The opinion
T.C. Memo. 2003-306
UNITED STATES TAX COURT
NORA ARANDA, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 5168-02. Filed November 5, 2003.
Ruben Trey Arvizu III, for petitioner.
Michael L. Boman, for respondent.
MEMORANDUM OPINION
MARVEL, Judge: This case arises from a request for relief
under section 60151 with respect to petitioner’s 1985 and 1986
taxable years. Respondent determined that petitioner is entitled
to partial relief from joint and several liability under section
1
All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
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6015, and petitioner timely filed a petition seeking review of
respondent’s determination. The issue presented is whether
petitioner is eligible for additional relief from joint and
several liability under section 6015(b).2
Background
The parties submitted this case fully stipulated pursuant to
Rule 122. The stipulation of facts is incorporated herein by
this reference. Petitioner resided in Hobbs, New Mexico, when
the petition in this case was filed.
Petitioner was married to Domingo P. Aranda (Mr. Aranda)
during the taxable years at issue. Petitioner and Mr. Aranda
filed joint Federal income tax returns for 1984, 1985, and 1986.
In 1988, Mr. Aranda was arrested for drug violations and
sentenced to serve 24 years in prison. Petitioner was not
charged with any criminal offense. On May 12, 1988, respondent
made jeopardy assessments against petitioner and Mr. Aranda for
1984, 1985, and 1986 in the following amounts:
2
In the stipulation of facts, petitioner asserted relevancy
objections with respect to Exhibits 4-R and 5-R. Because
petitioner’s arguments for relief under sec. 6015(b) rely solely
on the notice of determination, we sustain petitioner’s
objections to the exhibits.
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Additional Additions to tax
Year income tax Sec. 6653(b) Sec. 6661 Interest
1984 $5,534.91 $2,464.87 $1,384.70 $1,997
1985 16,754.98 8,006.41 3,050.43 3,647
1986 28,848.86 22,157.87 6,528.77 3,190
On July 8, 1988, respondent issued a notice of deficiency
for 1984 and 1985 and a separate notice of deficiency for 1986.
Petitioner and Mr. Aranda did not file a petition in this Court
with respect to either notice. Because the deficiencies
determined in the notices of deficiency were less than what
respondent had assessed earlier as jeopardy assessments,
respondent abated portions of the jeopardy assessments on March
6, 1989. After taking the abatements into account, the income
tax deficiencies and additions to tax assessed with respect to
petitioner and Mr. Aranda for 1984, 1985, and 1986 were as
follows:
Additions to Tax
Year Deficiency Sec. 6653(b) Sec. 6661
19841 $3,361.16 $2,464.87 --
1985 12,201.72 8,006.41 $3,050.43
1986 26,115.08 22,157.87 6,528.77
1
The parties concede that the 1984 tax liability is no
longer at issue. Petitioner failed to request relief for that
taxable year in her Form 8857, Request for Innocent Spouse
Relief.
Petitioner has paid $23,203.83 and $38,287.20 on the 1985 and
1986 tax liabilities, respectively.
On March 12, 1999, petitioner was granted a divorce from Mr.
Aranda. On May 19, 1999, petitioner filed Form 8857, Request for
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Innocent Spouse Relief, requesting relief only under section
6015(b) for the taxable years 1985 and 1986.3 Petitioner’s
request for relief stated in relevant part:
I feel that I should not be liable for a debt to the
IRS that I have been paying since 1992.
* * * Prior to [Mr. Aranda’s] conviction IRS prepared
an audit on our assets for 1985, 1986 and 1987. They
charged us $104,000 (interest and penalty not
included). I was stuck with this debt, due to being
married to him. I did not commit the crime, but yet,
I’m paying. * * * I feel that it is time to set me
free.
