                           T.C. Memo. 2011-253



                        UNITED STATES TAX COURT



GEORGE R. WARD, Petitioner, AND VICTORIA J. WARD, Intervenor v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 4493-09.               Filed October 31, 2011.



        George R. Ward, pro se.

        Victoria J. Ward, pro se.

        Kimberly L. Clark, for respondent.



                MEMORANDUM FINDINGS OF FACT AND OPINION


        MORRISON, Judge:   The petitioner, George R. Ward, seeks our

review under Internal Revenue Code section 6015(e)1 of the IRS’s

denial of relief from joint and several liability for the tax


     1
        All references to sections are to the Internal Revenue
Code.
                               - 2 -

year 2005.   For that year, he filed a joint return with his then

wife, Victoria J. Ward, who is the intervenor in this proceeding.

We sustain the IRS’s determination for the reasons explained

below.

                         FINDINGS OF FACT

     The stipulation of facts, which was filed on September 27,

2010, and the supplemental stipulation of facts, which was filed

on November 10, 2010, are incorporated in this opinion by this

reference.

     George R. Ward and Victoria J. Ward were married in 1991.

     In January 2005, George R. Ward received an early

distribution of $26,995 from his retirement account.

     In August 2005, George R. Ward and Victoria J. Ward

separated.

     George R. Ward and Victoria J. Ward filed a valid joint

federal income-tax return for 2005.2   The return reported the

$26,995 distribution as income, but it did not report the 10-

percent additional tax imposed under section 72(t) on early

distributions from retirement plans.   The 10-percent additional

tax was not paid with the return.

     In June 2006 the IRS determined that the Wards had overpaid

their 2005 tax liability by $5,815.    The IRS applied $818.61 to


     2
      The record reflects that the return was filed by its due
date. However, it is unclear whether the due date was Apr. 15,
2006, or was extended.
                               - 3 -

the Wards’ joint tax liability for 2003 and refunded the

remaining $4,996.39 to Victoria J. Ward.

     In September 2006, divorce proceedings were initiated.    On

May 29, 2007, George R. Ward and Victoria J. Ward were divorced.

     In 2007, George R. Ward and Victoria J. Ward received a

deficiency notice from the IRS determining a $2,666.50 deficiency

for 2005.3   The deficiency was based on the couple’s liability

for the 10-percent additional tax on early distributions from

retirement plans.   Neither George R. Ward nor Victoria J. Ward

filed a Tax Court petition in response to the deficiency notice.

     In July 2007, George R. Ward submitted a request for

innocent-spouse relief to the IRS.     He argued that he should not

be liable for the understatement on the 2005 return:    he said he

had not reviewed the return and could not have known that it was

prepared incorrectly.   On December 3, 2007, the IRS office that

handles innocent-spouse matters sent George R. Ward a letter

informing him that it had made a preliminary determination that

he was not entitled to relief from joint and several liability.

The letter stated that the $26,995 distribution was from George

R. Ward’s retirement account, that the joint return failed to

report the 10-percent additional tax, and that relief was not

available to him under section 6015(b),(c), or (f) because



     3
      The record does not explain why the deficiency was not
$2,699.50, which is 10 percent of $26,995.
                                - 4 -

“relief is not allowed on tax you owe on your own income or

deductions.”    On December 27, 2007, George R. Ward submitted to

the IRS a Form 12509, Statement of Disagreement, stating that the

IRS’s preliminary determination was wrong because he had not

reviewed the return or received the refund.   On September 24,

2008, IRS Appeals Officer Janie Duncan sent George R. Ward a

letter informing him that because “The additional tax charged on

the joint return is solely attributable to your income”, she

determined that he was not entitled to relief from joint and

several liability.   On November 13, 2008, the IRS Appeals Office

mailed a final determination letter to George R. Ward denying him

relief from joint and several liability.   The letter stated that

“Relief is not allowed on tax you owe on your own income or

deductions” and “You knew, or had reason to know, of the income

or deductions that caused the additional tax.”

