                         T.C. Memo. 2009-115



                       UNITED STATES TAX COURT



                 STEPHANIE RENAE HARDIN, Petitioner v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12331-08.                Filed May 26, 2009.



     Stephanie Renae Hardin, pro se.

     Michael W. Bitner, for respondent.



               MEMORANDUM FINDINGS OF FACT AND OPINION


     CHIECHI, Judge:    Respondent determined a deficiency of

$2,114 in petitioner’s Federal income tax (tax) for her taxable

year 2006.
                                   - 2 -

       We must decide whether petitioner is entitled to relief

under section 6015(f)1 for her taxable year 2006.       We hold that

she is not.

                             FINDINGS OF FACT

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

       Petitioner resided in Iowa at the time she filed the peti-

tion in this case.

       During 2006, petitioner’s former spouse, Maxwell K. Hardin

(Mr. Hardin), received from the State of Iowa unemployment

compensation totaling $6,817 (Mr. Hardin’s unemployment compensa-

tion).       That compensation was deposited into a checking account

over which Mr. Hardin and petitioner each had signature author-

ity.       Petitioner used funds deposited into that checking account

in order to pay certain household bills.        Petitioner did not

receive a benefit beyond normal support from Mr. Hardin’s unem-

ployment compensation.

       Petitioner and Mr. Hardin jointly filed Form 1040A, U.S.

Individual Income Tax Return, for their taxable year 2006 (2006

joint return).       In that return, petitioner and Mr. Hardin did not

include Mr. Hardin’s unemployment compensation in their gross

income.




       1
      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 Practice and Procedure.
                               - 3 -

     During 2006, petitioner did not work.   She began working in

June 2007.2

     At no time did Mr. Hardin physically or mentally abuse

petitioner.

     Petitioner and Mr. Hardin did not transfer any assets to

each other as part of a fraudulent scheme between them.    Nor did

Mr. Hardin transfer to petitioner any disqualified assets as

defined in section 6015(c)(4)(B)(i).

     Petitioner timely filed a tax return for her taxable year

2007.

     On February 25, 2008, respondent issued to petitioner and

Mr. Hardin a notice of deficiency with respect to their taxable

year 2006 (2006 notice).   In that notice, respondent determined

that Mr. Hardin’s unemployment compensation is includible in the

gross income of petitioner and Mr. Hardin.

     On May 20, 2008, petitioner filed the petition in this case.

     On August 19, 2008, petitioner and Mr. Hardin divorced and a

stipulated decree of dissolution of marriage (divorce decree) was

entered.   Although that decree contains provisions regarding the

rights of petitioner and Mr. Hardin to claim certain dependency

exemptions and child tax credits with respect to their children,

it does not provide that Mr. Hardin has a legal obligation to pay



     2
      The record does not disclose the type of work that
petitioner did during 2007.
                              - 4 -

any outstanding tax liability that he and petitioner incurred

while married.

     On October 24, 2008, after petitioner had filed the petition

in this case, she submitted to respondent’s Appeals Office

(Appeals Office) Form 8857, Request for Innocent Spouse Relief

(And Separation of Liability and Equitable Relief), with respect

to her taxable year 2006 (petitioner’s Form 8857).   Petitioner

attached a statement to that form that stated:

          I feel I should not be responsible to pay this.
     The year of 2006 I did not work. My ex husband is the
     one who * * * took care of our taxes. Yes I knew he
     had received unemployment at times during that year.
     It is * * * my fault I did not read over the tax * * *
     return before signing it, but even if I had I still did
     not know before this situation occured [sic] that * * *
     you have to * * * claim unemployment on tax returns.
     He (my ex) never told me he had to. Each year he
     either did them online or took them to someone to do
     for us and I just signed it when it was done.

     Petitioner was in good physical and mental health when she

and Mr. Hardin filed their 2006 joint return and when she submit-

ted petitioner’s Form 8857 to the Appeals Office.

     A settlement officer with the Appeals Office (settlement

officer) who was assigned petitioner’s Form 8857 reviewed peti-

tioner’s request for relief under section 6015(b), (c), and (f)

and determined that she was not entitled to that relief.   The

settlement officer prepared a memorandum setting forth her

reasons for that determination.   That memorandum stated in

pertinent part:
                         - 5 -

                  GENERAL BACKGROUND

* * * The information return matching program found
that the 2006 joint tax return filed by the petitioner
and her ex-husband failed to report $6,817 of unemploy-
ment compensation.

