                           T.C. Memo. 2006-2



                      UNITED STATES TAX COURT



               PHYLLIS J. MERENDINO, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 8265-04.                Filed January 3, 2006.



     C. Page Hamrick III, for petitioner.

     Stephen J. Neubeck, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     GOEKE, Judge:   Petitioner challenges respondent’s April 2004

determination that she is not entitled to equitable relief from

joint and several liability under section 6015(f)1 for



     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.
                                - 2 -

petitioner’s taxable year 1996.    The issue for decision is

whether respondent abused his discretion in denying petitioner

such relief.   We hold that he did not.

                           FINDINGS OF FACT

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

Petitioner resided in Aventura, Florida, when she filed the

petition.   At all material times, petitioner was, and remains,

married to Dr. John Merendino (Dr. Merendino).

Dr. Merendino’s Sale of Business

     In the early 1990s, Dr. Merendino established a business

directed toward providing rehabilitation to elderly disabled

people in nursing homes.    In 1995, while Dr. Merendino was in

negotiations to sell his business, the U.S. Department of Justice

(“Justice Department”) was investigating Medicare payments made

to Dr. Merendino.   The Justice Department learned of the pending

sale and mandated that the sales proceeds be placed in escrow

pending the final resolution of the matter.    On June 12, 1997,

the Justice Department endorsed a settlement agreement

authorizing disbursement of the funds, all of which were applied

to taxes or to settle the civil Medicare case.    Ultimately, Dr.

Merendino did not receive any significant portion of the sale

proceeds in cash because the proceeds were held in escrow.

Petitioner’s Relationship With Dr. Merendino

     Petitioner and Dr. Merendino (the Merendinos) have been
                                - 3 -

living apart since at least 1998.2      Petitioner resided in

Aventura, Florida, while her husband resided in Rockville,

Maryland.    The Merendinos are not legally separated, nor has

either filed for divorce.   In documents petitioner submitted to

respondent with her Form 8857, Request for Innocent Spouse

Relief, petitioner stated that in the 12-month period preceding

the date she filed her request for innocent spouse relief, Dr.

Merendino was present at her Florida residence for New Year’s

week and for an unspecified number of other days.      At the time of

her request for equitable relief, petitioner stated that she

lived with Dr. Merendino during the months of July and August of

1999.    Dr. Merendino stated in an affidavit that he traveled to

Florida during that time in an effort to save his marriage.      The

Merendinos have a son in his forties who is schizophrenic and

requires assisted care and financial support.

Tax Year 1996

     Neither petitioner nor Dr. Merendino, each of whom

individually had taxable income for the year 1996, timely filed a

tax return for 1996.    After respondent received information from

third-party payors of payments made to petitioner in 1996,


     2
      The record is unclear as to exactly when the Merendinos
began living separately. Petitioner testified at trial that she
and Dr. Merendino have been living apart since 1993. However,
petitioner and Dr. Merendino each stated in affidavits that they
have been living apart since 1998. When asked at trial, Dr.
Merendino could not recall exactly how long petitioner has not
resided with him.
                               - 4 -

respondent contacted the Merendinos concerning the filing of a

tax return.   On August 8, 1998, the Merendinos executed Form

2848, Power of Attorney and Declaration of Representative,

appointing Robert D. Grossman, Jr. (Mr. Grossman), and David A.

Carris to be their representatives for the 1996 taxable period.

     In late December 1998, respondent received a Form 1040, U.S.

Individual Income Tax Return, from the Merendinos for the taxable

year 1996 bearing the apparent signatures of both Merendinos, and

reflecting a joint filing status.   On December 22, 1998,

respondent’s Revenue Agent Steven Swartz (Mr. Swartz) received a

telephone call from Mr. Grossman instructing Mr. Swartz not to

process the joint return, as the Merendinos were considering

refiling a return reflecting a filing status of married filing

separate (MFS).   Mr. Grossman confirmed the communication in a

letter dated December 22, 1998.   On January 4, 1999, Mr. Grossman

directed respondent, through Mr. Swartz, to process the received

joint return.   The tax shown on the return in the amount of

$405,860 was unpaid.

     On January 5, 1999, Mr. Swartz called Mr. Grossman to

inquire about the payment of the 1996 liability.   Mr. Grossman

informed Mr. Swartz that the Merendinos would not be sending a

payment on the 1996 liability, but rather would be seeking a

joint offer-in-compromise through respondent’s Baltimore office.

