                        T.C. Memo. 2010-233


                      UNITED STATES TAX COURT



                TIMOTHY S. SCHULTZ, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 19224-07.                Filed October 25, 2010.



     Donald Wills Wallis, for petitioner.

     Anne M. Craig, for respondent.



                        MEMORANDUM OPINION


     NIMS, Judge:   Petitioner seeks review of respondent’s

determination that he is not entitled to relief from joint and

several liability under section 6015 for his 1997, 1998, 1999,

2003, and 2004 income tax liabilities.    Unless otherwise
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indicated, all section references are to the Internal Revenue

Code, and all Rule references are to the Tax Court Rules of

Practice and Procedure.

       On brief petitioner abandoned his argument that respondent

erred in denying him relief under the provisions of section

6015(b) and (c).    The sole issue remaining for decision is

whether petitioner is entitled to relief under section 6015(f).

                             Background

       This case was submitted fully stipulated pursuant to Rule

122.    The stipulations of the parties, with accompanying

exhibits, are incorporated herein by this reference.    Petitioner

resided in Florida at the time his petition was filed, and he was

married to Susan Belle Schultz (Susan or former spouse) in 1987.

During the years in issue petitioner worked in the construction

industry.    Susan worked as a cardiology technician in 1997 and as

a medical transcriber during 2003 and 2004.

       Throughout their marriage Susan controlled family finances

and forced petitioner to give her his paychecks, denied him

access to their bank account, and was responsible for paying

their expenses.    Susan kept their mail from petitioner and

allowed him to see their Federal tax returns (which were prepared

by her mother) only when she presented them to him for his

signature.
                                 -3-

     Because of Susan’s dominance over petitioner, he was largely

unaware of their financial situation.    He did not know that Susan

had not timely filed their joint returns for 1997, 1998, 1999,

and 2003; she filed the returns for those years (and for 2004)

during the first 2 months of 2005.1    Until an Internal Revenue

Service agent visited their home in the spring of 2005,

petitioner was also unaware that Susan had not fully paid their

tax liabilities.    Whenever petitioner attempted to find out more

about the couple’s financial situation, Susan would verbally or

physically attack him.

     Susan often abused petitioner during the course of their

marriage, and he was injured on several occasions necessitating

notifying the police.    One altercation resulted in Susan’s

arrest.   Susan moved out of the family home during September

2005, and petitioner subsequently obtained a personal protection

order against her.   Susan was served with divorce papers on

October 19, 2005.

     On July 19, 2006, petitioner filed a Form 8857, Request for

Innocent Spouse Relief (And Separation of Liability and Equitable

Relief), seeking relief under section 6015(b), (c), and (f) from




     1
      The 2003 return was not signed by either spouse.
                                -4-

joint and several liability for his 1997, 1998, 1999, 2003, and

2004 tax years.2   At that time petitioner’s divorce from Susan

had not been finalized.

     On May 29, 2007, respondent issued a notice of determination

denying petitioner relief under section 6015.    On August 27,

2007, petitioner petitioned this Court seeking review of

respondent’s determination to deny him relief.

                            Discussion

     In general, a spouse who files a joint Federal income tax

return is jointly and severally liable for the entire income tax

liability.   Sec. 6013(d)(3); sec. 1.6013-4(b), Income Tax Regs.

     A spouse may be relieved from joint and several liability

under section 6015(f) if, taking into account all the facts and

circumstances, it would be inequitable to hold him liable for any

unpaid tax or deficiency.   The Commissioner has published revenue

procedures listing the factors normally considered in determining

whether section 6015(f) relief should be granted.    See Rev. Proc.

2003-61, 2003-2 C.B. 296, superseding Rev. Proc. 2000-15, 2000-1

C.B. 447.

     This Court has jurisdiction to conduct a de novo review of

the Commissioner’s denial of section 6015(f) relief.    See sec.

6015(e); Porter v. Commissioner, 132 T.C. 203 (2009).



     2
      The liabilities in question (apart from that for 2003, a
year for which no valid return was filed) are not deficiencies in
tax but amounts reported on the returns and unpaid.
                                -5-

A.   Threshold Conditions for Granting Relief

      To be eligible for section 6015(f) relief, the requesting

spouse must satisfy the following threshold conditions:   (i) He

filed a joint return for the taxable year for which he seeks

relief; (ii) relief is not available to him under section 6015(b)

or (c); (iii) no assets were transferred between the spouses as

part of a fraudulent scheme by the spouses; (iv) the

nonrequesting spouse did not transfer disqualified assets to him;

(v) he did not file or fail to file the returns with fraudulent

intent; and (vi) absent enumerated exceptions, the income tax

liability from which he seeks relief is attributable to an item

of the nonrequesting spouse.   Rev. Proc. 2003-61, sec. 4.01,

2003-2 C.B. at 297-298.