On December 10, 2007 the taxpayer was issued a CP2000
notice informing both her and her ex-husband of the
addition to tax due to the unreported unemployment
income. * * *

The case file does not contain any information showing
if the taxpayer responded to the CP2000 notice. A
statutory notice of deficiency was issued on February
25, 2008. The understatement of tax shown on the
notice was $2,114. There were no penalties or addi-
tions to tax shown on the notice.

Only * * * [petitioner] filed a tax court petition
protesting the amounts shown on the statutory notice.
* * * [Mr.] Hardin did not petition the tax court. The
amount in question has been assessed on an MFT 31
account for * * * [Mr.] Hardin.

The tax court petition filed by * * * [petitioner]
states the following:

     “I feel I should not have to pay this mainly
     because I did not work the year in question.
     Also, my ex-husband is the one who had the
     taxes filed that year. I just signed the
     papers when they were ready.

     I did not work most of the year in 2005, none
     in 2006, and only a few months toward the end
     of 2007. My soon to be ex-husband was the
     main provider of the household and took care
     of filing all of the taxes.”

It should be noted that * * * [petitioner] does not
disagree with the adjustments related to the unreported
unemployment income. She just feels she should not be
held responsible for the additional tax. She believes
the income was her ex-husband’s and that he should be
solely responsible for paying the additional tax owed.
                          - 6 -

* * * [Petitioner] provided a form 8857 * * * to the
Appeals Office. She attached a written statement to
the form stating why she should qualify for innocent
spouse relief.

After a telephone conference with * * * [petitioner],
it was determined that she did not qualify for innocent
spouse relief. She does not agree with the position
the government is taking in denying her innocent spouse
request.

This case is being sent over for trial preparation
because the Appeals Officer and * * * [petitioner]
could not reach an agreement regarding the Innocent
spouse Issue.

  *        *       *       *       *        *         *

Is the taxpayer entitled to relief from liability under
Internal Revenue Code Section 6015?

               SUMMARY AND RECOMMENDATION

No the taxpayer is not entitled to receive innocent
spouse relief.

The taxpayer does not qualify for relief under Internal
Revenue Code Sections 6015(b) and (c).

The factors in favor of granting relief under Code
Section 6015(f) are outweighed by the factors against
granting relief. Therefore, it is recommended that the
taxpayer’s request for innocent spouse relief be de-
nied.

                 DISCUSSION AND ANALYSIS

  *        *       *       *       *        *         *

6015(f)

      Relief is provided for under code section
      6015(f) if, taking into account all the facts
      and Circumstances, it is inequitable to hold
      the individual liable for any unpaid tax or
      any Deficiency (or any portion of either);
      and relief is not available under subsection
      6015(b) or (c).
                          - 7 -

      Threshold Factors under IRC Section 6015(f)

           A joint return was filed.

           IRC Sections 6015(b) and (c) are not avail-
           able.

           There was a timely application for relief.

           There is no evidence of fraudulent transfers
           of assets.

           There is no evidence of disqualified assets
           transferred.

           There is no evidence a fraudulent joint re-
           turn presented.

           The tax is attributable to the non-requesting
           spouse. Exceptions:
                Attribution is solely due to community
                property rules
                Ownership of income is in name only
                The non-requesting spouse misappropri-
                ated funds to pay the tax
                The requester suffered from abuse and
                didn’t challenge the taxes for fear of
                retaliation

Based upon the facts known to the Appeals Officer, the
threshold factors have been met by the taxpayer.

TIER I AND TIER II Factors of section 6015(f)

Following are the circumstances under which equitable
relief under section 6015(f) will Ordinarily be
granted.

TIER I - applies to underpayment cases. Does not apply
to this situation. This case is a result of a defi-
ciency on unreported items on the tax return.

