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2010 TC Summary 62
2010 TC Summary 62
2010 TC Summary 62
joint and several liability for unpaid Federal income tax for
Background
petition.
pregnant, Mr. Hood wanted her to stop working and stay at home.
in 1988. Shortly after her daughter was born, Mr. Hood became
finances. Mr. Hood paid the household bills and prepared the
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home after their marriage but titled the home solely in Mr.
refund. Petitioner did not know whether the couple had ever
with Mr. Hood but felt constrained from using any money in the
on April 13, 1998, 2 days before their 1997 Federal income tax
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return was due. Mr. Hood did not file the couple’s joint 1997
13, 1999, while the first bankruptcy was pending. For 1997 Mr.
comply with the court’s orders. Mr. Hood and petitioner filed a
again for failure to comply with the court’s orders, Mr. Hood and
could not afford a lawyer. With the help of the Justice Center
debts.
The 2003 divorce decree provided that Mr. Hood would pay
$1,100 per month in alimony and $500 per month in child support;
expected $40 Federal income tax refund for 2006, she made
inquiries, discovering for the first time that the IRS had
applied her 2006 refund to 1997 because Mr. Hood had failed to
decree, and the 2007 contempt order. She also attached a Social
Security statement dated June 13, 2007, showing that she had no
earnings from 1987 through 2005, the last year data was
detailed some of her current expenses, but she did not complete
Discussion
return are each responsible for the accuracy of their return and
are jointly and severally liable for the entire tax liability due
sec. 3201(g), 112 Stat. 740. The liability at issue here arose
(2003).
joint return may elect to seek relief under section 6015(b) from
1
In the wake of Billings v. Commissioner, 127 T.C. 7 (2006),
Congress amended sec. 6015(e)(1) to confirm our jurisdiction over
stand-alone sec. 6015(f) underpayment cases. Tax Relief and
Health Care Act of 2006, Pub. L. 109-432, div. C, sec. 408(a),
120 Stat. 3061.
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section 6015(c).
finances, and Mr. Hood agreed to sole responsibility for the 1997
that Mr. Hood would not pay their 1997 Federal income tax
may be relieved from joint and several liability if, taking into
hold the taxpayer liable for the unpaid tax and relief is not
liable for all or part of the liability for any unpaid tax or
deficiency.2
2
Rev. Proc. 2000-15, 2000-1 C.B. 447, was superseded by Rev.
Proc. 2003-61, 2003-2 C.B. 296, which is effective as to requests
for relief filed on or after Nov. 1, 2003, and for requests for
relief pending on Nov. 1, 2003, as to which no preliminary
(continued...)
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return for the taxable year for which he or she seeks relief;
the requesting spouse; (vi) the requesting spouse did not file or
fail to file the return with fraudulent intent; and (vii) absent
item of the individual with whom the requesting spouse filed the
2
(...continued)
determination letter had been issued as of that date.
Petitioner’s application for relief was filed on Oct. 10, 2007.
3
The Court has held the 2-year limitation is invalid. Lantz
v. Commissioner, 132 T.C. 131 (2009).
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month period ending on the date of the request for relief; (2)
return that the nonrequesting spouse would not pay the tax
granted.
grant relief under Rev. Proc. 2003-61, sec. 4.03, 2003-2 C.B. at
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A. Marital Status
B. Economic Hardship
Price v. Commissioner, 887 F.2d 959, 965 (9th Cir. 1989)). Rev.
to know when the return was signed that the tax would not be
Appx. 622 (9th Cir. 2005). The general rule for unpaid
(1) When she signed the return, she had no knowledge or reason to
know that the tax reported on the return would not be paid; and
spouse would pay the tax shown due. See Morello v. Commissioner,
petitioner could not have reasonably believed that Mr. Hood would
pay the tax. Petitioner in contrast emphasizes that Mr. Hood was
the sole breadwinner and was responsible for preparing the income
tax returns and paying the family bills throughout the marriage.
at the time Mr. Hood filed the 1997 income tax return, and she
the Court found that a taxpayer who filed the tax return during
the Court found that it was not reasonable for a taxpayer who
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her husband lost his job to believe the tax would be paid.
and the bankruptcies, the Court finds that it was not reasonable
for petitioner to believe that the tax would be paid at the time
she signed the joint 1997 Federal income tax return. Thus, this
was entered into that the nonrequesting spouse would not pay the
Id.
The 2003 divorce decree provides that Mr. Hood agreed to pay
petitioner knew or should have known when she entered into the
divorce decree that Mr. Hood would not fulfill the Family Court
order. He had been making payments to the IRS before the divorce
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E. Significant Benefit
supra).
good faith effort to comply with the Federal tax laws in the
G. Abuse
claim of assault).
return or at the time relief was requested. See Rev. Proc. 2003-
physical health on the date she signed the return or at the time
income tax return that the tax due would not be paid weighs
the 1997 joint Federal income tax return, the fact remains that
her knowledge or reason to know that Mr. Hood would not pay the
tax.
the filing of the joint Federal income tax return for 1997.
petitioner.