However, in a letter dated February 11, 1999, Mr. Grossman
                                - 5 -

informed Mr. Swartz:    (1) Petitioner had not signed the joint

return; (2) petitioner did not agree to file a joint return; (3)

petitioner would likely file an MFS return; (4) the Merendinos

possessed separate returns that they would like to file; and (5)

respondent should accept the MFS return from petitioner under the

equitable relief provisions of section 6015(f).      Mr. Swartz did

not comply with the request to accept the MFS returns because he

believed the regulations specifically prohibited him from doing

so.3

Petitioner’s Assets and Liabilities

       Petitioner did not provide respondent with any meaningful

financial information during the Appeals process.     However, Mr.

Swartz found that petitioner earned in excess of $200,000 from

stock sales for the years 1996, 1998, 1999, and 2000.     In

addition, petitioner owned property in Florida that she purchased



       3
        Sec. 1.6013-1, Income Tax Regs., provides:

       Sec. 1.6013-1. Joint returns.

            (a) In general. (1) A husband and wife may elect
       to make a joint return under section 6013(a) even
       though one of the spouses has no gross income or
       deductions. For rules for determining whether
       individuals occupy the status of husband and wife for
       purposes of filing a joint return, see paragraph (a) of
       § 1.6013-4. For any taxable year with respect to which
       a joint return has been filed, separate returns shall
       not be made by the spouses after the time for filing
       the return of either has expired. * * *
                               - 6 -

for $450,000, a home in Virginia, and four rental properties in

south Florida.

Petitioner’s Request for Relief Under Section 6015(f)

     Respondent received from petitioner Form 8857, Request for

Innocent Spouse Relief, on July 24, 2000.   In support of

petitioner’s request for innocent spouse relief, the Merendinos

each provided respondent with affidavits in which they stated

that Dr. Merendino signed petitioner’s name to the joint return

without her knowledge or consent.   In November 2003, Dr.

Merendino sent a letter to the Appeals officer providing

additional background.   In that letter, Dr. Merendino stated that

petitioner immediately objected when Dr. Merendino signed her

name and contacted an attorney to file her taxes separately.    Dr.

Merendino also stated in the letter that he had received a notice

of an overpayment of more than $400,000 from the Internal Revenue

Service (IRS), but that those funds were applied to a tax

liability he had other than 1996.

      The Appeals officer, finding that a joint return was filed,

considered relief under section 6015(b) and (c) but determined

petitioner was not eligible since the liability involves an

unpaid balance or an underpayment, and thus relief could only be

considered under section 6015(f).   In making this determination,

the Appeals officer evaluated petitioner’s request under Rev.
                                   - 7 -

Proc. 2000-15, 2000-1 C.B. 447.4      Despite petitioner’s contention

that she did not consent to filing the joint return, the Appeals

officer concluded that petitioner met the seven threshold

requirements of Rev. Proc. 2000-15, sec. 4.01, 2000-1 C.B. at

448.       The Appeals officer then examined whether petitioner

satisfies all three prerequisites for section 6015(f) relief

provided in Rev. Proc. 2000-15, sec. 4.02, and concluded that she

failed to meet the elements because:       (1) Petitioner was still

married to Dr. Merendino and lived with him for some of the

preceding 12 months; (2) petitioner did not adequately

demonstrate that she had no knowledge or reason to know that the

tax liability would not be paid; and (3) petitioner did not

adequately demonstrate that she would suffer economic hardship if

relief were not granted.       The Appeals Office then considered

petitioner’s claim for relief under Rev. Proc. 2000-15, sec.

4.03, 2000-1 C.B. 447, 448.       The Appeals officer determined that

relief should not be granted based on the following factors:        (1)

The Merendinos, though they maintained different residences, were

still married and lived together for part of the 12 months prior



       4
      On Aug. 11, 2003, the Commissioner issued Rev. Proc.
2003-61, 2003-2 C.B. 296, which supersedes Rev. Proc. 2000-15,
2000-1 C.B. 447, effective for requests for relief which were
filed on or after Nov. 1, 2003, and requests for such relief
which were pending on, and for which no preliminary determination
letter has been issued as of, Nov. 1, 2003. Rev. Proc. 2003-61,
supra, does not apply in this case because respondent issued
petitioner a preliminary determination letter on Feb. 5, 2002.
                               - 8 -

to petitioner’s claim for relief; (2) petitioner signed the joint

tax return for the taxable year 1996 showing a balance due; (3)

petitioner was not reasonable in believing that the remaining

balance would be paid out of the proceeds from the sale of Dr.

