                        T.C. Memo. 2009-281



                      UNITED STATES TAX COURT



                   JOHN MALUDA, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 26429-07.                Filed December 7, 2009.



     Harvey R. Poe, for petitioner.

     Joseph J. Boylan, for respondent.



                        MEMORANDUM OPINION


     FOLEY, Judge:   The issue for decision is whether petitioner,

pursuant to section 6015,1 is entitled to innocent spouse relief



     1
       Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
                               - 2 -

with respect to his 1998, 1999, 2000, 2001, and 2002 (years in

issue) Federal income tax liabilities.    The parties submitted

this case fully stipulated pursuant to Rule 122.

                            Background

     Petitioner and Cathy Maluda (Ms. Maluda), both high school

graduates, were married on June 11, 1994.    During the years in

issue, petitioner operated a Snap-On Tool dealership as a sole

proprietor, Ms. Maluda was an unemployed homemaker, and the

Maludas held joint checking and savings accounts at Valley

National Bank.

     The Maludas’ joint Federal income tax returns relating to

the years in issue were prepared by Jay Rodaman.    The prepared

returns, however, were not filed with the Internal Revenue

Service.   On December 29, 2004, the Maludas untimely filed joint

Federal income tax returns relating to 1999, 2000, 2001, and

2002.   On May 31, 2005, the Maludas filed a joint amended Federal

income tax return relating to 2000.    On February 12, 2007, the

Maludas untimely filed a joint Federal income tax return relating

to 1998.   The Maludas reported, but failed to pay, tax

liabilities on each filed return.

     On June 26, 2006, the Maludas began to live in separate

households.   On December 22, 2006, Ms. Maluda filed for divorce,

asserting that the marriage was irretrievably broken and that
                                 - 3 -

petitioner had endangered her life.      On May 8, 2007, respondent

received petitioner’s Form 8857, Request for Innocent Spouse

Relief, in which petitioner requested relief pursuant to section

6015(f) and asserted that it would be inequitable to hold him

liable for any unpaid tax because “Cathy removed sums of money

from [his] joint bank account with Cathy which she purportedly

used to pay the Service”.     On October 24, 2007, in a final

determination letter relating to 1998, 1999, and 2001 and a final

determination letter relating to 2000 and 2002, respondent

informed petitioner that he was not entitled to section 6015(f)

relief.   The stated justification for the denial of relief was

that “relief is not allowed on tax you owe on your own income”.

     On November 16, 2007, petitioner, while residing in

Pennsylvania, filed his petition with this Court.     Respondent, on

December 28, 2007, notified Ms. Maluda that petitioner was

seeking relief from joint and several liability relating to the

years in issue and that she had a right to intervene.     On

September 8, 2008, the date the parties submitted the case fully

stipulated, the Maludas’ divorce was not yet final.

                              Discussion

     Married taxpayers may elect to file a joint Federal income

tax return.   Sec. 6013(a).    Each spouse filing the return

generally is jointly and severally liable for the accuracy of the
                                 - 4 -

return and the entire tax due.    Sec. 6013(d)(3).   Pursuant to

section 6015(a), however, a taxpayer may seek relief from joint

liability.

     Petitioner contends that, pursuant to section 6015(f), he is

entitled to relief from liability for the years at issue.

Petitioner further contends that funds designated for payment of

the tax liabilities relating to the years in issue were

misappropriated by Ms. Maluda for her own benefit and that he had

no control over his income after giving it to Ms. Maluda.

Respondent contends that the tax liabilities related to the years

in issue are attributable solely to petitioner’s income, and,

consequently, petitioner is not eligible for equitable relief.

     Section 6015(f) provides that the Commissioner is authorized

to grant relief from joint and several liability if the facts and

circumstances indicate that it would be inequitable to hold the

requesting spouse liable for any unpaid tax.    Additionally,

relief pursuant to section 6015(b) or (c) must not be available

to the taxpayer.   In reviewing respondent’s determination, we

apply a de novo standard of review as well as a de novo scope of

review.   See Porter v. Commissioner, 132 T.C. __, __ (2009) (slip

op. at 11-12).   Petitioner bears the burden of proving he is

entitled to equitable relief pursuant to section 6015(f).     See

Rule 142(a); Porter v. Commissioner, supra.
                               - 5 -

     Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. 296, 297,2 sets

forth threshold conditions that must be satisfied before the

Commissioner may consider granting section 6015(f) equitable

relief.3   Of those conditions, respondent challenges whether the

liability from which petitioner seeks relief is attributable to

an item of the nonrequesting spouse.   This requirement is met if

petitioner can establish that he did not know, and had no reason

to know, that Ms. Maluda misappropriated, for her benefit, funds

intended for the payment of tax (misappropriation exception) or

if petitioner can rebut the presumption that his earnings are

attributable to him (nominal ownership exception).   Id. sec.

4.01(7), 2003-2 C.B. at 297.

     We agree with petitioner that respondent inappropriately

denied the requested relief solely because the liability was

attributable to petitioner’s income.   Indeed, respondent failed



     2
       We note that Rev. Proc. 2003-61, 2003-2 C.B. 296,
superseded Rev. Proc. 2000-15, 2000-1 C.B. 447. Rev. Proc. 2003-
61, supra, is effective for requests for relief pursuant to sec.
6015(f) which were filed on or after Nov. 1, 2003, and for
requests for such relief which were pending on, and for which no
preliminary determination letter had been issued as of, that
date. Id. sec. 7, 2003-2 C.B. at 299.
     3
       In Lantz v. Commissioner, 132 T.C. __, __ (2009) (slip op.
at 33), we held that the 2-year requirement of sec. 1.6015-
5(b)(1), Income Tax Regs. is an invalid interpretation of sec.
6015. Accordingly, the 2-year requirement is not applicable to
petitioner’s request for relief.
                               - 6 -

to consider the misappropriation exception or the nominal

ownership exception.   We engage in a de novo review to determine

whether petitioner qualifies for section 6015 relief.

Petitioner, who has the burden of proof, agreed with respondent,

however, to submit this case fully stipulated despite the fact

that there were critical factual issues in dispute.   The parties

have stipulated returns that were filed, petitioner’s request for

relief, respondent’s evaluations prepared by respondent’s

examiners, and the final determination letters.   The stipulation

establishes various factual issues, but simply does not establish

that Ms. Maluda misappropriated funds intended for tax payments

or that petitioner’s earnings from his sole proprietorship are

not attributable to him.   For example, the parties stipulated

that bank records relating to the Maludas’ joint savings account

were fabricated, yet failed to stipulate who fabricated these

records or whether the fabrication was used to deceive

petitioner.   The parties also stipulated that certain payments

were made to credit card companies, yet there is no evidence

illuminating how such payments bolster petitioner’s contention.

Accordingly, petitioner has failed to establish that he is

entitled to equitable relief pursuant to section 6015(f).
                              - 7 -

     Contentions we have not addressed are irrelevant, moot, or

meritless.


                                      Decision will be entered for

                              respondent.
