                     T.C. Memo. 2011-8



                UNITED STATES TAX COURT



             SUZANNE BLAND, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 868-09.                 Filed January 11, 2011.



     P filed joint Federal income tax returns with her
husband H for the 2000 and 2002 taxable years.
Following H’s death, P seeks relief from joint and
several liability under sec. 6015(f), I.R.C., with
respect to the 2000 and 2002 tax liabilities.

     Held: P is not entitled to relief from joint and
several liability pursuant to sec. 6015(f), I.R.C.,
with respect to her 2000 and 2002 taxable years.



Suzanne Bland, pro se.

Sarah A. Herson, for respondent.
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             MEMORANDUM FINDINGS OF FACT AND OPINION


     WHERRY, Judge:     This case arises from a petition for

judicial review of respondent’s determination denying relief from

joint and several liability under section 6015 for the taxable

years 2000 and 2002.1    The issue for decision is whether

petitioner is entitled to relief from joint and several liability

under section 6015(f) for the taxable years 2000 and 2002.

                           FINDINGS OF FACT

     The parties have stipulated some of the facts.    The

stipulations of the parties, with accompanying exhibits, are

incorporated herein by this reference.    At the time she filed her

petition, petitioner resided in California.

     During the taxable years at issue petitioner was married to

Matthew D. Bland (Mr. Bland).    Petitioner and Mr. Bland signed

and timely filed a joint Form 1040, U.S. Individual Income Tax

Return (joint income tax return), for each of the 2000 and 2002

tax years.

     On the 2000 joint income tax return, petitioner and Mr.

Bland reported a tax liabilty of $9,972, withholding credits of

$8,074, and a total tax due of $1,898.    However, no payments



     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.
The parties have stipulated that petitioner is not entitled to
any relief under sec. 6015(b) or (c).
                                - 3 -

accompanied the filing of the 2000 joint income tax return.

Because of mathematical errors on the 2000 joint income tax

return, respondent recalculated the total tax liability as

$10,765, with total tax due of $2,691.   On the 2002 joint income

tax return, petitioner and Mr. Bland reported a tax liability of

$3,874, withholding credits of $3,271, and a total tax due of

$603.   Again, no payments accompanied the filing of petitioner’s

2002 joint income tax return.

     Respondent sent a joint Final Notice of Intent to Levy and

Notice of Your Right to a Hearing (CDP notice) to petitioner and

Mr. Bland at their last known address by certified mail on

November 8, 2002, for the taxable year 2000.   The certified mail

return receipt which accompanied the CDP notice was signed and

returned to respondent on November 18, 2002.   Separate CDP

notices were sent to petitioner and Mr. Bland at their last known

address by certified mail, return receipt requested, on November

11, 2004, for the taxable year 2002.    The certified mail return

receipts which accompanied the CDP notices were signed and

returned to respondent separately on November 24 and 29, 2004.

     At the time petitioner signed the 2000 and 2002 joint income

tax returns, she and Mr. Bland were having financial

difficulties.   Although petitioner was aware that taxes were owed

to the Internal Revenue Service (IRS) during the taxable years at
                               - 4 -

issue, she believed that Mr. Bland had remitted payment upon

submitting the joint income tax returns.

     On October 1, 2006, Mr. Bland passed away.

     On or about April 25, 2008, petitioner filed Form 8857,

Request for Innocent Spouse Relief, requesting relief with

respect to the 2000, 2002, and 2004 tax years.    Respondent’s

Covington, Kentucky, collection office initially denied

petitioner’s request for innocent spouse relief for the 2000 and

2002 tax years on May 8, 2008, on the basis that her request was

not timely.   On June 3, 2008, petitioner responded with a Form

12509, Statement of Disagreement, requesting that respondent

reconsider the denial at respondent’s Appeals Office (Appeals).

