                     T.C. Summary Opinion 2004-9



                       UNITED STATES TAX COURT



                  MARY K. MALONE, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 18842-02S.              Filed February 3, 2004.



     Mary K. Malone, pro se.

     Steven W. LaBounty, for respondent.



     COHEN, Judge:   This case was heard pursuant to the

provisions of section 7463 of the Internal Revenue Code in effect

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

entered is not reviewable by any other Court, and this opinion

should not be cited as authority.   Unless otherwise indicated,

all section references are to the Internal Revenue Code in effect

for the year in issue.
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     This case was commenced in response to a final notice

denying petitioner’s request for relief under section 6015(f)

with respect to unpaid taxes on a joint return filed by

petitioner and her former spouse for 1998.

                            Background

     Some of the facts have been stipulated, and the stipulated

facts are incorporated in our findings by this reference.

     Petitioner and Mark D. Malone (Malone) were married on

August 12, 1978.   In February 1999, petitioner filed a petition

seeking dissolution of her marriage to Malone.   A Stipulation

executed by petitioner and Malone in July 1999 included the

following paragraph:

          (e) Tax Returns: Mark’s attorney shall convey to
     Mary’s attorney the 1998 joint income tax returns
     prepared by Vercamp & Malone, CPAs. Mary and her
     counsel shall promptly review said returns upon receipt
     of same and Mary shall execute said joint returns.

A Judgment & Decree of Dissolution of Marriage (the decree) was

filed December 26, 2000, in the Circuit Court of Phelps County,

Missouri.   The decree included the following provision:

                        1998 TAX LIABILITY

          The Court finds that Petitioner had $2,418.00
     intercepted from her 1999 tax refund to apply to joint
     taxes for 1998, of which Petitioner’s income was
     approximately 5 percent of adjusted gross income.
     * * * [Malone] is ordered to pay back to Petitioner
     95 percent of said amount, in the amount of $2,297.10
     by December 1, 2000. If the parties receive a refund
     for tax year 1998, state and/or federal, then any
     refund shall be the sole and separate property of * * *
     [Malone].
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On January 5, 2001, Malone reimbursed petitioner the sum of

$2,297.10.

     On or about August 22, 1999, petitioner and Malone filed a

Form 1040, U.S. Individual Income Tax Return, for 1998.     The

Form 1040 reported various items of income, including $7,133.49

of wages paid to petitioner from Suncliff Greenhouse & Nursery.

The return reported total tax of $35,888, payments of $30,393,

and a balance of $6,696.   The balance shown was not paid when the

return was filed.   After the return was processed, a penalty for

failure to make estimated tax payments and a penalty for failure

to pay the tax reported on the return were assessed.

Subsequently, in addition to the setoff described in the decree,

petitioner’s overpayment of her 2000 income tax in the amount of

$1,991 and a rebate of $300 due to petitioner in 2001 were setoff

against the unpaid 1998 liability.      The remaining unpaid balance

of the 1998 liability, including interest and penalties, was paid

by Malone after commencement of this case.

     On or about July 21, 2001, petitioner executed a Form 8857,

Request for Innocent Spouse Relief, with respect to the liability

for 1998.    In an attachment to the form, petitioner stated that

she did not sign the 1998 income tax return.     In a Form 886-A,

Innocent Spouse Questionnaire, petitioner again asserted that she

did not sign the 1998 return.

     Petitioner’s claim for relief was considered by a

representative of the Internal Revenue Service.     The
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representative considered factors including marital status,

economic hardship, and the amount of the liability attributable

to petitioner and to Malone and weighed factors in favor of

relief and factors against relief.     The representative concluded

that, despite her denial, petitioner did sign the return.      Relief

was denied on the ground that petitioner did not establish that

she believed the taxes would be paid at the time that the return

was filed.

     In the petition in this case, petitioner alleged:     “I did

not sign the 1998 income tax return and did not see the return

until divorce proceedings commenced.     At that time, I was

reluctantly provided a copy of the return.     I should not be held

responsible.”

                            Discussion

     At the time of trial, petitioner testified that she did not

recall signing the 1998 return.   Malone and another witness

testified that petitioner had signed the return, and comparisons

of the signatures lead us to conclude that she in fact signed the

return.   If the return had not been a joint return, petitioner

would not be entitled to relief under section 6015(f).     Raymond

v. Commissioner, 119 T.C. 191, 195-197 (2002).     Thus, by the time

of trial, petitioner was faced with a dilemma as to whether she

did or did not contend that the return for 1998 was a joint

return.
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       With respect to the relief that she requests, petitioner

bears the burden of proof.    Alt v. Commissioner, 119 T.C. 306,

311 (2002); Jonson v. Commissioner, 118 T.C. 106, 113 (2002),

affd. 353 F.3d 1181 (10th Cir. 2003).    We review the

determination to deny relief under section 6015(f) under an abuse

of discretion standard.    See Ewing v. Commissioner, 122 T.C. ___

(2004); Washington v. Commissioner, 120 T.C. 137, 146 (2003).

Petitioner must show that respondent’s action in denying relief

was arbitrary, capricious, or without sound basis in fact.

Jonson v. Commissioner, supra at 125.

       As directed by section 6015(f), the Commissioner has

prescribed procedures to determine whether a taxpayer qualifies

for relief from joint and several liability under section

6015(f).    These procedures are set forth in Rev. Proc. 2000-15,

2000-1 C.B. 447.    The Court has upheld the use of these

procedures in reviewing a negative determination.    See Washington

v. Commissioner, supra at 147; Jonson v. Commissioner, supra at

125.

       Because of the dearth of evidence in the record on the

conditions and circumstances specified in Rev. Proc. 2000-15,

sec. 4.03, 2000-1 C.B. at 448, we need not address all the

factors that are listed there.    It appears that the unpaid

liability was not attributable or attributed by the examiner to

petitioner.    Although the decree specified Malone’s obligation to

reimburse petitioner with respect to the setoff of her 1999
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overpayment against the 1998 joint liability, it was silent as to

subsequent payments.   The key consideration here, and the basis

for the negative determination, is that petitioner has not shown

that she did not know or have reason to know that the reported

liability would be unpaid at the time that the return was signed.

See Feldman v. Commissioner, T.C. Memo. 2003-201.

     Unfortunately for petitioner, her denials that she had

signed the 1998 return, her lack of recollection of signing the

return, and the express terms of the July 1999 Stipulation and

the December 2000 decree undermine her claim.      The decree

specifically refers to the application of petitioner’s 1999 tax

refund to the 1998 liability, which indicates that petitioner had

actual or constructive knowledge that an unpaid liability

existed.   During her testimony, petitioner’s only explanation of

these circumstances was “I was not informed or advised.”

     Upon consideration of the entire record, we cannot conclude

that there was an abuse of discretion in denying petitioner

relief under section 6015(f).

                                             Decision will be entered

                                        for respondent.