      Petitioner is ineligible for relief from the 2003 tax

liability because he did not file a valid joint return for that

year.   See Raymond v. Commissioner, 119 T.C. 191, 195-197 (2002).

For 2003 the return submitted to respondent was not signed by him

or his former spouse.   See Olpin v. Commissioner, 270 F.3d 1297,

1300 (10th Cir. 2001), affg. T.C. Memo. 1999-426.

      Likewise, unless an exception applies, petitioner is

ineligible for relief from most of his 1997, 1998, 1999, and 2004

tax liabilities because he earned most of the couple’s income
                                -6-

reported for those years.   The record reveals that petitioner’s

former spouse was responsible for $31,529.90 of the couple’s

$207,684 of income reported for those years.

     Petitioner contends that he is eligible for relief from all

the tax liabilities for those years because he satisfies two of

the enumerated exceptions to the threshold condition pertaining

to attribution.   First, he claims that Susan misappropriated

funds intended for payment of their tax liabilities.   See Rev.

Proc. 2003-61, sec. 4.01(7)(c), 2003-2 C.B. at 297.    Petitioner

contends that Susan used the money to pay off her individual

debts.   Considering the fact that he has not identified when, in

what amount, or from what source any funds were earmarked for

payment of tax and that Susan denied him access to their

financial statements and mail, we find his claim to be nothing

more than speculation.

     Second, petitioner claims that he signed the returns with

“no questions asked” because of the abuse he suffered from Susan.

If the requesting spouse establishes that he was the victim of

abuse before the return was signed and that he consequently did

not challenge the treatment of any items on the return for fear

of retaliation, the Internal Revenue Service will consider

granting equitable relief even though the underpayment is

attributable to an item of the requesting spouse.   Rev. Proc.

2003-61, sec. 4.01(7)(d), 2003-2 C.B. at 298.   While petitioner
                                -7-

did suffer verbal and physical abuse at the hands of his former

spouse, he does not claim that he would have challenged the

treatment of any items on the returns.   In fact, petitioner has

no grounds to challenge the treatment of the income attributed to

him because the Forms W-2, Wage and Tax Statement, attached to

the returns show that he earned the income from his construction

industry employment.

      Accordingly, we find that petitioner has met the threshold

criteria for relief only as to the taxes attributable to the

following amounts of income:   $7,423.40 in 1997, $717.50 in 1998,

$1,466 in 1999, and $21,923 in 2004.

B.   Circumstances Under Which Relief Is Ordinarily Granted

      Where the threshold conditions have been met, the

Commissioner will ordinarily grant relief from an underpayment of

tax if the requesting spouse meets the requirements set forth

under Rev. Proc. 2003-61, sec. 4.02, 2003-2 C.B. at 298.   To

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

requesting spouse must as of the date of the request for relief:

(1) No longer be married to, be legally separated from, or not

have been a member of the same household as the nonrequesting

spouse at any time during the 12-month period ending on the date

of the request for relief; (2) have had no knowledge or reason to
                                 -8-

know when he signed the return that the nonrequesting spouse

would not pay the tax liability; and (3) suffer economic hardship

if relief is not granted.

      When petitioner filed his request for relief on July 19,

2006, he was still married to and was not legally separated from

his former spouse.    The couple had also been members of the same

household in the preceding 12 months because petitioner did not

move out of the marital residence until September 2005.

      A requesting spouse suffers economic hardship if paying the

tax liabilities would prevent him from paying reasonable basic

living expenses.   Sec. 301.6343-1(b)(4)(i), Proced. & Admin.

Regs.; Rev. Proc. 2003-61, sec. 4.02(1)(c), 4.03(2)(a)(ii),

2003-2 C.B. at 298.   Petitioner has not provided any information

as to his monthly income or expenses.   Petitioner has thus failed

to establish that denial of section 6015(f) relief would cause

him economic hardship.

      Accordingly, petitioner is generally not entitled to relief

under criteria set forth in Rev. Proc. 2003-61, sec. 4.02.

C.   Rev. Proc. 2003-61, Sec. 4.03 Factors

      Where a requesting spouse fails to qualify for relief under

Rev. Proc. 2003-61, sec. 4.02, a determination to grant relief

may nevertheless be made under the criteria set forth in Rev.