Merendino’s business; (4) Dr. Merendino never abused petitioner;

(5) there was no legal obligation created under a separation

agreement or a divorce decree for Dr. Merendino to pay the

liability; and (6) considering petitioner’s assets and income

level, petitioner would not suffer economic hardship if relief

was not granted.   Taking all these factors into consideration,

the Appeals officer concluded that there were insufficient

factors in favor of granting relief.

      Petitioner filed a petition with this Court on April 11,

2005, seeking relief from joint and several liability.   At the

time the joint return was filed in 1996, the amount of unpaid tax

was $405,860, as stated previously.    Petitioner asserts that the

amount of the liability allocable to her, as shown by her attempt

to file a separate return, was $28,408.   Petitioner seeks relief

only from the tax that is not attributable to her income.

                             OPINION

I.   Petitioner Signed the Joint Return

      Petitioner originally contended that Dr. Merendino filed the

1996 tax return and forged her signature without her permission.

According to the Merendinos, Dr. Merendino signed and filed the
                                - 9 -

return for himself and petitioner while he was in Maryland and

petitioner was in Florida.    On brief, petitioner has abandoned

her claim that she did not sign the joint return and seeks relief

from joint and several liability under section 6015(f).    We must,

however, note the facts in the record that contradict

petitioner’s initial version because the diminished credibility

of petitioner goes to the merits of the application of section

6015(f).   Petitioner’s initial contention that she did not sign

the joint return and that her husband filed the return in

Maryland is directly contradicted by the postmark on the return

from the town where she lived in Florida.    There is no logical

reason for the return to have been in Florida other than for

petitioner to review and sign it.    Petitioner has not provided

any explanation for this inconsistency.    The record’s direct

contradiction of petitioner’s statements strongly diminishes her

credibility.

     Further, even if petitioner did not actually sign the joint

return, her own testimony demonstrates that she authorized the

filing of the joint return.    Petitioner admitted that when she

called the accountant in Baltimore to give the information on

what she owed, he specifically told her that she and Mr.

Merendino were going to file a joint return, and petitioner did

not object.    Therefore, petitioner’s contention that the return

was filed without her permission is also contradicted by her own

testimony.
                              - 10 -

II.   Section 6015(f)

      We note this case involves an unpaid tax liability for the

year in issue.   Because this case does not involve a deficiency

or understatement, petitioner does not qualify for relief under

section 6015(b) or (c).   See sec. 6015(b)(1) and (c)(1);

Washington v. Commissioner, 120 T.C. 137, 146-147 (2003).

Therefore, our review is limited to section 6015(f), which

permits in certain circumstances relief from joint and several

liability for unpaid taxes.   See Ewing v. Commissioner, 118 T.C.

494, 497 (2002).   Section 6015(f) grants the Commissioner

discretion to grant equitable relief from tax liability to a

spouse if, taking into account all the facts and circumstances,

it is inequitable to hold the spouse liable for any unpaid tax or

any deficiency (or any portion of either), and relief is not

available under section 6015(b) or (c).   In order to prevail, the

taxpayer must demonstrate that the Commissioner abused his

discretion by acting arbitrarily, capriciously, clearly

unlawfully, or without sound basis in fact or law.   See Jonson v.

Commissioner, 118 T.C. 106, 125 (2002), affd. 353 F.3d 1181 (10th

Cir. 2003); Butler v. Commissioner, 114 T.C. 276, 289-290 (2000).

Here, petitioner bears the burden of proving that respondent

abused his discretion in denying her equitable relief under

section 6015(f).   See Rule 142(a); Alt v. Commissioner, 119 T.C.

306, 311 (2002), affd. 101 Fed. Appx. 34 (6th Cir. 2004);

Ogonoski v. Commissioner, T.C. Memo. 2004-52.   We have
                              - 11 -

jurisdiction to determine whether equitable relief is available

to petitioner for underpayment of tax shown on a joint return.

Ewing v. Commissioner, supra at 502.5

     Rev. Proc. 2000-15, sec. 4.01, 2000-1 C.B. 447, 448,

prescribes guidelines or factors that will be considered in

determining whether an individual qualifies for equitable relief

under section 6015(f).   This Court has upheld the use of the

guidelines specified in Rev. Proc. 2000-15, supra, and has

analyzed the factors listed therein, in reviewing the

Commissioner's negative determinations under section 6015(f).