     George R. Ward filed a Tax Court petition to challenge the

final determination.   At the time, he resided in Idaho.    Victoria

J. Ward entered the case as an intervenor by filing a notice of

intervention.   She resided in Maryland when she filed the notice.

     Trial of this case was held in Boise, Idaho, on September

27, 2010.   The Court issued an order setting this case for

further trial in Washington, D.C., for March 14, 2011.     On

November 10, 2010, the parties filed a supplemental stipulation
                               - 5 -

of facts and moved to close the record.   The Court granted the

motion to close the record on December 13, 2010.

     At trial George R. Ward argued that he should not be held

liable for the 10-percent additional tax because, he asserted, he

had not reviewed the return.   He also argued that a portion of

the distribution from his retirement account had been withheld

for payment of the 10-percent additional tax, that his wife

benefited from the withholding because she received the tax

refund, and that for him to be liable for the tax would require

him to pay the tax twice.

     The IRS took the position that he was not entitled to

section-6015(b) relief because (1) the understatement on the 2005

return was not attributable to an erroneous item of his former

wife, (2) he knew or had reason to know there was an

understatement, and (3) it is not inequitable to hold him liable

for the deficiency.   The IRS argued that he was ineligible for

section-6015(c) relief because the deficiency was solely

allocable to him.   And the IRS contended that he was ineligible

for section-6015(f) relief because (1) the 10-percent additional

tax was attributable to him, not his former wife, and (2) he is

not entitled to relief after consideration of the seven factors

listed in Rev. Proc. 2003-61, sec. 4.03, 2003-2 C.B. 296, 298.
                                 - 6 -

                                OPINION

     Section 6013(d)(3) provides that the income tax for a

married couple who files a joint return is computed by

aggregating the two incomes and that their income-tax liability

is joint and several.    Section 6015(a) provides that

notwithstanding section 6013(d)(3) a person who files a joint

return is relieved of joint liability under three specific

exceptions set forth in section 6015(b),(c), and (f).    Except as

otherwise provided by section 6015, the person seeking section-

6015 relief has the burden of proving entitlement to relief.     Tax

Court Rule of Practice and Procedure 142(a); Alt v. Commissioner,

119 T.C. 306, 311 (2002), affd. 101 Fed. Appx. 34 (6th Cir.

2004).   In this case, George R. Ward has the burden of proof.

     In reviewing the IRS’s denial of section-6015 relief, we

accord no deference to the IRS’s determination.    See Porter v.

Commissioner, 132 T.C. 203, 210 (2009) (stating that the Tax

Court applies a de novo standard of review in reviewing section

6015(b), (c), and (f) determinations).

1.   Section 6015(b)

     Section 6015(b) relieves a person of joint income-tax

liability only if:     (A) a joint return was made for the person,

(B) on the return there is an understatement of tax attributable

to erroneous items of the other filer, (C) the person establishes

that he or she did not know of the understatement and had no
                                 - 7 -

reason to know of the understatement, and (D) it is inequitable

to hold the person liable for the tax deficiency attributable to

the understatement.   These four conditions are imposed by section

6015(b)(1)(A), (B), (C), and (D), respectively.    George R. Ward

has failed to demonstrate that the condition imposed by section

6015(b)(1)(B) is met; i.e., that there is “an understatement of

tax attributable to erroneous items” of the other filer.    Section

1.6015-1(h)(4), Income Tax Regs., provides:    “An erroneous item

is any item resulting in an understatement or deficiency in tax

to the extent that such item is omitted from, or improperly

reported (including improperly characterized) on an individual

income tax return.”   The joint tax return for 2005 reflected an

erroneous item:   the unreported 10-percent additional tax.     But

the 10-percent additional tax was an erroneous item of George R.