Proc. 2003-61, sec. 4.03, 2003-2 C.B. at 298-299.   Rev. Proc.

2003-61, sec. 4.03, provides a nonexclusive list of factors the
                                  -9-

IRS will consider in making that determination:    (1) Marital

status; (2) economic hardship; (3) knowledge or reason to know;

(4) nonrequesting spouse’s legal obligation; (5) significant

benefit; (6) good-faith effort to comply with tax laws; (7)

spousal abuse; and (8) mental or physical health.    No single

factor is determinative, and all factors are to be considered and

weighed appropriately.     See Haigh v. Commissioner, T.C. Memo.

2009-140.

     1.   Marital Status

     Under Rev. Proc. 2003-61, sec. 4.03(2)(a)(i), 2003-2 C.B. at

298, consideration is given to whether the requesting spouse is

divorced or separated (whether legally separated or living apart)

from the nonrequesting spouse.

     The marital status factor favors relief because petitioner

and his former spouse began living apart approximately 10 months

before petitioner filed his request for relief.

     2.   Economic Hardship

     As previously discussed, petitioner has not demonstrated

that he would suffer economic hardship if denied relief.    This

factor therefore weighs against relief.

     3.   Knowledge or Reason To Know

     When petitioner signed the returns, he did not know and had

no reason to know that his former spouse would not pay their
                                  -10-

income tax liabilities because he did not discover the nonpayment

of the liabilities until the spring of 2005.    This factor thus

favors relief.

     4.   Nonrequesting Spouse’s Legal Obligation

     This factor is neutral because there is no evidence in the

record that petitioner’s former spouse had a legal obligation to

pay their outstanding income tax liabilities pursuant to a

divorce decree or an agreement.     See Rev. Proc. 2003-61, sec.

4.03(2)(a)(iv), 2003-2 C.B. at 298.

     5.   Significant Benefit

     This factor favors relief because there is no evidence that

petitioner derived any benefit beyond normal support from the

nonpayment of the income tax liabilities.     See Magee v.

Commissioner, T.C. Memo. 2005-263; Rev. Proc. 2003-61, sec.

4.03(2)(a)(v), 2003-2 C.B. at 299.

     6.   Good-Faith Effort To Comply With Income Tax Laws

     Petitioner has not made a good-faith effort to comply with

income tax laws following his 1997, 1998, 1999, and 2004 taxable

years in that he did not file a valid return for 2005.       See Rev.

Proc. 2003-61, sec. 4.03(2)(a)(vi), 2003-2 C.B. at 299.

     Petitioner claims that he was not required to file a return

for 2005 because “he has earned no income of any type since the

years at issue” on account of the injuries caused by his former
                                -11-

spouse’s abuse.   We do not find petitioner’s claim credible

because the record reflects that petitioner was employed by the

Hamilton Hotel in 2005.

     This factor thus weighs against relief.

     7.   Spousal Abuse

     Petitioner was verbally and physically abused by his former

spouse throughout their marriage.      This factor favors relief.

     8.   Mental or Physical Health

     Under Rev. Proc. 2003-61, sec. 4.03(2)(b)(ii), 2003-2 C.B.

at 299, consideration is given to whether the requesting spouse

was in poor mental or physical health on the date he signed the

return or at the time relief was requested.

     Petitioner claims that he is permanently disabled (mentally

and physically) as a result of the physical abuse by his former

spouse.   While petitioner did suffer some physical injury, the

record does not confirm petitioner’s claim that the injury is

permanent.   Moreover, petitioner has not explained how the injury

impaired his ability to meet his Federal tax obligations.      This

factor is therefore neutral.   See Fox v. Commissioner, T.C. Memo.

2006-22 (mental or physical health factor was neutral where the

Court already found the abuse factor favored relief and where the

requesting spouse failed to elaborate on her claim that she

suffered from mental abuse).
                                  -12-

D.   Conclusion

      Of the factors listed in Rev. Proc. 2003-61, sec. 4.03, four

favor relief (marital status, lack of knowledge or reason to

know, lack of significant benefit, and spousal abuse), two weigh

against relief (lack of economic hardship and lack of good-faith

effort to comply with tax laws), and two are neutral

(nonrequesting spouse’s legal obligation and mental or physical

health).   After considering and weighing all the factors, we find

it would be inequitable to hold petitioner liable for the

portions of his 1997, 1998, 1999, and 2004 tax liabilities which

were attributable to income earned by his former spouse.

      To reflect the foregoing,


                                              Decision will be entered

                                         under Rule 155.