See, e.g., Washington v. Commissioner, supra at 147-152.    Rev.

Proc. 2000-15, sec. 4.01, 2000-1 C.B. 447, 448, lists seven

threshold conditions that must be satisfied before the

Commissioner will consider a request for equitable relief under

section 6015(f).   Respondent concedes that petitioner satisfies

the threshold conditions in this case.   As discussed earlier, we

have found that petitioner did file a joint return.   Therefore,

petitioner meets all the threshold requirements under Rev. Proc.

2000-15, supra.

     Once petitioner has satisfied the threshold requirements,

Rev. Proc. 2000-15, sec. 4.02, 2000-1 C.B. at 448, provides that,

in cases where a liability reported on a joint return is unpaid,

relief under section 6015(f) will ordinarily be granted if three

     5
      Respondent continues to contest our jurisdiction to review
sec. 6015(f) claims in this case.
                               - 12 -

elements are satisfied:    (1) At the time relief is requested, the

requesting spouse is no longer married to or is legally separated

from the nonrequesting spouse, or has not been a member of the

same household as the nonrequesting spouse at any time during the

12-month period ending on the date relief was requested; (2) at

the time the return was signed, the requesting spouse had no

knowledge or reason to know that the tax would not be paid; and

(3) the requesting spouse will suffer economic hardship if relief

is not granted.   Relief under Rev. Proc. 2000-15, sec. 4.02,

supra, is available only to the extent that the unpaid liability

is allocable to the nonrequesting spouse.    We shall now address

each of these factors.

     1.   Marital Status

     Petitioner is still married to Dr. Merendino.   Although they

have no plans to legally separate, they have been living apart

since at least 1998.    However, petitioner admitted that she and

Dr. Merendino lived in the same residence for 2 months during the

12-month period prior to the date that petitioner filed her

request for relief.    Therefore, in light of petitioner’s own

statements, we conclude that the Merendinos failed to satisfy the

12-month period required by Rev. Proc. 2000-15, sec. 4.02.

     2.   Knowledge or Reason To Know

     The relevant knowledge in the case of a reported but unpaid

liability is that the tax would not be paid when the return was
                                - 13 -

signed.    Wiest v. Commissioner, T.C. Memo. 2003-91 (citing Notice

98-61, sec. 3.03(2)(b), 1998-2 C.B. 756, 757); see also Rev.

Proc. 2000-15, sec. 4.03(1)(d), 2000-1 C.B. at 449.     Petitioner

contends that she did not know or did not have reason to know

that the liability would not be paid.     Petitioner asserted in

documentation submitted to the Appeals Office that she expected

the tax liability would be paid out of the sale of Dr.

Merendino’s business and that although a portion of the

outstanding liability was attributable to her, Dr. Merendino had

always paid the tax liabilities in previous years and she

expected him to do so again for the 1996 liability.     At trial,

petitioner testified that she believed the funds to pay the tax

liability would come from the sale of Dr. Merendino’s business

and from the overpayment of $400,000 that Dr. Merendino made for

a previous year.     Petitioner further stated that she relied on

Dr. Merendino to file the return and pay the taxes.

     Petitioner’s reasons for believing that the tax liability

would be paid are not credible.    The return was filed in December

1998.     It was not reasonable for petitioner to rely on the funds

from the sale of Dr. Merendino’s business to pay for the tax

liability by the time the return was filed.     The settlement of

the lawsuits against Dr. Merendino’s business occurred on June
                               - 14 -

12, 1997.   Petitioner admitted to both Mr. Swartz and this Court

that she was aware that Dr. Merendino did not receive any

significant cash proceeds from the sale of the business.

     Petitioner contended at trial that she expected the funds

from the overpayment would pay the 1996 liability.   Dr. Merendino

stated during the Appeals process that he was notified about the

overpayment, but those funds were never available to him.    There

is evidence that Dr. Merendino told petitioner that he had an

overpayment to pay the tax, but there is no evidence of when he

told her or whether petitioner had reason to believe those funds

would be available at the time the return was filed showing the

balance due.   The source of the overpayment was from overpaid

Federal employment taxes of a business which was sold 2 years

earlier.    Further, Dr. Merendino never received a refund from the

alleged overpayment.   We believe that a prudent person would

inquire about the details of the overpayment and when it would be

paid before relying on the existence of an overpayment to pay a

tax liability that was more than $400,000.   In addition, the

Merendinos’ attorney’s own statements near the time the joint

return was filed, indicating that the Merendinos wished to

negotiate a joint offer-in-compromise, diminish the plausibility

of petitioner’s vague testimony regarding the expectation of

receiving the refund from the overpayment.   Given petitioner’s

other misstatements, we do not find the expectation of funds from
                              - 15 -

the overpayment to be a credible basis to show that petitioner

had reason to believe that the tax would be paid.

