                        T.C. Memo. 2004-205



                      UNITED STATES TAX COURT



                 NANCY A. SJODIN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 10704-03.         Filed September 14, 2004.


     Nancy A. Sjodin, pro se.

     Blaine Holiday, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     GOEKE, Judge:   This case involves a review of respondent’s

determination that petitioner is not entitled to relief from

joint and several liability under section 6015(f).1    We find no

abuse of discretion in respondent’s determination.



     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code as amended.
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                         FINDINGS OF FACT

     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 was a resident of Minneapolis, Minnesota.

     Petitioner filed joint Forms 1040, U.S. Individual Income

Tax Return, with her spouse, Kenneth E. Sjodin (Mr. Sjodin) for

the taxable years 1987, 1988, 1990, and 1992.     These returns each

reflected tax due which was not paid at the time of filing.       The

amounts in question in this case relate to these returns and not

any additional deficiencies determined by respondent.

     Petitioner and Mr. Sjodin were married for approximately 20

years at the time of the first year in question and remain

married.   There is no evidence they have ever separated.

Petitioner and Mr. Sjodin have four children.     In 1987, two were

in college and two were in high school.     During the years in

question, petitioner and Mr. Sjodin jointly supported their

children and their household.   Petitioner worked as a retail

clerk during the years in question and received wage income which

was subject to withholding.   Mr. Sjodin had a real estate

business, and his income was not subject to withholding.     The

unpaid liabilities are primarily the result of the income of Mr.

Sjodin.
                                 - 3 -

     Petitioner signed the returns for the years in question.

After petitioner learned of a lien on their house, she began to

file separate returns in 1994.

     Mr. Sjodin is a Korean War veteran and has been diagnosed

with a combat-related psychological disorder which caused him to

be secretive and uncommunicative.    He did not physically harm

petitioner, but he was not forthcoming to her with information

relating to his business.   He continued to provide financial

support to petitioner and their children.

     On August 9, 2000, petitioner filed Form 8857, Request For

Innocent Spouse Relief, for the taxable years 1987, 1988, 1990,

and 1992.   On April 3, 2003, respondent issued petitioner Letter

3290, Notice of Determination Concerning Your Request for Relief

under the Equitable Relief Provisions of Section 6015(f), stating

that respondent did not allow her request for the years 1987,

1988, 1990, and 1992.   Petitioner timely filed with this Court a

petition for determination of relief from joint and several

liability on a joint return.

                               OPINION

     Section 6015(f) permits the Secretary to relieve a spouse of

liability if, taking into account all the facts and

circumstances, it is inequitable to hold the spouse liable for

any unpaid tax or any deficiency (or any portion of either) and

relief is not available under section 6015(b) or (c).    The denial
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of equitable relief is reviewed under an abuse of discretion

standard.     Washington v. Commissioner, 120 T.C. 137, 146 (2003).

In deciding whether the determination was an abuse of discretion,

we consider evidence relating to all the facts and circumstances.

Id. at 148.

     Rev. Proc. 2000-15, 2000-1 C.B. 447, contains guidelines

that are considered in determining whether an individual

qualifies for relief under section 6015(f).2    Rev. Proc. 2000-15,

sec. 4.01, 2000-1 C.B. at 448, lists seven threshold conditions

that must be satisfied before the Commissioner will consider a

request for relief under section 6015(f).    Respondent agrees that

the threshold conditions are satisfied in this case.

     Rev. Proc. 2000-15, sec. 4.02, 2000-1 C.B. at 448, provides

that, in cases where a liability reported on a joint return is

unpaid, relief under section 6015(f) will ordinarily be granted

if three elements are satisfied.    Because petitioner is still

married to and living with Mr. Sjodin, she does not meet the

requirements of Rev. Proc. 2000-15, sec. 4.02.

     If relief is not available under Rev. Proc. 2000-15, sec.

4.02, then Rev. Proc. 2000-15, sec. 4.03, 2000-1 C.B. at 448,

provides factors that the Commissioner will consider in deciding



     2
      On Aug. 11, 2003, the Commissioner issued Rev. Proc. 2003-
61, 2003-32 I.R.B. 296, which supersedes Rev. Proc. 2000-15,
2000-1 C.B. 447, effective for requests for relief filed on or
after Nov. 1, 2003.
                               - 5 -

whether to grant relief under section 6015(f).   Rev. Proc. 2000-

15, sec. 4.03(1), lists the following six factors weighing in

favor of granting relief for an unpaid liability:   (1) The

requesting spouse is separated or divorced from the nonrequesting

spouse; (2) the requesting spouse would suffer economic hardship

if relief is denied; (3) the requesting spouse was abused by the

nonrequesting spouse; (4) the requesting spouse did not know or

have reason to know that the reported liability would not be

paid; (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 to the

nonrequesting spouse.   Rev. Proc. 2000-15, sec. 4.03(2), 2000-1

C.B. at 449, lists the following six factors weighing against

granting relief for an unpaid liability:   (1) The unpaid

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

requesting spouse knew or had reason to know that the reported

liability would be unpaid at the time the return was signed; (3)

the requesting spouse significantly benefited (beyond normal

support) from the unpaid liability; (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
                               - 6 -

agreement to pay the unpaid liability.    This list is not

exhaustive, no single factor is determinative, and all factors

should be considered and weighed appropriately.    Rev. Proc. 2000-

15, sec. 4.03.

