                  T.C. Summary Opinion 2004-30



                      UNITED STATES TAX COURT



              JOHN WILLIAM HOLLIS, Petitioner, AND
                  TAMERA EVERETT, Intervenor v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18027-02S.           Filed March 15, 2004.



     John William Hollis, pro se.

     Tamera Everett, pro se.

     Susan M. Pinner, for respondent.



     COLVIN, Judge:   This case was heard pursuant to the

provisions of section 74631 of the Internal Revenue Code in

effect at the time the petition was filed.   The decision to be



     1
       Subsequent section references are to the Internal Revenue
Code as amended, and Rule references are to the Tax Court Rules
of Practice and Procedure.
                               - 2 -

entered is not reviewable by any court, and this opinion should

not be cited as authority.

     Respondent determined that petitioner is not entitled to

relief from joint liability for tax under section 6015(b), (c),

or (f) for 1999.   Petitioner filed a petition under section

6015(e)(1) seeking review of respondent’s determination.

Petitioner’s former wife (intervenor) filed a notice of

intervention under Rule 325(b) and opposes such relief.

     Petitioner prepared and petitioner and intervenor signed and

filed a joint return for 1999 in which they correctly reported

the amount of tax but overstated their Federal income tax

withholding by $2,000.   Respondent did not immediately discover

the error and issued a $1,491 refund to petitioner and intervenor

for 1999.   Petitioner alone benefited from the refund.

     The sole issue for decision is whether, under section

6015(b), (c), or (f), petitioner is entitled to relief from

repaying the erroneous refund for 1999.2   We hold that he is not.




     2
       We derive this statement of petitioner’s position from the
petition. Petitioner also claims generally that he should be
relieved from joint and several liability for 1999. However, he
has presented no argument for relief from liability other than
for the liability arising from the erroneous refund for 1999.
                               - 3 -

                            Background

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

A.   Petitioner

     Petitioner resided in Houston, Texas, when the petition was

filed.   Petitioner is a mechanical design engineer, and

intervenor is a registered nurse.   Petitioner and intervenor have

two sons who were 18 years and 15 years old in 1999.

     At the beginning of 1999, petitioner and intervenor lived in

Midland, Texas.   Intervenor moved from the family home to an

apartment in Midland on February 5, 1999.   She moved to Dallas,

Texas, around July 1999.

B.   Petitioner’s 1999 Return and Refund

     In 1999, petitioner had wages of $45,097.18, of which

$6,202.71 was withheld for Federal income tax, and intervenor had

wages of $53,386.86, of which $9,669.36 was withheld for Federal

income tax.

     In the spring of 2000, petitioner prepared a joint Federal

income tax return for 1999 for himself and intervenor.     When he

prepared the return, petitioner had his Form W-2, Wage and Tax

Statement, for 1999, and three Forms W-2 from hospitals in which

intervenor had worked in 1999 that she had sent him.3    Petitioner




     3
       We discuss petitioner’s contrary contention below at
paragraph D-2.
                                - 4 -

signed the joint tax return for 1999 and mailed it to intervenor

with the four Forms W-2.    Intervenor signed the return.

     Petitioner and intervenor correctly reported their adjusted

gross income of $98,484.04 on their 1999 joint return, and they

attached all four of their Forms W-2 for 1999.    Those Forms W-2

show that Federal income tax totaling $15,872.07 had been

withheld from petitioner and intervenor in 1999.    However,

petitioner and intervenor reported on their 1999 return that

$17,872.07 had been withheld, and that they were due a refund of

$1,211.07.    They asked that the refund be directly deposited in

petitioner’s bank account.    Petitioner and intervenor had agreed

that petitioner would receive two-thirds of the refund and

intervenor would receive one-third.

     Petitioner and intervenor received a $1,491 refund for

1999.4    The refund was deposited in petitioner’s bank account

around May 20, 2000.    Intervenor received no benefit from the

refund.    Respondent later discovered that petitioner and

intervenor had overstated their withholding and notified them

that they owed income tax and interest for 1999.

C.   Petitioner’s Request for Relief From Joint Liability

     On September 10, 2001, petitioner filed Form 8857, Request

for Innocent Spouse Relief, seeking relief from joint liability


     4
        The parties do not explain the difference in the amount
of the refund claimed for 1999 and the amount that respondent
paid.
                                 - 5 -

for 1999.   In his request for relief, petitioner said that he had

not seen intervenor’s Forms W-2 for 1999.

D.   Petitioner’s and Intervenor’s Divorce Decree

     Petitioner and intervenor were divorced on October 19, 2001.

The divorce decree orders:

          IT IS ORDERED AND DECREED that the Petitioner
     [Tamera Everett] shall pay and maintain the following
     debts and obligations and shall indemnify and hold
     Respondent [John Hollis] harmless and Respondent’s
     property harmless from any failure to so discharge such
     debts and obligations:

                     *   *   *    *      *   *   *

          3. Any and all income tax due and owing by
     Petitioner for the years 1999 through 2001, and any and
     all income tax due and owing by the Petitioner as a
     result of Petitioner under reporting her earning for
     the year 1999. [Emphasis added.]