     The evidence also points to the conclusion that petitioner

actually knew that the liability would not be paid when the

return was filed.   The record demonstrates that petitioner was

extremely concerned about the filing of the 1996 tax return and

had sought the advice of accountants to file a separate return.

The most prominent indicator of petitioner’s knowledge that the

liability would not be paid when the return was filed was her own

attorney’s statement after the joint return was filed.   Acting on

petitioner’s behalf, he informed Mr. Swartz that the Merendinos

were discussing a joint offer-in-compromise arrangement with the

IRS in Baltimore to pay for the joint liability.    Therefore, the

circumstances reveal that petitioner was aware of a large tax

liability due and problems associated with the payment of that

tax when the return was filed in December 1998.    We believe any

testimony of petitioner to the contrary is based upon

misunderstandings as to her knowledge at the time the return was

actually filed.

     3.   Economic Hardship

     Petitioner contends that she will suffer economic hardship

if respondent does not grant relief under section 6015(f).

Petitioner cites her age (she was 65 at the time she requested

relief), her inability to work, her health problems, and the
                               - 16 -

responsibility she has to care for and support her 40-year-old

schizophrenic son.

     Petitioner has not established that she will suffer economic

hardship if relief is not granted.      Respondent repeatedly

requested copies of current income information and current

financial information.   Petitioner failed to provide this

information.   The record demonstrates that petitioner had income

in excess of $200,000 from stock sales for the years 1996, 1998,

1999, and 2000.   Petitioner contends that she sold the stocks in

1996 and 1999 to supplement her living expenses.      However,

petitioner’s unfiled separate tax return reflects income prior to

her stock sales in excess of $242,000.      In addition, at the time

of her request for relief, petitioner owned the property that she

purchased in Florida for $450,000.      Petitioner also jointly owned

a house in Virginia and four rental properties in south Florida.

Further, the fact that petitioner did not provide any financial

information as requested supports a finding that respondent did

not abuse his discretion in concluding petitioner would not

suffer economic hardship.    See Orum v. Commissioner, 123 T.C. 1,

13 (2004), affd. 412 F.3d 819 (7th Cir. 2005).      Thus, petitioner

has failed to satisfy each of the three factors under Rev. Proc.

2000-15, sec. 4.02, and therefore does not qualify for equitable

relief under that section.

     Where relief is not available under Rev. Proc. 2000-15, sec.
                              - 17 -

4.02, then Rev. Proc. 2000-15, sec. 4.03, 2000-1 C.B. 447, 448-

449, sets forth guidelines or factors that the Commissioner will

consider in deciding claims for equitable relief under section

6015(f).   Rev. Proc. 2000-15, sec. 4.03(1), 2000-1 C.B. at 448-

449, sets forth the following positive factors which weigh in

favor of granting equitable relief under section 6015(f):

          (a) Marital status. The requesting spouse is
     separated * * * or divorced from the nonrequesting
     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 the liability is not granted.

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

          (d) 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. * * *

          (e) Nonrequesting spouse's legal obligation. The
     nonrequesting spouse has a legal obligation pursuant to
     a divorce decree or agreement to pay the outstanding
     liability. * * *

          (f) Attributable to nonrequesting spouse.   The
     liability for which relief is sought is solely
     attributable to the nonrequesting spouse.

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

forth the following negative factors which weigh against granting

equitable relief under section 6015(f):

          (a) Attributable to the requesting spouse. The
     unpaid liability or item giving rise to the deficiency
                                - 18 -

     is attributable to the requesting spouse.

          (b) Knowledge, or reason to know. A requesting
     spouse knew or had reason to know of the item giving
     rise to a deficiency or that the reported liability
     would be unpaid at the time the return was signed.
     This is an extremely strong factor weighing against
     relief. * * *

          (c) Significant benefit. The requesting spouse
     has significantly benefitted (beyond normal support)
     from the unpaid liability or items giving rise to the
     deficiency. * * *

          (d) Lack of economic hardship. The requesting
     spouse will not experience economic hardship (within
     the meaning of section 4.02(1)(c) of this revenue
     procedure) if relief from the liability is not granted.