On November 16, 2001, respondent issued a notice of
determination that granted petitioner partial relief from joint
and several liability in amounts equal to the additions to tax
for fraud, plus interest, determined with respect to 1985 and
1986, but denied relief with respect to the balance of the 1985
and 1986 assessments.4 The notice of determination specifically
stated: “We’ve determined you are granted partial relief for the
tax years shown above. * * * We find you eligible for relief
under Section 6015(b) in the amount of $8,006.41 plus interest
for 1985 and $22,157.87 plus interest for 1986.”
3
In the Form 8857, petitioner also requested relief for
1987. Respondent determined that no relief could be granted
because petitioner had paid the 1987 liability in full.
Petitioner did not petition for review of respondent’s
determination with respect to 1987.
4
In a letter dated June 29, 2000, respondent denied
petitioner’s request for relief. Petitioner appealed the
decision administratively, and respondent’s final notice of
determination of Nov. 16, 2001, followed.
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Petitioner filed a timely petition with this Court under
section 6015(e) for review of respondent’s determination. In her
petition, petitioner alleges: (1) “Petitioner did not know and
had no reason to know that there was such an understatement”, and
(2) “It would be inequitable to hold Petitioner liable for the
deficiency, taking into account all the facts and circumstances.”
Petitioner requests abatement of all tax and additions to tax for
1985 and 1986 and a refund of amounts paid on the 1985 and 1986
assessments.
Discussion
Generally, taxpayers filing a joint Federal income tax
return are each responsible for the accuracy of their return and
are jointly and severally liable for the full tax liability.
Sec. 6013(d)(3). However, in certain circumstances, a taxpayer
may obtain relief from joint and several liability under section
6015.
In this case, petitioner relies upon section 6015(b)(1)
which authorizes respondent to grant relief from joint and
several liability if the taxpayer satisfies each requirement of
subparagraphs (A) through (E). Section 6015(b)(1) provides:
SEC. 6015(b). Procedures for Relief From Liability
Applicable to All Joint Filers.--
(1) In general.–-Under procedures prescribed by
the Secretary, if--
(A) a joint return has been made for a
taxable year;
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(B) on such return there is an understatement
of tax attributable to erroneous items of 1
individual filing the joint return;
(C) the other individual filing the joint
return establishes that in signing the return he
or she did not know, and had no reason to know,
that there was such understatement;
(D) taking into account all of the facts and
circumstances, it is inequitable to hold the other
individual liable for the deficiency in tax for
such taxable year attributable to such
understatement; and
(E) the other individual elects (in such form
as the Secretary may prescribe) the benefits of
this subsection not later than the date which is 2
years after the date the Secretary has begun
collection activities with respect to the
individual making the election,
then the other individual shall be relieved of
liability for tax (including interest, penalties, and
other amounts) for such taxable year to the extent such
liability is attributable to such understatement.
Our jurisdiction to review petitioner’s claim for relief is
conferred by section 6015(e), which allows a spouse who has
requested relief from joint and several liability to contest the
Commissioner’s denial of relief by filing a timely petition in
this Court.
There is no dispute that petitioner satisfies subparagraphs
(A) and (E) of section 6015(b)(1). Petitioner filed joint
returns for 1985 and 1986 with Mr. Aranda, as required by section
6015(b)(1)(A), and made a qualifying election on Form 8857 for
taxable years 1985 and 1986, as required by section
6015(b)(1)(E). However, respondent contends that petitioner has
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not satisfied the requirements of subparagraphs (B), (C), and (D)
of section 6015(b)(1).
Except as provided by section 6015, the electing spouse
bears the burden of proving that he or she satisfies each
requirement of section 6015(b)(1).5 See Rule 142(a). The record
before us is devoid of any evidence establishing that petitioner
meets all of the requirements of section 6015(b)(1) and that she
is entitled to additional relief under section 6015.
Failure to produce evidence, in support of an issue of fact
as to which a party has the burden of proof and which has not
been conceded by such party’s adversary, may be a ground for
resolving the issue against that party. Rule 149(b).