(1)   In cases where a liability reported on a joint
      return is unpaid, equitable relief under 6015(f)
      will ordinarily be granted in cases were ALL of
      the following elements are satisfied:
                         - 8 -

     (a) At the time relief is requested, the request-
          ing spouse is no longer married to, is le-
          gally separated from, the nonrequesting
          spouse, or has not been a member of the same
          household as the requesting spouse at any
          time during the 12-month period ending on the
          date relief was requested;

     (b) At the time the return was signed, the re-
          questing spouse had no knowledge or reason to
          know that the tax would not be paid, The
          requesting spouse must establish that it was
          reasonable for the requesting spouse to be-
          lieve that the nonrequesting spouse would pay
          the reported liability. If a requesting
          spouse would otherwise qualify for relief
          under this section, except for the fact that
          the requesting spouse had no knowledge or
          reason to know of only a portion of the un-
          paid liability, then the requesting spouse
          may be granted relief only to the extent that
          the liability is attributable to such por-
          tion; and

     (c) The requesting spouse will suffer economic
          hardship if relief is not granted. For pur-
          poses of this section, the determination of
          whether a requesting spouse will suffer eco-
          nomic hardship will be made by the Commis-
          sioner or the Commissioner’s delegate, and
          will be based on rules similar to those pro-
          vided in Section 301.6343-1(b)(4) of the
          Regulations on procedure and Administration
          (the same as those provided in the economic
          hardship provisions for offers and compro-
          mise).

TIER II

The Secretary may grant equitable relief under Section
6015(f) or 66(c) if, taking into account all of the
facts and circumstances, it is inequitable to hold the
requesting spouse liable for all or part of the unpaid
liability or deficiency. The following is a partial
list of the positive and negative factors that will be
taken into account in determining whether to grant full
or partial equitable relief under Section 6015(f) or
66(c). No single factor will be determinative of
                         - 9 -

whether equitable relief will or will not be granted in
any particular case. Rather, all factors will be
considered and weighed appropriately. The list is not
intended to be exhaustive.

     (a) Marital status. The requesting spouse is
          separated (whether legally separated or liv-
          ing apart) or divorced from the nonrequesting
          spouse.

          MEETS. The taxpayer meets this item. The
          taxpayer is recently divorced from her ex-
          husband. She is currently living with her
          boy friend.

          This factor weighs in favor of the requesting
          spouse.

     (b) Economic Hardship. The requesting spouse
          would suffer economic hardship (within the
          meaning of section 4.02(1)(c) of this revenue
          procedure) if relief from liability is not
          granted.

          DON’T KNOW. The taxpayer was provided with a
          form 8857 along with the related extensive
          questionnaire worksheet that gathers the data
          needed to make this determination. She pro-
          vided Appeals with the form 8857 but not the
          worksheet and questionnaire. It may be ap-
          propriate to note that she recently had a
          baby at the end of October, 2008.

          During the Appeals conference, she stated she
          was only going to take a short period of time
          off after the birth of child. However, be-
          cause she does not want to pay the
          deficiency, she is considering not working
          for at least 6 months or longer. This is a
          possible indicator that she would would not
          suffer an economic hardship if she were re-
          quired to pay the amount owed.

     (c) No knowledge or reason to know. In the case
          of a liability that was properly reported but
          not paid, the requesting spouse did not know
          and had no reason to know that the liability
          would not be paid. In the case of a liabil-
                   - 10 -

    ity that arose from a deficiency, the re-
    questing spouse did not know or had no reason
    to know of the item that gave rise to the
    liability.

    DOES NOT MEET. The requesting spouse has
    acknowledged she knew her ex-husband received
    the unreported unemployment benefits. She
    paid household bills with the unreported
    income.

     This factor does not favor the requesting
     spouse.

(d) Nonrequesting Spouse’s legal obligation. The
     nonrequesting spouse has a legal obligation
     pursuant to a divorce decree or agreement to
     pay the outstanding liability. This will not
     be a factor weighing in favor of relief if
     the requesting spouse knew or had reason to
     know, at the time the divorce decree or
     agreement was entered into, that the
     nonrequesting spouse would not pay the lia-
     bility.

     DOES NOT MEET. The divorce decree does not
     address any legal obligation of either spouse
     to pay the understatement of income tax.

     This factor does not favor the requesting
     spouse.

(e) Significant benefit. The requesting spouse
     has significantly benefited (beyond normal
     support) from the unpaid liability or items
     giving rise to the deficiency. See Section
     1.6013-5(b).

     MEETS. The requesting spouse did not benefit
     from the unreported income. The unemployment
     benefits received were used to pay the normal
     household bills.

     This factor favors the requesting spouse.