Her reasons for the continued dispute paralleled those alluded to

in her Form 8857:

     I was under the impression that refunds due to us were
     used to pay for taxes we owed. I did not do any of our
     tax returns and was not aware of the amounts owed to
     the IRS. I have always worked and paid my portion of
     the taxes. * * * It would be a definite hardship for me
     to maintain a home for myself & teenage daughter
     without any relief from the taxes owed. I barely kept
     my home due to my husband’s inability to work the last
     year of his life. Due to my adult son paying my
     utilities today I have been able to survive the last
     few years. I was not aware of the tax deficiency we
     owed.

     Petitioner received the requested reconsideration of her

claim by Appeals.   Appeals’ case activity records show that Joan

C. Weiss reviewed petitioner’s case and spoke with petitioner by

telephone on one occasion to explain her rights to her.    On
                                - 5 -

September 18, 2008, respondent sent to petitioner a Final Appeals

Determination denying her request for innocent spouse relief for

tax years 2000 and 2002.    Petitioner on January 9, 2009, filed a

timely petition with this Court contesting the adverse

determination.

                               OPINION

     In general, married taxpayers may elect to file a joint

income tax return.   Sec. 6013(a).   After making the election,

each spouse generally is jointly and severally liable for the

entire Federal income tax liability for that year, whether as

reported on the joint income tax return or subsequently

determined to be due.    Sec. 6013(d)(3); see sec. 1.6013-4(b),

Income Tax Regs.   A spouse or former spouse may petition the

Commissioner for relief from joint and several liability in

certain circumstances.    See sec. 6015(a).

     The Commissioner may relieve a spouse or former spouse from

joint and several liability if, taking into account all the facts

and circumstances, it would be inequitable to hold the taxpayer

liable for any unpaid tax or deficiency.      Sec. 6015(f)(1).

     We begin with the standard of review and the burden of

proof.   Respondent denied petitioner’s request for relief on the

ground that petitioner had filed her request more than 2 years

after respondent’s first collection activity against her

commenced for the 2000 and 2002 tax years.      Since this fact
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violated one of the seven threshold conditions for granting

relief, discussed below, respondent urges us to stop our inquiry

here and find against petitioner.   We decline to do so since we

have previously held that the 2-year limitations period of

section 1.6015-5(b)(1), Income Tax Regs., is invalid with respect

to claims for relief under section 6015(f).2

     In the alternative, respondent argues that we should review

the case for abuse of discretion.   However, we have held that the

applicable standard of review is de novo.   Porter v.

Commissioner, 132 T.C. 203, 210 (2009).   Petitioner bears the

burden of proving that she is entitled to relief under section

6015(f).   See Rule 142(a).

     The Commissioner has outlined procedures for determining

whether a requesting spouse qualifies for equitable relief under

section 6015(f).   See Rev. Proc. 2003-61, 2003-2 C.B. 296.   We




     2
      This Court has held that the 2-year limitations period
prescribed by sec. 1.6015-5(b)(1), Income Tax Regs., is invalid
with respect to claims for relief under sec. 6015(f). Hall v.
Commissioner, 135 T.C.   ,    (2010) (slip op. at 5); Lantz v.
Commissioner, 132 T.C. 131 (2009), revd. 607 F.3d 479 (7th Cir.
2010); cf. Golsen v. Commissioner, 54 T.C. 742, 756-757 (1970),
affd. on other issues 445 F.2d 985 (10th Cir. 1971). As
petitioner’s case is appealable to the Court of Appeals for the
Ninth Circuit, we follow this Court’s precedent articulated in
Lantz and Hall.
                               - 7 -

now analyze the facts under these procedures to determine whether

petitioner qualifies for equitable relief.

I.   Threshold Conditions

      Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297-298, sets

forth seven threshold conditions that must be satisfied before

the Commissioner will consider a request for equitable relief

under section 6015(f), as follows:     (i) The requesting spouse

filed a joint income tax return for the taxable year for which he

or she seeks relief; (ii) relief is not available to the

requesting spouse under section 6015(b) or (c); (iii) the

requesting spouse applies for relief no later than 2 years after

the date of the Commissioner’s first collection activity after

July 22, 1998, with respect to the requesting spouse;3 (iv) no

assets were transferred between the spouses as part of a

fraudulent scheme by the spouses; (v) the nonrequesting spouse

did not transfer disqualified assets to the requesting spouse;

(vi) the requesting spouse did not file or fail to file the

return with fraudulent intent; and (vii) the Federal 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 income tax return.     The record

establishes that except for the 2-year filing limitation, see




      3
       See supra note 2.
                                 - 8 -

supra note 2, petitioner satisfies the threshold conditions of

Rev. Proc. 2003-61, sec. 4.01.

