United States Tax Court

United States Tax Court

T.C. Summary Opinion 2024-6

BRETT STEVAN JURRIES AND SHERISE JULIE BRUCE,

Petitioners

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

__________

Docket No. 2786-20S.

Filed May 22, 2024.

__________

Christopher S. Crago, Anna Strach (student), and Jared Troy (student),

for petitioner Brett Stevan Jurries.

Sherise Julie Bruce, pro se.

Gregory M. Hahn, Chi-Yun Lee, Brooks W. Lindberg, and Patsy A.

Clarke, for respondent.

SUMMARY OPINION

PUGH, Judge: This case was heard pursuant to the provisions of

section 7463 1 of the Internal Revenue Code in effect when the Petition

was filed. Pursuant to section 7463(b), the decision to be entered is not

reviewable by any other court, and this Opinion shall not be treated as

precedent for any other case.

In a notice of deficiency dated November 8, 2019, the Internal

Revenue Service (IRS or respondent) determined a deficiency of $6,317

1 Unless otherwise indicated, statutory references are to the Internal Revenue

Code, Title 26 U.S.C., in effect at all relevant times, regulation references are to the

Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant times, and

Rule references are to the Tax Court Rules of Practice and Procedure. We round

monetary amounts to the nearest dollar.

Served 05/22/24

2

and a section 6662 accuracy-related penalty of $1,263, for tax year 2016

(year in issue). The IRS later conceded the penalty. Petitioners do not

dispute the deficiency amount.

After the Petition was filed, Mr. Jurries requested from the IRS

relief from joint and several liability from the deficiency under section

6015. The IRS granted him proportionate relief under section 6015(c),

allocating the one item giving rise to the deficiency as if petitioners had

filed separate returns. See § 6015(d)(3)(A). We must decide whether he

is entitled to further relief under section 6015. For the reasons stated

below, we hold that he is not.

Background

The following background is derived from the pleadings,

administrative record, trial testimony, and stipulated facts and

documents admitted into evidence. 2 Mr. Jurries resided in Washington

and Ms. Bruce resided in Idaho when their Petition was timely filed.

I.

Petitioners’ Background

Mr. Jurries has a high school education and was a General

Manager-Driver at Carroll Naslund Disposal, Inc. (Naslund), during the

year in issue. Naslund provided Mr. Jurries with a vehicle for work and

paid all expenses for the vehicle. Ms. Bruce has a college education and

was employed by the State of Idaho as an Environmental Health

Specialist during the year in issue.

After 20 years of marriage Mr. Jurries and Ms. Bruce divorced in

November 2017. While married, they jointly filed Forms 1040, U.S.

Individual Income Tax Return. In earlier years they prepared their joint

returns together. In later years Mr. Jurries provided his Forms W–2,

Wage and Tax Statement, to Ms. Bruce, and she prepared and filed their

joint returns using TurboTax.

II.

Tax Return and Examination

When Ms. Bruce prepared the couple’s 2016 joint return in early

2017, they lived apart. Nonetheless, as in prior years Mr. Jurries

2 Posttrial answering briefs were due January 12, 2024. Respondent missed

this deadline and on January 30, 2024, filed a Motion for Leave to File Out of Time

Simultaneous Answering Brief and lodged his Posttrial Answering Brief. We will deny

the Motion and will not consider any new facts or arguments raised in respondent’s

Answering Brief. See Rule 151(b).

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provided his 2016 Form W–2 to Ms. Bruce, and she electronically filed

the 2016 joint return via TurboTax. Ms. Bruce did not show the 2016

joint return to Mr. Jurries before filing it or provide him a copy

immediately after. Nor did Mr. Jurries ask Ms. Bruce to show him the

2016 joint return before she filed it or attempt to log into their TurboTax

account to review it although he knew he could have done either.

On the 2016 joint return, petitioners deducted $42,181 as

unreimbursed employee business expenses related largely to the

Naslund vehicle. On Form 2106, Employee Business Expenses, attached

to their 2016 joint return, they attributed $15,318 of the expenses to Ms.