Ward, not Victoria J. Ward.     Section 72(t)(1) provides that “If

any taxpayer receives any amount from a qualified retirement

plan * * *, the taxpayer’s tax * * * shall be increased by an

amount equal to 10 percent of the portion of such amount which is

includable in gross income.”4    The $26,995 distribution was

received by George R. Ward, not Victoria J. Ward.    He does not

dispute that the distribution was from a qualified retirement



     4
      The additional tax does not apply to distributions made to
taxpayers who are more than 59-1/2 years old. Sec.
72(t)(2)(A)(i). George R. Ward does not contend that he was more
than 59-1/2 years old at the time of the distribution.
                                 - 8 -

plan and that it was includable in gross income.    The 10-percent

additional tax is therefore George R. Ward’s erroneous item.

     Because George R. Ward failed to satisfy section

6015(b)(1)(B), we need not reach whether he satisfied the other

conditions of section 6015(b).    He is not entitled to relief

under section 6015(b).

2.   Section 6015(c)

     Section 6015(c) allows a person who is divorced or separated

from the person with whom a joint return was filed to elect to

limit his or her liability for any deficiency to the “portion of

such deficiency properly allocable to” the electing person.      A

deficiency resulting from a tax (other than the income tax on

individuals imposed by section 1 and the alternative minimum tax

imposed by section 55) is allocated to the joint filer to whom

the tax would be allocated if separate returns were filed.      Sec.

6015(d)(2), (3)(A); sec. 1.6015-3(d)(4)(ii), Income Tax Regs.

     The 10-percent additional tax would have been allocated to

George R. Ward, not Victoria J. Ward, if they had filed separate

returns.   George R. Ward received the distribution.   As the

recipient, he was the taxpayer who would have been liable for the

tax if separate returns had been filed.

     Because the entire deficiency is properly allocable to

George R. Ward, the limit on George R. Ward’s liability is
                                - 9 -

$2,666.50.   This is the amount of the deficiency for 2005.

Therefore, section 6015(c) affords no relief to George R. Ward.

3.   Section 6015(f)

     If relief is not available under section 6015(b) and (c),

the IRS is allowed by section 6015(f) to relieve a person of

joint liability if it would be inequitable for that person to be

liable.   Section 6015(f) provides that relief is to be granted

under “procedures prescribed by the Secretary”.   This Court has

jurisdiction to decide whether a taxpayer qualifies for relief

under section 6015(f).   Sec. 6015(e)(1)(A); Porter v.

Commissioner, 132 T.C. 203, 206 (2009).

     The IRS has issued revenue procedures to guide its employees

in determining whether a taxpayer is entitled to relief from

joint and several liability.   See Rev. Proc. 2003-61, supra,

modifying and superseding Rev. Proc. 2000-15, 2000-1 C.B. 447.

The Court consults those same guidelines when reviewing the IRS’s

denial of relief.   See Washington v. Commissioner, 120 T.C. 137,

147 (2003) (following Rev. Proc. 2000-15, supra, the prior

version of the guidelines).    Rev. Proc. 2003-61, sec. 4.01, 2003-

2 C.B. at 297, imposes seven threshold conditions for relief

under section 6015(f).   The seventh condition is:   “The income

tax liability from which the requesting spouse seeks relief is

attributable to an item of the individual with whom the

requesting spouse filed the joint return (the ‘nonrequesting
                              - 10 -

spouse’)”.   Rev. Proc. 2003-61, sec. 4.01(7).   The seventh

condition has not been met by George R. Ward.    The income-tax

liability from which he seeks relief is the 10-percent additional

tax on early distributions from retirement plans.       As explained

in our discussion of section-6015(b) relief, the 10-percent

additional tax is George R. Ward’s item of tax liability, not

Victoria J. Ward’s.   Furthermore, none of the four exceptions to

the imposition of the seventh condition is applicable.      See Rev.

Proc. 2003-61, sec. 4.01(7)(a)-(d).    Therefore, George R. Ward is

not entitled to relief under section 6015(f).

4.   Conclusion

     The determination of the IRS is sustained.

     To reflect the foregoing,


                                           Decision will be entered

                                      for respondent.