Furthermore, although facts may be established by stipulation, a
stipulation of facts does not relieve the party bearing the
burden of proof from producing evidence in support of factual
findings that have not been adequately established by the
stipulation. Id. Because petitioner must prove that she
satisfies each requirement of section 6015(b)(1) in order to
obtain additional relief under section 6015 and because
petitioner has failed to introduce evidence that she satisfies
the requirements of subparagraphs (B), (C), and (D) of section
6015(b)(1), respondent contends that petitioner is not entitled
to relief from joint and several liability under section 6015 in
5
Petitioner does not contend that sec. 7491 applies to this
case.
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excess of that already allowed.
Relying solely on an interpretation of respondent’s notice
of determination, petitioner argues on brief that she is entitled
to additional relief under section 6015(b). Her arguments are
confusing but appear to be as follows: (1) Respondent has
already determined in his notice of determination that petitioner
met all of the requirements for relief from joint and several
liability under section 6015(b) with respect to a portion of the
1985 and 1996 tax liabilities; (2) as a result, we should
interpret respondent’s notice of determination as granting
partial relief from the actual tax liability in the amounts
indicated, which would then reduce petitioner’s liability for the
additions to tax and interest proportionately; and (3) the notice
of determination does not state that it is only granting relief
from the additions to tax for fraud and related interest nor does
it mention section 6653(b). We reject petitioner’s arguments.
Although the notice of determination is ambiguous regarding the
nature of, and basis for, respondent’s determination that
petitioner is entitled to partial relief from joint and several
liability for the 1985 and 1986 assessments, the notice of
determination is clear that respondent granted petitioner partial
relief only. Regardless of how we interpret respondent’s notice
of determination, petitioner had an obligation to demonstrate
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that she satisfied each requirement of section 6015(b)(1) in
order to obtain any additional relief from joint and several
liability for the 1985 and 1986 assessments. This petitioner
failed to do. For example, petitioner introduced no evidence
beyond the stipulated facts to prove that she had no knowledge or
reason to know that her 1985 and 1986 returns had understated the
tax liability of herself and Mr. Aranda or that it would be
inequitable to hold her liable for the 1985 and 1986 assessments.
Petitioner made a strategic decision not to offer additional
evidence and to rely instead on an argument based on an
interpretation drawn from a less than carefully drafted notice of
determination.6 In so doing, petitioner failed to carry her
burden of proof with respect to the requirements of section
6015(b)(1).
We also reject petitioner’s argument regarding the
interpretation of the notice of determination. Although the
notice of determination does not clearly state that the relief
provided by respondent was relief from the additions to tax for
fraud and related interest, nor does it mention section 6653(b),
the amounts listed in the notice of determination correspond
exactly to the amounts of the additions to tax for fraud assessed
6
That decision may reflect a concern about what any
additional evidence might show. Respondent contends that
petitioner profited from the omitted income and may have had
reason to know that at least some of Mr. Aranda’s income was not
shown on the 1985 and 1986 returns.
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with respect to 1985 and 1986, and the relief granted to
petitioner is consistent with a determination made under section
6653(b)(4).7
We hold, therefore, that petitioner is not entitled to any
relief from joint and several liability for the 1985 and 1986
assessments under section 6015(b) in excess of that already
granted by respondent. We do not address whether petitioner
qualifies for relief from joint and several liability under
section 6015(c) or (f) because petitioner has not requested
relief under those provisions.
We have considered the remaining arguments of petitioner for
a contrary result and, to the extent not discussed above, find
those arguments to be irrelevant, moot, or without merit.
To reflect the foregoing,
Decision will be entered
for respondent.
7
Sec. 6653(b)(4) provides that a spouse who files a joint
return shall not be liable for the addition to tax for fraud
unless some part of the underpayment is due to the fraud of that
spouse. In a deficiency suit, the Commissioner bears the burden
of proving by clear and convincing evidence that some part of an
underpayment is due to the fraud of that spouse. See sec.
7454(a); Rule 142(b).