II.   Safe Harbor Conditions

      If the threshold conditions are met, the Commissioner

ordinarily will grant equitable relief under section 6015(f) with

respect to an underpayment of income tax reported on a joint

Federal income tax return, provided the following three safe

harbor conditions are satisfied:    (i) On the date of the request

for relief, the requesting spouse is no longer married to, or is

legally separated from, the nonrequesting spouse; (ii) on the

date the requesting spouse signed the joint income tax return,

the requesting spouse did not know, and had no reason to know,

that the nonrequesting spouse would not pay the tax liability;

and (iii) the requesting spouse will suffer economic hardship if

the Commissioner does not grant relief.    Id. sec. 4.02, 2003-2

C.B. at 298.

      Respondent contends that petitioner has not established that

she meets any of the three safe harbor requirements.   The Court

disagrees with respondent and finds that petitioner satisfies the

first condition, as at the time petitioner requested relief, Mr.

Bland was deceased.   We view that circumstance, with respect to

petitioner, as tantamount to her no longer being married.     See

Rosenthal v. Commissioner, T.C. Memo. 2004-89.
                                - 9 -

       With regard to the second criterion, petitioner has admitted

that she and Mr. Bland were experiencing financial difficulties

when they filed the 2000 and 2002 joint income tax returns and

that she was aware that there were amounts owed to the IRS.        Yet,

she claims that she was under the impression Mr. Bland had taken

care of the amounts owed, either by remitting payment when he

mailed in the joint income tax returns or by applying refunds due

towards the tax liabilities for the years at issue.      However,

petitioner has not established that it was reasonable for her to

rely on Mr. Bland to pay the tax due, especially considering that

she and Mr. Bland were experiencing financial difficulties.

Therefore, the Court finds that this factor has not been met.

       Accordingly, because petitioner does not meet all the

requirements of the safe harbor, we need not address the third

condition in order to conclude that petitioner does not qualify

for relief under Rev. Proc. 2003-61, sec. 4.02.

III.    Facts and Circumstances Test

       A requesting spouse such as petitioner, who satisfies the

threshold conditions but fails to satisfy the safe harbor

conditions under Rev. Proc. 2003-61, sec. 4.02, is nevertheless

eligible for relief under 6015(f) if, taking into account all the

facts and circumstances, it is inequitable to hold the requesting

spouse liable for an underpayment.      Rev. Proc. 2003-61, sec.

4.03, 2003-2 C.B. at 298-299, lists various factors to be
                                 - 10 -

considered in deciding whether to grant equitable relief under

section 6015(f).     No single factor is determinative, all factors

are to considered and weighed appropriately, and the listing of

factors is not intended to be exhaustive.      Id.     Our analysis of

the relevant factors and circumstances is set forth below.

      A.     Marital Status

      We have already concluded that petitioner was widowed from

Mr. Bland, the nonrequesting spouse, at the time of her request.

This factor weighs in favor of relief.

      B.     Economic Hardship If Relief Were Denied

      The second consideration under Rev. Proc. 2003-61, sec.

4.03, is that the requesting spouse will suffer economic hardship

if relief is not granted.      Economic hardship for these purposes

is defined as the inability to pay reasonable basic living

expenses if the requesting spouse is held liable for the tax

owed.      See sec. 301.6343-1(b)(4), Proced. & Admin. Regs.    The

ability to pay reasonable basic living expenses is determined by

considering among other things the following nonexclusive

factors:      The taxpayer’s age; employment status; ability to earn;

number of dependents; expenses for food, clothing, housing,

medical, and transportation; and any extraordinary circumstances.

Id.