(f) Compliance with federal income tax laws. The
     requesting spouse has made a good faith ef-
     fort to comply with federal income tax laws
                        - 11 -

          in the tax years following the tax year or
          years to which the request for relief re-
          lates.

          MEETS. The requesting spouse meets this
          factor in considering relief. The requesting
          spouse filed a joint return with her ex-hus-
          band for the 2005 and 2006 tax years. She
          filed as head of household for the 2007 tax
          year.

          This factor favors the requesting spouse.

     (g) Abuse. The requesting spouse was abused by
          the nonrequesting spouse, But such abuse did
          not amount to duress.

          DOES NOT MEET. The requesting spouse was not
          abused by her ex-husband.

          This factor does not favor granting innocent
          spouse relief.

     (h) Mental or physical health. Whether the re-
          questing spouse was in poor mental or physi-
          cal health on the date the requesting spouse
          signed the return or at the time the relief
          was requested.

          DOES NOT MEET. The requesting spouse was in
          good mental and physical health - both at the
          time the return was signed and at the time
          the innocent spouse relief was requested.

          This factor does not favor granting innocent
          spouse relief.

Taking into account all of the facts and circumstances
of this case, I DO NOT THINK it is inequitable, under
Section 6015(f) to hold the taxpayer liable for any
unpaid tax or any deficiency. [Reproduced literally.]
                               - 12 -

                               OPINION

     The only dispute between the parties is whether petitioner

is entitled to relief under section 6015(f).3   Petitioner bears

the burden of proving that she is entitled to relief under that

section.4   See Rule 142(a); Jonson v. Commissioner, 118 T.C. 106,

113 (2002), affd. 353 F.3d 1181 (10th Cir. 2003).

     Section 6015(f) provides:

     SEC. 6015.   RELIEF FROM JOINT AND SEVERAL LIABILITY ON
                  JOINT RETURN.

          (f) Equitable Relief.–-Under procedures prescribed
     by the Secretary, if--

                 (1) taking into account all the facts and
            circumstances, it is inequitable to hold the indi-
            vidual liable for any unpaid tax or any deficiency
            (or any portion of either); and

                 (2) relief is not available to such individ-
            ual under subsection (b) or (c),

     the Secretary may relieve such individual of such
     liability.

     As directed by section 6015(f), the Commissioner of Internal

Revenue (Commissioner) has prescribed procedures in Rev. Proc.

2003-61, 2003-2 C.B. 296 (Revenue Procedure 2003-61), that are to

be used in determining whether it would be inequitable to find



     3
      Petitioner agrees that the deficiency that respondent
determined in the 2006 notice is correct. Petitioner also agrees
that she is not entitled to relief under sec. 6015(b) or (c).
     4
      In a so-called stand-alone nondeficiency case, the standard
of review under sec. 6015(f) is de novo. Porter v. Commissioner,
132 T.C.    (2009).
                               - 13 -

the requesting spouse liable for part or all of the deficiency in

question.    That revenue procedure lists seven threshold condi-

tions (threshold conditions) which must be satisfied before the

Commissioner will consider a request for relief under section

6015(f).    Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297.

Respondent concedes that those conditions are satisfied in the

instant case.

     Where, as here, the requesting spouse satisfies the thresh-

old conditions, Revenue Procedure 2003-61 sets forth the follow-

ing factors that are to be considered in determining whether that

spouse is entitled to relief under section 6015(f):5   (1) Whether

the requesting spouse is separated or divorced from the

nonrequesting spouse (marital status factor); (2) whether the

requesting spouse would suffer economic hardship if not granted

relief (economic hardship factor); (3) whether the requesting



     5
      Other factors that may be considered under Revenue Proce-
dure 2003-61 are (1) whether the nonrequesting spouse abused the
requesting spouse (abuse factor) and (2) whether the requesting
spouse was in poor mental or physical health (mental or physical
health factor) when he or she signed the tax return (return) or
when he or she requested relief. Rev. Proc. 2003-61, sec.
4.03(2)(b), 2003-2 C.B. 296, 299. In the event that (1) the
nonrequesting spouse abused the requesting spouse or (2) the
requesting spouse was in poor mental or physical health when he
or she signed the return or when he or she requested relief, the
abuse factor or the mental or physical health factor, as the case
may be, will be taken into account. Id. However, where, as
here, (1) the nonrequesting spouse did not abuse the requesting
spouse and (2) the requesting spouse was not in poor mental or
physical health when she signed the return or when she requested
relief, those factors are not taken into account. Id.
                              - 14 -

