                          T.C. Summary Opinion 2015-8



                         UNITED STATES TAX COURT



  KATERYNA BRODSKIY, Petitioner, AND ROSS BRODSKIY, Intervenor v.
       COMMISSIONER OF INTERNAL REVENUE, Respondent



      Docket No. 11281-13S.                         Filed February 5, 2015.



      Kateryna Brodskiy, pro se.

      Ross Brodskiy, pro se.

      Laura J. Mullin, for respondent.



                               SUMMARY OPINION


      CHIECHI, Judge: This case was heard pursuant to the provisions of section

7463 of the Internal Revenue Code in effect when the petition was filed.1


      1
        Hereinafter, all section references are to the Internal Revenue Code in
effect at all relevant times. All Rule references are to the Tax Court Rules of
                                                                        (continued...)
                                         -2-

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.

      Respondent determined a deficiency in, an addition under section

6651(a)(1) to, and a penalty under section 6662(a) on the Federal income tax (tax)

of petitioner and intervenor for their taxable year 2010 of $6,642, $1,062, and

$1,328.40, respectively.

      The issue remaining for decision is whether petitioner is entitled to relief

under section 6015(c).2 We hold that she is.

                                    Background

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

      At the time petitioner filed the petition, she resided in California.

      At a time not established by the record, petitioner received a master’s degree

in business administration. On September 13, 2012, she became a certified public

accountant. Over the course of petitioner’s education, she has taken at least one

tax course.


      1
       (...continued)
Practice and Procedure.
      2
        Petitioner and respondent filed a stipulation of settled issues in which she
agreed to all of the determinations for the taxable year 2010 that respondent made
in the notice of deficiency that respondent issued to her and intervenor Ross
Brodskiy.
                                         -3-

      From at least as early as 2010, the year at issue, to the time of the trial in

this case, petitioner was employed as an accountant.

      As of December 31, 2011, petitioner and intervenor were legally separated.

      On February 14, 2012, petitioner and intervenor jointly filed late Form

1040, U.S. Individual Income Tax Return, for their taxable year 2010 (2010

return).

      Petitioner and intervenor attached to the 2010 return Schedule A, Itemized

Deductions (2010 Schedule A). In the 2010 Schedule A, they claimed, inter alia,

“[u]nreimbursed employee expenses” of $17,068 for vehicle mileage attributable

to a business of intervenor (intervenor’s claimed 2010 unreimbursed employee

expenses).

      Petitioner and intervenor attached to the 2010 return Schedule C, Profit or

Loss From Business (2010 Schedule C). In the 2010 Schedule C, they reported

that intervenor was the proprietor of a software consulting business known as

Xboct Consulting. In the 2010 Schedule C, petitioner and intervenor reported

“[g]ross receipts or sales” and “[g]ross income” of $18,511, deducted, inter alia,

“[c]ar and truck expenses” of $13,537 (intervenor’s claimed 2010 car and truck

expenses), and claimed a loss of $15,406.
                                        -4-

      On February 21, 2013, respondent issued to petitioner and intervenor a

notice of deficiency for their taxable year 2010 (2010 notice). In the 2010 notice,

respondent determined, inter alia, to (1) disallow $10,577 of intervenor’s claimed

2010 car and truck expenses reported in the 2010 Schedule C, (2) disallow

$15,946 of intervenor’s claimed 2010 unreimbursed employee expenses reported

in the 2010 Schedule A, and (3) include in income $411 of ordinary dividends that

petitioner and intervenor did not include in income in their 2010 return.

      On March 21, 2013, respondent’s Centralized Innocent Spouse Operations

Center (respondent’s CISOC) received petitioner’s Form 8857, Request for

Innocent Spouse Relief (petitioner’s Form 8857). In that form, petitioner claimed

that she had total monthly income of $6,460 and total monthly expenses of $6,470.

In petitioner’s Form 8857, petitioner made, inter alia, the following statement

regarding the 2010 return: “I have no idea how numbers were calculated or where

they came from.”

      Intervenor did not submit to respondent’s CISOC any response to

petitioner’s Form 8857.

      After petitioner submitted petitioner’s Form 8857 to respondent’s CISOC,

she timely filed a petition with the Court with respect to the 2010 notice.