      Respondent computed petitioner’s gross monthly income and

living expenses and concluded that her income exceeded her
                              - 11 -

expenses by $195 per month and that holding her accountable for

the tax owed would not result in economic hardship.    However,

petitioner testified at trial that she now has a car payment to

make that she did not have at the time and lives “on a strict,

strict budget in order to survive month to month” and that she

does not “have the means to pay” the tax liabilities owed.

     The Court appreciates that petitioner’s financial

circumstances are difficult, but she has not presented any

evidence to dispute respondent’s calculations.    She testified at

trial that her car payment causes her monthly expenses to be

greater than what she claimed on her Form 8857 and that she

incurs excessive medical expenses, but she provided no evidence

to substantiate her testimony.   She candidly verified the

accuracy of the expenses listed on her Form 8857 and admitted

that she receives an additional $63 of monthly income.    On the

record before us, petitioner’s actual expenses are not enough for

us to conclude that she would be unable to pay her basic living

expenses if relief were not granted.    Accordingly, this factor

weighs against relief.

     C.   Knowledge or Reason To Know That the Nonrequesting
          Spouse Would Not Pay the Income Tax Liability

     As noted supra, petitioner was aware that she and Mr. Bland

were facing financial difficulties.    Accordingly, we find that

she did have reason to know that Mr. Bland would not pay the 2000
                                - 12 -

and 2002 income tax liabilities and therefore find this factor

weighs against relief.

     D.   Nonrequesting Spouse’s Legal Obligation To Pay the
          Outstanding Liability

     Because petitioner and Mr. Bland remained married until he

died, this factor is neutral.

     E.   Significant Economic Benefit

     A fifth factor is whether the requesting party received a

significant economic benefit from the unpaid income tax

liability.   Appeals in its workpaper determined that petitioner

did not receive a significant economic benefit.     This factor

weighs in favor of relief.

     F.   Subsequent Compliance With Income Tax Laws

      A sixth consideration is whether the requesting spouse made

a good faith effort to comply with Federal income tax laws in

subsequent years.   Appeals determined that petitioner failed to

report self-employment income on the 2004 joint income tax return

and that on the joint return for 2005, she and Mr. Bland reported

a balance due, but made no payments.     Petitioner provided no

evidence to dispute respondent’s determinations.     This factor

weighs against relief.

     G.   Abuse

     A seventh factor is abuse of the requesting spouse.     Abuse

by the nonrequesting spouse favors relief.     The record does not
                               - 13 -

indicate petitioner suffered abuse from Mr. Bland.    This factor

is neutral.

      H.   Poor Health When Signing the Return or Requesting Relief

      The final consideration is whether the requesting spouse was

in poor health when signing the return or requesting relief.     The

record does not indicate that petitioner was in poor health when

she signed the 2000 and 2002 joint income tax returns, and

Appeals determined that petitioner was not in poor physical or

mental health when she signed the returns or at the time she

requested relief.    However, petitioner testified at trial that

she is “diabetic”, takes “seven medications a day”, and sees “a

doctor every two weeks”.    Yet petitioner provided no evidence to

substantiate or corroborate her testimony.    On the record

available, the Court cannot conclude that petitioner’s poor

health weighs in favor of granting her relief.    Therefore, this

factor is neutral.

IV.   Conclusion About Equitable Relief

      As indicated by the foregoing analysis, three factors are

neutral.    Two of the factors--marital status and significant

benefit--favor relief.    Three of the factors--economic

hardship, knowledge or reason to know, and compliance with

Federal income tax laws–-counsel against relief.    After

weighing the testimony and evidence, we conclude that

petitioner is not entitled to equitable relief.    In reaching
                            - 14 -

this conclusion, we take into account that while her standard

of living may be affected, petitioner will not suffer economic

hardship if required to pay the outstanding tax liabilities.

Accordingly, the Court finds that petitioner is not entitled to

relief under section 6015(f).

     The Court has considered all other arguments made by the

parties and, to the extent not specifically addressed herein,

has concluded that they are without merit or are moot.   To

reflect the foregoing,


                                          Decision will be

                                     entered for respondent.
