 years old with no dependents
     * * *.

     Petitioner contends that she is entitled to relief from

joint and several liability under section 6015(b) and (c) and

that respondent abused his discretion in denying her equitable

relief under section 6015(f) for the 1993 taxable year.

Accordingly, petitioner contends that she is entitled to a refund

of the overpayments of her income tax liabilities that respondent

used to offset the liability associated with the 1993 joint

return.
                                 - 5 -

                               Discussion

      Generally, married taxpayers may elect to file a joint

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

election, each spouse is jointly and severally liable for the

entire tax due.   Sec. 6013(d)(3).    A spouse may seek relief from

joint and several liability under section 6015.      A spouse may

qualify for relief from liability under section 6015(b), or if

eligible, may allocate liability under section 6015(c).      In

addition, if relief is not available under section 6015(b) or

(c), an individual may seek equitable relief under section

6015(f).    Fernandez v. Commissioner, 114 T.C. 324, 329-331

(2000); Butler v. Commissioner, 114 T.C. 276, 287-292 (2000).

Our review is not limited to respondent’s administrative record.

Ewing v. Commissioner, 122 T.C. 32, 44 (2004).      Except as

otherwise provided in section 6015, petitioner bears the burden

of proof.   Rule 142(a); Alt v. Commissioner, 119 T.C. 306, 311

(2002).

1.   Section 6015(b) and (c)

      Section 6015(b) provides relief from joint and several

liability for tax (including interest, penalties, and other

amounts) to the extent that such liability is attributable to an

understatement of tax.   The term “understatement” means the

excess of (1) the amount of the tax required to be shown on the

return for the taxable year, over (2) the amount of tax imposed
                                 - 6 -

which is shown on the return, reduced by any rebate (within the

meaning of section 6211(b)(2)).    Secs. 6015(b)(3), 6662(d)(2)(A).

     Section 6015(c) allows a taxpayer who is eligible and so

elects to limit his or her liability to the portion of a

deficiency that is properly allocable to the taxpayer as provided

in section 6015(d).    Sec. 6015(c)(1).

     In the present case, there is neither an understatement of

tax, as required under section 6015(b), nor a deficiency, as

required under section 6015(c).    Rather, there is an underpayment

of tax.   The 1993 return filed by petitioner and Mr. Hyatt

reported tax due of $4,175, but they did not remit any payment

with their return.     Accordingly, section 6015(b) and (c) cannot

apply.    We sustain respondent’s determination that petitioner is

not entitled to relief from joint and several liability under

either section 6015(b) or (c).

2.   Section 6015(f)

     Since petitioner is not entitled to relief under section

6015(b) or (c), we consider whether petitioner qualifies for

relief under section 6015(f), after a trial de novo and using an

abuse of discretion standard.    See Ewing v. Commissioner, supra

at 43-44; Fernandez v. Commissioner, supra at 328-329; Butler v.

Commissioner, supra at 287-292.     Petitioner bears the burden of

proving that respondent’s denial of equitable relief under

section 6015(f) was an abuse of discretion.    See Rule 142(a); Alt
                                 - 7 -

v. Commissioner, supra at 311.     Petitioner must demonstrate that

respondent exercised his discretion arbitrarily, capriciously, or

without sound basis in fact or law.      See Jonson v. Commissioner,

118 T.C. 106, 125 (2002), affd. 353 F.3d 1181 (10th Cir. 2003);

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

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

prescribed procedures for determining whether a spouse qualifies

for relief under subsection (f).    The applicable provision is

found in Rev. Proc. 2000-15, 2000-1 C.B. 447.3     We have upheld

the procedures in reviewing a determination.      Washington v.

Commissioner, 120 T.C. 137, 147-152 (2003); Ohrman v.

Commissioner, T.C. Memo. 2003-301.

     Rev. Proc. 2000-15, sec. 4.01, 2000-1 C.B. at 448, provides

seven threshold conditions that must be satisfied before the

Commissioner will consider a request for equitable relief under

section 6015(f).   According to this revenue procedure, one of

these threshold conditions is that the “requesting spouse applies

for relief no later than two years after the date of the

Service’s first collection activity after July 22, 1998, with




     3
        This revenue procedure was superseded by Rev. Proc. 2003-
61, which is effective either for requests for relief filed on or
after Nov. 1, 2003, or for requests for relief pending on Nov. 1,
2003, for which no preliminary determination letter has been
issued as of Nov. 1, 2003. Rev. Proc. 2003-61, sec. 7, 2003-32
I.R.B. 296, 299.
                                 - 8 -

respect to the requesting spouse”.4       See Rev. Proc. 2000-15, sec.

4.01(3), 2000-1 C.B. at 448.   Respondent contends that petitioner

failed to satisfy this threshold condition.

     We need not address respondent’s contention because, even if

petitioner could satisfy the threshold conditions, Rev. Proc.

2000-15, sec. 4.03, 2000-1 C.B. at 448, has a nonexhaustive list

of factors weighing in favor of relief and factors weighing

against relief, and petitioner has failed to present any evidence

with regard to these factors for determining whether to grant

equitable relief.5   Accordingly, we conclude that respondent did

not abuse his discretion by acting arbitrarily, capriciously, or

without sound basis in fact in denying petitioner’s request for

equitable relief under section 6015(f).

     To reflect the foregoing,

                                              Decision will be entered

                                         for respondent.




     4
        Petitioner does not question the validity of this
threshold condition; therefore, we need not address its validity.
See Hall v. Commissioner, T.C. Memo. 2004-170 n.3.
     5
        As we indicated earlier, although respondent denied
equitable relief under sec. 6015(f) based upon the 2-year time
limit, respondent subsequently reviewed petitioner’s request
under the nonexhaustive list of factors of Rev. Proc. 2000-15,
sec. 4.03, 2000-1 C.B. 447, 448-449.