Intervenor did not file a petition with the Court with respect to the 2010 notice.
                                        -5-

      Sometime after petitioner filed the petition, respondent’s CISOC granted

petitioner relief under section 6015(c). In granting that relief, respondent’s

CISOC used a workpaper dated January 21, 2014, that one of respondent’s

examiners had prepared (respondent’s examiner’s workpaper) after having

considered petitioner’s Form 8857. Respondent’s examiner’s workpaper stated in

pertinent part:

                          GENERAL INFORMATION

      LITIGATION 2010 U/S Sep 12-31-2011. RS [requesting spouse]
      states forgery. Per tacit consent, no forgery proven, it’s a valid jt
      [joint] return. RS checked box for abuse, but gave no explanation or
      documentation. Did not speak with RS about abuse, as she is relieved
      per attribution. RS is granted full relief of NRS [non-requesting
      spouse] Exam adjusted Sch C, which caused adjusted itemized
      deductions. can’t prove RS had actual knowledge. RS was not
      involved in tax prep. RS was not involved in NRS self employed
      business. NRS had sep [separate] accts [accounts].

                             SPOUSE’S RESPONSE

      No Reply

                            EVALUATION PROCESS

      Year 2010

                                    IRC 6015(c)

      Understatement of tax
      No payments were made by the RS
                                 -6-

Taxpayers are currently divorced, widowed, legally separated, or they
   lived apart (12 consecutive months)
Filed a joint return
Taxpayer stated the signature was forged
Signatures don’t match - consider intent factors for tacit consent

          Factors to determine the intent in filing jointly

RS had a filing requirement for that year
RS did not file a separate return for that year
There was not a history of filing separately
RS participated in preparation of the joint return by providing W-2s
  and 1099s, etc.
RS either paid balance due or received refund for that year
The taxpayers did not file an extension for the return
RS did not receive tax benefit (reduced tax, EIC) in connection with
  the joint return
No Schedules C, E, F filed, or filed but did not include the RS
RS agreed to signing a joint return
Taxpayer had the intent to file a joint return - valid return
Explanation - 2010 jt return received 2-14-2012- 2009 jt return filed-
  return was efiled no sep return filed by RS - per tacit consent - no
  forgery found
RS did not sign a waiver/report prior to stat
There was a defaulted Statutory Notice of Deficiency in the RS’s
  name - unagreed assessment
(AUR PC 90, Exam DC 10, TC495 or TC599/88)
No OIC accepted
There is enough information to determine the claim
Balance due remaining
Claim filed timely
Understatement of tax solely attributable to the NRS
Erroneous items: NRS has Exam adjusted Sch C of $10,577, which
  caused adjusted itemized deductions- there is a di [sic] minimis jt
  amt of $9 for Domestic Production Activities Deduction and NRS
  had $411 in Ordinary Dividends which caused a di [sic] minimis
  amt of tax.
                                          -7-

      No fraudulent transfer of assets
      RS had no actual knowledge
      Explanation: Can’t prove RS had actual knowledge of NRS
        disallowed Sch Cl - RS was not involved in NRS business, she was
        aware of his W-2 income of approx. $100,000.
        RS was not involved in tax prep. Return was electronically filed
      No disqualified assets transferred - grant relief

                         Relief granted under IRC 6015 (c)

      Either the RS made no payments, or is not requesting a refund. No
        refundable payments.
                                 Full grant

                                   CONCLUSION

      2010 - Grant under 6015(c)

      Comment: RS stated in Exam interview, some dividends were hers,
        not sure amt - caused. Di [sic] Minimis tax. RS is granted full
        relief.

      On September 23, 2013, Mr. Brodskiy timely filed a notice of intervention.

                                      Discussion

      Section 6013(a) provides that married taxpayers may elect to file jointly a

tax return. If a joint tax return is filed, the spouses are jointly and severally liable

for the entire tax due. Sec. 6013(d)(3); Butler v. Commissioner, 114 T.C. 276, 282

(2000). If certain requirements are met, a spouse may be relieved of joint and

several liability in one of three ways. See sec. 6015(b), (c), (f).
                                         -8-

      We address only whether petitioner is entitled to relief under section

6015(c). That is because our resolution of that issue provides petitioner the relief

that she seeks. In order to be entitled to relief under section 6015(c), the spouse

who requests that relief (requesting spouse) must satisfy several requirements,

including that the requesting spouse filed jointly a tax return for the year at issue

and was divorced or separated at the time the requesting spouse seeks that relief.