Intervenor’s divorce attorney wrote by hand everything underlined

in paragraph 3 in the presence of petitioner’s divorce attorney

and the judge presiding over the divorce.

     The divorce decree also orders:

          IT IS ORDERED AND DECREED that Respondent [John
     Hollis] shall pay the following debts and obligations
     and shall indemnify and hold Petitioner [Tamera
     Everett] harmless and Petitioner’s property harmless
     from any failure to so discharge such debts and
     obligations:

                     *   *   *    *      *   *   *

          3. Any and all income tax due and owing by
     Respondent for the years 1999 through 2001.

     On August 30, 2002, respondent issued a notice of

determination to petitioner denying relief under section 6015.
                               - 6 -

In the notice of determination, respondent estimated that

petitioner and intervenor owed $2,700 for 1999 (including

penalties and interest) as of September 30, 2002.

                            Discussion

A.   Contentions of the Parties

     Petitioner contends that intervenor gave him incorrect

withholding information that caused the erroneous refund and

underpayment of tax for 1999, and that, under section 6015(b),

(c), and (f), he should not be required to repay the erroneous

refund for 1999.

     Petitioner bears the burden of proving that he is entitled

to relief from joint and several liability under section 6015.

Rule 142(a)(1).5

B.   Whether Petitioner Is Entitled to Relief From Joint
     Liability Under Section 6015(b)

     Petitioner contends that he is entitled to relief from joint

liability under section 6015(b).   We disagree.   Relief from joint

liability under section 6015(b) is available only if there is an

“understatement” of tax.   Sec. 6015(b)(1)(B) (flush language);

Washington v. Commissioner, 120 T.C. 137, 146 (2003).    Generally,

an understatement is the amount of tax required to be shown on a

return less the amount of tax actually shown on the return.



     5
       Petitioner bears the burden of proof because he does not
contend and has offered no evidence that the burden of proof
shifts to respondent under sec. 7491(a).
                               - 7 -

Secs. 6015(b)(3), 6662(d)(2)(A); Washington v. Commissioner,

supra at 146 n.5.   In this case, there is no understatement of

tax because the amount of tax required to be shown on the return

is the amount shown on the return.     Thus, petitioner is not

entitled to relief under section 6015(b).

C.   Whether Petitioner Is Entitled to Relief From Joint
     Liability Under Section 6015(c)

     Petitioner contends that he is entitled to relief from joint

liability under section 6015(c).   We disagree.    Section 6015(c)

provides relief from a tax liability resulting from a deficiency

on a joint return for taxpayers who are divorced, legally

separated, or otherwise living apart.     There is no deficiency in

this case because the amount of tax required to be shown on the

return is the amount of tax shown on the return.     See sec.

6211(a).   Thus, petitioner is not entitled to relief from joint

liability under section 6015(c).   See Washington v. Commissioner,

supra at 147.

D.   Whether Petitioner Is Entitled to Relief From Joint
     Liability Under Section 6015(f)

     1.    Relief Under Section 6015(f)

     Section 6015(e) gives this Court jurisdiction to determine

whether a taxpayer is entitled to relief from joint liability

under section 6015.   As a result, a taxpayer is entitled to

relief from joint liability under section 6015(f) if the Court

determines that, taking into account all the facts and
                                - 8 -

circumstances, it is inequitable to hold the taxpayer liable for

any unpaid tax or any deficiency and relief is not available

under section 6015(b) or (c).    The Court reviews the

Commissioner’s denial of relief after a trial de novo under an

abuse of discretion standard.    Ewing v. Commissioner, 122 T.C.

___ (2004).

     Petitioner contends that he should be relieved from joint

liability under section 6015(f), and thus he should not be

required to repay the refund for 1999.    We disagree.

     2.   Factors Listed in Rev. Proc. 2000-15

     The Commissioner announced a list of factors in Rev. Proc.

2000-15, sec. 4.03, 2000-1 C.B. 447, 448,6 that the Commissioner

will consider in determining whether to grant equitable relief

under section 6015(f).

     Rev. Proc. 2000-15, sec. 4.03(1), lists the following two

facts, which if true, the Commissioner weighs in favor of

granting relief:

     1.   The taxpayer is separated or divorced from the

nonrequesting spouse.    Petitioner and intervenor are divorced,

and so this factor favors petitioner.



     6
       Rev. Proc. 2003-61, 2003-32 I.R.B. 296, superseded Rev.
Proc. 2000-15, 2000-1 C.B. 447, for requests for relief under
sec. 6015(f) pending on Nov. 1, 2003, for which no preliminary
determination letter had been issued as of Nov. 1, 2003, and for
requests for relief filed on or after Nov. 1, 2003. Thus, Rev.
Proc. 2003-61, supra, does not apply in the instant case.
                                - 9 -

     2.   The taxpayer was abused by his or her spouse.

Petitioner claims that he suffered mental abuse because

intervenor abandoned him and their children and because his

credit was ruined after he filed for bankruptcy.   Petitioner’s

allegation of mental abuse is not persuasive.