          (e) Noncompliance with federal income tax laws.
     The requesting spouse has not made a good faith effort
     to comply with federal income tax laws in the tax years
     following the tax year or years to which the request
     for relief relates.

          (f) Requesting spouse's legal obligation. The
     requesting spouse has a legal obligation pursuant to a
     divorce decree or agreement to pay the liability.

The above guidelines are not intended to be exhaustive, and no

single factor is determinative whether equitable relief will be

granted in a particular case.     Rather, all factors will be

considered and weighed appropriately.      Ewing v. Commissioner, 122

T.C. 32, 48 (2004); Rev. Proc. 2000-15, sec. 4.03.

          A.   Positive Factors

                i.   Marital Status

       Petitioner and Dr. Merendino lived apart since at least

1998, with a few exceptions that disqualified petitioner under

the previous section 4.02(1)(a).      Given the overall record, we
                                 - 19 -

view this factor in favor of petitioner.

                ii.    Economic Hardship

     Our analysis under Rev. Proc. 2000-15, sec. 4.02, concluding

that petitioner does not satisfy the economic hardship factor

remains applicable here and weighs against petitioner.

                iii.     Abuse by Nonrequesting Spouse

     There is no evidence in the record that Dr. Merendino abused

petitioner.   Thus, this is a neutral factor.     Ewing v.

Commissioner, 122 T.C. at 46; Washington v. Commissioner, 120

T.C. at 149; Rev. Proc. 2000-15, sec. 4.03(1)(c).

                iv.     No Knowledge or Reason To Know

     As addressed previously, we are not persuaded that

petitioner lacked knowledge or reason to know that any unpaid tax

liability for 1996 would not be paid.      Thus, we find petitioner

has failed to carry her burden, and this factor weighs against

petitioner.

                v.     Nonrequesting Spouse's Legal Obligation

     Because petitioner is not separated or divorced from Dr.

Merendino, this is a neutral factor.

                vi.     Liabilities Solely Attributable to
                        Nonrequesting Spouse

     Petitioner seeks relief from paying the amount of tax

liability that is attributable to Dr. Merendino.     Petitioner

agrees to pay the tax liability attributable to her income.

Therefore, this factor weighs in favor of petitioner.
                                   - 20 -

          B.     Negative Factors

                  i.     Attributable to the Requesting Spouse

     The majority of the liability is attributable to Dr.

Merendino.     Petitioner seeks relief only from the unpaid tax

liability for that portion of the liability attributable to Dr.

Merendino.     Therefore, this factor is neutral.

                  ii.     Knowledge or Reason to Know

     We have concluded above that petitioner should have known

the unpaid tax liability would not be paid.       Thus, this factor

weighs against granting petitioner equitable relief.       Rev. Proc.

2000-15, sec. 4.03(2)(b), 2000-1 C.B. 447, 448-449.

                  iii.     Significant Benefit

     Respondent concedes that petitioner did not significantly

benefit from the tax savings.

                  iv.     Lack of Economic Hardship

     As we noted and have found in our analysis previously

discussed, petitioner has failed to carry her burden of proving

that she will suffer economic hardship if relief is denied.

Consequently, this factor weighs against granting petitioner

equitable relief.

                  v.     Noncompliance With Federal Income Tax Laws in
                         Subsequent Years

     Respondent did not determine that this factor is present in

the instant case, and thus this is a neutral factor.       See Ewing

v. Commissioner, 122 T.C. at 46-47.
                                - 21 -

                  vi. Requesting Spouse’s Legal Obligation

     The Merendinos were married during all relevant times and

remain so.   In addition, neither petitioner nor Dr. Merendino had

legally assumed sole responsibility to pay unpaid tax liability

at issue.    Therefore, this factor is not present in this case and

is a neutral factor.

III. Conclusion

     The testimony in this case is not informative as to what

actually led petitioner to sign the joint return for the tax year

1996 in December 1998.    Understanding the motivation for that

decision would have been preferable to petitioner’s mistaken

attempt to assert that she never actually signed the return.         We

cannot speculate as to how petitioner was led to sign the return,

and she has not accurately explained why she did.       We find as

fact that she signed the return, and we conclude that petitioner

has failed to carry her burden of showing that respondent abused

his discretion in denying petitioner equitable relief under

section 6015(f) with respect to the unpaid 1996 tax liability.

     To reflect the foregoing,

                                            Decision will be entered

                                      for respondent.