      It is petitioner’s position, and respondent concedes, that she is entitled to

relief under section 6015(c). Intervenor disagrees. It is intervenor’s position that

petitioner is not entitled to relief under section 6015(c) because at the time she

signed the 2010 return she had actual knowledge, or should have known, of the

items giving rise to the deficiency that respondent determined in the 2010 notice

and that were not allocable to her under section 6015(d). In support of that

position, intervenor relies on section 6015(c)(3)(C), the so-called actual know-

ledge exception to relief under section 6015(c).3

      3
        We reject intervenor’s position that, because petitioner should have known
of the items giving rise to the deficiency for taxable year 2010 that are not allo-
cable to her under sec. 6015(d), sec. 6015(c)(3)(C) precludes her entitlement to
relief under sec. 6015(c). Indeed, we need not even determine on the record be-
fore us whether petitioner should have known about those items. That is because
sec. 6015(c)(3)(C) does not apply unless the requesting spouse, here petitioner,
has “actual knowledge” of the items that gave rise to the deficiency in question
and that are not allocable to the requesting spouse under sec. 6015(d). See
                                                                        (continued...)
                                         -9-

      Section 6015(c)(3)(C) in essence precludes relief under section 6015(c) to a

requesting spouse if the Commissioner of Internal Revenue demonstrates that the

requesting spouse had actual knowledge at the time that spouse signed the tax

return of any item giving rise to a deficiency (or portion thereof) which is not

allocable to the requesting spouse under section 6015(d). Respondent, who would

bear the burden under section 6015(c)(3)(C) of establishing petitioner’s actual

knowledge of items giving rise to all or a portion of the deficiency for taxable year

2010 that are not allocable to her, concedes that respondent cannot do so. We

need not decide whether under those circumstances that burden shifts to

intervenor. See, e.g., Knight v. Commissioner, T.C. Memo. 2010-242, 2010 WL

4536996, at *2. That is because on the record before us we find that petitioner did

not have actual knowledge of the items that gave rise to the deficiency for taxable

year 2010 and that are not allocable to her under section 6015(d).4


      3
       (...continued)
Cheshire v. Commissioner, 115 T.C. 183, 195 (2000), aff’d, 282 F.3d 326 (5th Cir.
2002).
      4
        Respondent acknowledges that petitioner “admitted to having some know-
ledge of the [$411 of] ordinary dividends” that respondent determined in the 2010
notice petitioner and intervenor did not report in the 2010 return. However,
according to respondent, “that adjustment only gave rise to a de minimis amount
of tax.” Intervenor does not argue that petitioner is not entitled to relief under sec.
6015(c) relating to the portion of the deficiency allocable to those dividends.
                                                                          (continued...)
                                         - 10 -

      In finding that petitioner did not have the actual knowledge required in

order for section 6015(c)(3)(C) to apply, we have considered the facsimile on

which intervenor relies and which intervenor sent to respondent on April 2, 2014

(April 2, 2014 facsimile). That facsimile purports to be a copy of an email that

intervenor sent to petitioner regarding the 2010 return and petitioner’s response to

intervenor’s email. In the April 2, 2014 facsimile, intervenor’s email to petitioner

states: “2010 taxes, final, filling [sic] at 2:30 pm”. Petitioner’s response by email

to intervenor’s email states: “It looks ok. Pls scan certified mail slip so I’ll track

it.” On the record before us, we reject intervenor’s contention that the April 2,

2014 facsimile establishes the actual knowledge that section 6015(c)(3)(C)

requires in order to preclude petitioner’s entitlement to relief under section

6015(c).

      The deficiency for taxable year 2010 is almost entirely due to respondent’s

disallowance in the 2010 notice of deductions claimed in the 2010 return for

certain expenses relating to intervenor’s software consulting business.5 Petitioner,

whose testimony we found to be credible, testified that intervenor prepared the



      4
      (...continued)
Under the circumstances presented, we do not consider that question.
      5
          See supra note 4.
                                         - 11 -

2010 return using a computer program for preparing returns and that she did not

(1) participate in the preparation of that return or (2) give intervenor any advice

regarding his preparation of that return. Petitioner also testified that (1) she had

“nothing to do with his [intervenor’s] business”; (2) she had “no knowledge of

miles he drove in his car, why he claimed it”; and (3) “this * * * expense

[intervenor’s 2010 claimed car and truck expenses and intervenor’s 2010 claimed

unreimbursed employee expenses] has nothing to do with me”.

        Based upon our examination of the entire record before us, we find that

petitioner is entitled to relief under section 6015(c).

        We have considered all of the contentions and arguments of the parties that

are not discussed herein, and we find them to be without merit, irrelevant, and/or

moot.

        To reflect the foregoing,


                                                  Decision will be entered for

                                        petitioner.