spouse knew or had reason to know of the item giving rise to the

deficiency (knowledge factor); (4) whether the nonrequesting

spouse has a legal obligation to pay the outstanding tax liabil-

ity pursuant to a divorce decree or agreement (legal obligation

factor); (5) whether the requesting spouse received a significant

benefit from the item giving rise to the deficiency (significant

benefit factor); and (6) whether the requesting spouse has made a

good faith effort to comply with the tax laws for the taxable

years following the taxable year to which the request for such

relief relates (compliance factor).    Rev. Proc. 2003-61, sec.

4.03(2)(a), 2003-2 C.B. at 298-299.    In making our determination

under section 6015(f), we shall consider those factors and any

other relevant factors.   No single factor is to be determinative

in any particular case, and all factors are to be considered and

weighed appropriately.

     With respect to the marital status factor, on August 19,

2008, petitioner and Mr. Hardin divorced.

     With respect to the economic hardship factor,6 petitioner


     6
      In determining whether a requesting spouse will suffer
economic hardship, sec. 4.02(1)(c) of Revenue Procedure 2003-61
requires reliance on rules similar to those provided in sec.
301.6343-1(b)(4), Proced. & Admin. Regs. That regulation gener-
ally provides that an individual suffers an economic hardship if
the individual is unable to pay his or her reasonable basic
living expenses. Sec. 301.6343-1(b)(4), Proced. & Admin. Regs.,
provides in pertinent part:


                                                     (continued...)
                             - 15 -

did not present any evidence, and on the record before us we find

that she has failed to carry her burden of, establishing that she

would suffer economic hardship if relief under section 6015(f)

were not granted.

     With respect to the knowledge factor, although petitioner

acknowledges that she knew that Mr. Hardin received unemployment


     6
      (...continued)
          (ii) Information from taxpayer.--In determining a
     reasonable amount for basic living expenses the direc-
     tor will consider any information provided by the
     taxpayer including--

             (A) The taxpayer’s age, employment status and
     history, ability to earn, number of dependents, and
     status as a dependent of someone else;

             (B) The amount reasonably necessary for food,
     clothing, housing (including utilities, home-owner
     insurance, home-owner dues, and the like), medical
     expenses (including health insurance), transportation,
     current tax payments (including federal, state, and
     local), alimony, child support, or other court-ordered
     payments, and expenses necessary to the taxpayer’s
     production of income (such as dues for a trade union or
     professional organization, or child care payments which
     allow the taxpayer to be gainfully employed);

             (C) The cost of living in the geographic area
     in which the taxpayer resides;

             (D) The amount of property exempt from levy
     which is available to pay the taxpayer’s expenses;

             (E) Any extraordinary circumstances such as
     special education expenses, a medical catastrophe, or
     natural disaster; and

             (F) Any other factor that the taxpayer claims
     bears on economic hardship and brings to the attention
     of the director.
                                - 16 -

compensation during 2006, she claims that she is entitled to

relief under section 6015(f) because she did not know that she

and Mr. Hardin were required to include that compensation in

their income for that year.     We reject that claim.   In assessing

the knowledge factor, what is important is that petitioner knew

that Mr. Hardin received unemployment compensation during 2006

and not that she did not know that she and Mr. Hardin were

required to include that compensation in their income for that

year.

     With respect to the legal obligation factor, the divorce

decree does not provide that Mr. Hardin has a legal obligation to

pay any outstanding tax liability that he and petitioner incurred

while married.

     With respect to the significant benefit factor, petitioner

did not receive a benefit beyond normal support from Mr. Hardin’s

unemployment compensation.     Normal support is not a significant

benefit.     Flynn v. Commissioner, 93 T.C. 355, 367 (1989).

        With respect to the compliance factor, petitioner filed a

return for her taxable year 2007.

        Based upon our examination of the entire record before us,

we find that petitioner has failed to carry her burden of estab-

lishing that it would be inequitable to hold her liable for the

deficiency that respondent determined for her taxable year 2006.

On that record, we further find that petitioner has failed to
                             - 17 -

carry her burden of establishing that she is entitled to relief

under section 6015(f).

     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

                                 respondent.