     Rev. Proc. 2000-15, sec. 4.03(2), 2000-1 C.B. at 449, lists

the following two facts, which if true, the Commissioner weighs

against granting relief:

     1.   The taxpayer received significant benefit from the

unpaid liability or the item giving rise to the deficiency.7

Petitioner received the refund, and so this factor favors

respondent.

     2.   The taxpayer has not made a good faith effort to comply

with Federal income tax laws in the tax years following the tax

year to which the request for relief relates.   Respondent

concedes that petitioner has complied with the tax law in years

after 1999.   Rev. Proc. 2000-15, supra, lists tax compliance as a

factor which the Commissioner will consider only against granting

relief.   Thus, under Rev. Proc. 2000-15, supra, the tax

compliance factor is neutral.



     7
       On the basis of caselaw deciding whether it was equitable
to relieve a taxpayer from joint liability under former sec.
6013(e)(1)(D), we consider the fact that a taxpayer did not
significantly benefit from the unpaid liability or item giving
rise to the deficiency as a factor in favor of granting relief to
that taxpayer. Ewing v. Commissioner, 122 T.C. ___ (2004).
                               - 10 -

     Rev. Proc. 2000-15, sec. 4.03(1) and (2), lists the

following four facts which, if true, the Commissioner weighs in

favor of granting relief, and if not true, the Commissioner

weighs against granting relief:

     1.   The taxpayer would suffer economic hardship if relief is

denied.   Petitioner claims that he will suffer economic hardship

if relief is denied.   However, he offered no evidence to show

that he would suffer hardship if relief were denied, and his

claim is not plausible.   We conclude that this factor favors

respondent.

     2.   The liability for which relief is sought is attributable

to the nonrequesting spouse.   Petitioner claims that intervenor

gave him incorrect withholding amounts.   However, even though the

record contains conflicting evidence, we are more persuaded by

intervenor’s testimony that intervenor had sent to petitioner her

three Forms W-2 for 1999.8   Thus, we conclude that the

computational error was petitioner’s.

     3.   In a case (such as this case) in which a liability was

properly reported but not paid, the taxpayer did not know and had



     8
       Petitioner disputes this fact. However, intervenor’s
testimony on this point was very specific and consistent.
Petitioner first testified that intervenor had given him
erroneous figures and had not given him her Forms W-2, but he
later testified that he did not remember. We find intervenor’s
testimony to be more credible and have made factual findings
accordingly.
                              - 11 -

no reason to know that the liability would not be paid.    Neither

petitioner nor intervenor knew they were not entitled to a refund

for 1999 until they received notice from respondent.    Despite the

conflict in the evidence, it appears that petitioner had the four

Forms W-2 that were filed with the return, and so he had reason

to know that the amount reported withheld was in error.    We

conclude that petitioner had reason to know of the underpayment,

and that this factor favors respondent.

     4.   The nonrequesting spouse has a legal obligation pursuant

to a divorce decree or agreement to pay the outstanding liability

(weighs against relief only if the requesting spouse has the

obligation).   Petitioner contends that the handwritten portion of

the divorce decree establishes that intervenor is obligated to

repay the erroneous refund.   We disagree.   The handwritten

portion of the divorce decree states that intervenor is liable

for income tax that she owed “as a result of * * * [intervenor]

under reporting her earning for the year 1999.”    That clause has

no effect here because nothing in the record suggests petitioner

and intervenor did not fully report intervenor’s 1999 income.

     We conclude that this factor is neutral.

     Other than marital status, all factors listed in Rev. Proc.

2000-15, supra, weigh against relief or are neutral.
                              - 12 -

     3.   Other Facts and Circumstances

     Section 6015(f) provides, inter alia, that, taking into

account all of the facts and circumstances, the Commissioner may

relieve an individual of joint liability for tax.   Rev. Proc.

2000-15, sec. 4.03, states:

     No single factor will be determinative of 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.

     No matter who made the error on their return (petitioner or

intervenor), respondent concedes that the error was inadvertent.

We do not believe that an underpayment resulting from an

inadvertent computational error is an appropriate case for relief

from joint liability under section 6015(f).

     4.   Conclusion

     Considering all the facts and circumstances, we hold that it

is not inequitable to hold petitioner liable for the unpaid tax

(i.e., resulting from the erroneous withholding amount and the

resulting erroneous refund) for 1999.   We determine that

respondent’s denial of relief under section 6015(f) was not an

abuse of discretion and that, on the basis of all the facts and

circumstances, it would not be inequitable to hold petitioner

liable for the underpayment of tax for 1999.


                                               Decision will be

                                          entered for respondent.