     Respondent agrees that petitioner will suffer economic

hardship if relief is not granted.     The joint liabilities along

with penalties and interest have grown to over $278,000.

Petitioner earns $2,000 per month, and Mr. Sjodin is retired

earning occasional real estate income and Social Security.     This

factor weighs in petitioner’s favor.

     The parties have stipulated that the liabilities are

attributable at least in small part to petitioner’s income.

     Petitioner and Mr. Sjodin are not divorced or separated, and

there is no divorce decree or agreement in which Mr. Sjodin

assumed responsibility for the payment of the outstanding

liabilities.   We do not hold it against petitioner that she

admirably remained committed to her marriage, and we agree that

in certain cases relief is appropriate for taxpayers who are

married at the time relief is requested.    However, this factor is

neutral in our analysis.

     The parties have stipulated that Mr. Sjodin did not

physically abuse petitioner.   Petitioner argues that Mr. Sjodin

mentally abused her.   We presume that her position is that Mr.

Sjodin’s controlling and secretive nature was abusive.    We do not
                                - 7 -

believe that this rises to the level of abuse necessary to weigh

as a factor in petitioner’s favor.

     Petitioner began filing separate returns in 1994 when she

discovered a lien on the house, and the Appeals officer noted

that she is currently in full compliance with Federal income tax

laws.

        Respondent argues that petitioner had reason to know that

the liabilities shown on the returns she signed would not be

paid.    Petitioner testified that in order to file their returns,

Mr. Sjodin would collect her Forms W-2, Wage and Tax Statement,

and have an accountant complete the returns.     When the joint tax

returns were completed, petitioner signed them.     She did not

inquire into whether the tax shown as due was going to be paid.

This is not surprising, given the picture petitioner has painted

of the way her family dealt with finances.     Petitioner stated

that her job was to raise their four children, while Mr. Sjodin’s

job was to provide for the family.      She claims that in 40 years

of marriage, she has never written a check out of the joint

checking account she shared with Mr. Sjodin.     Petitioner knew

nothing about the family finances and stated that Mr. Sjodin kept

the records locked in his home office.     She was not involved in

financial decisions, and Mr. Sjodin unilaterally chose and bought

their homes over the years.
                                - 8 -

     However, we cannot say that petitioner had no reason to know

that the liabilities listed on the returns would not be paid.      On

the 1987 return, the liability was over $40,000, and only $475

had been withheld.   For the other 3 years at issue, the returns

petitioner signed showed lesser but still significant amounts due

of $12,789, $20,133, and $5,958, and withholding, at the most, of

$1,969.   We believe that it was reasonable for respondent to

conclude that petitioner had reason to know that Mr. Sjodin would

not pay these amounts.    See Morello v. Commissioner, T.C. Memo.

2004-181.

     Respondent argues that petitioner received significant

benefit, beyond normal support, from the unpaid liabilities.

Petitioner testified that in 1987, two of her children were in

high school, and two were in college.    The funds available for

household expenses were augmented over the years in issue because

the tax was not paid.    There is no evidence that petitioner or

her family lived an extravagant lifestyle or that Mr. Sjodin

spent the extra money in any way other than in providing for his

family.   The money was likely used for normal household expenses

and college tuition.    This does not qualify as significant

benefit to petitioner.

     The primary factor weighing in favor of granting petitioner

relief is economic hardship.    In contrast, petitioner’s reason to

know of the unpaid liabilities is “an extremely strong factor
                                - 9 -

weighing against relief.”   Rev. Proc. 2000-15, sec. 4.03(2)(b),

2000-1 C.B. at 449.   Mr. Sjodin testified that petitioner’s

application for relief under section 6015 was the result of

advice from the family’s accountant as part of his estate

planning.   While we recognize that Mr. Sjodin’s disorder has made

communication difficult over the years, it seems that

petitioner’s lack of involvement in the family finances was a

function of the way petitioner and Mr. Sjodin chose to manage

their household duties.   Although payment of the liabilities now

will present an economic hardship to petitioner, we cannot say

that under all of the circumstances respondent abused his

discretion by acting arbitrarily, capriciously, or without sound

basis in fact in denying petitioner’s request for equitable

relief under section 6015(f).


                                             Decision will be entered

                                        for respondent.