Bruce and the remaining $26,863 to Mr. Jurries. The IRS issued a

refund of $12,500 for the year in issue, and Ms. Bruce deposited part of

it into Mr. Jurries’s checking account. 3

The IRS audited petitioners’ 2016 joint return and disallowed the

deduction for unreimbursed employee business expenses. After

receiving the notice of deficiency, Mr. Jurries requested from Ms. Bruce

a copy of the 2016 joint return. He later submitted to the IRS Form 8857,

Request for Innocent Spouse Relief. Following a review, the IRS granted

Mr. Jurries relief under section 6015(c), allocating the unreimbursed

employee business expenses as if petitioners had filed separate returns.

With leave of the Court, Mr. Jurries amended the Petition to assert

section 6015 as an affirmative defense as to his portion of the deficiency.

Discussion

I.

Jurisdiction and Legal Background

We have jurisdiction in this deficiency case to determine whether

Mr. Jurries is entitled to relief from joint and several liability beyond

what he has already received. See § 6213(a); Maier v. Commissioner, 119

T.C. 267, 270 (2002), aff’d, 360 F.3d 361 (2d Cir. 2004). We review his

request for relief de novo. 4 See Porter v. Commissioner, 132 T.C. 203, 210

3 In his request for section 6015 relief, Mr. Jurries stated he received a portion

of the $12,500 refund claimed on their 2016 joint return (stating in a declaration the

amount was “approximately $5,626.25”) whereas Ms. Bruce claims that he received

“half.” Relevant to our analysis is not whether Mr. Jurries received half but rather that

he received, and admitted receiving, a portion.

4 If section 6015(e)(7) applies, an issue we need not decide, our scope of review

would be limited to “(A) the administrative record established at the time of the

determination, and (B) any additional newly discovered or previously unavailable

evidence.” The parties stipulated the administrative record, and the trial testimony

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(2009), superseded in part by statute, Taxpayer First Act, Pub. L. No.

116-25, § 1203, 133 Stat. 981, 988 (2019). Mr. Jurries, as the requesting

spouse, bears the burden of proof. See Rule 142(a); Alt v. Commissioner,

119 T.C. 306, 311 (2002), aff’d, 101 F. App’x 34 (6th Cir. 2004).

Generally, married taxpayers may elect to file a joint federal

income tax return. § 6013(a). After making this election, each spouse is

generally jointly and severally liable for the entire tax due for that

taxable year. § 6013(d)(3); see Porter, 132 T.C. at 206. In certain

circumstances, a spouse may seek relief from joint and several liability

under the procedures set forth in section 6015. A requesting spouse may

seek relief under section 6015(b) or, if eligible, may seek proportionate

relief under section 6015(c). § 6015(a). Subject to certain limitations, if

relief is not available under subsection (b) or (c), a requesting spouse

may be entitled to equitable relief under subsection (f) if “taking into

account all the facts and circumstances, it is inequitable to hold the

individual liable for any unpaid tax or any deficiency (or any portion of

either).” § 6015(f).

II.

Applicability of Section 6015(b) and (c)

The parties agree that Mr. Jurries is not eligible for section

6015(b) relief and is eligible for section 6015(c) proportionate relief. 5 In

general section 6015(c) provides relief from joint and several liability in

that it allocates a deficiency on a joint return between the individuals

per section 6015(d). Section 6015(d)(3)(A) provides the general rule that

an item giving rise to a deficiency on a joint return is allocated as if the

individuals filed separate returns for the taxable year.

was “unavailable evidence” at the time of the administrative proceeding. See Thomas

v. Commissioner, No. 12982-20, 162 T.C., slip. op. at 11–12 (Jan. 30, 2024) (first citing

Freman v. Commissioner, T.C. Memo. 2023-10, at *10; and then citing Sleeth v.

Commissioner, T.C. Memo. 2019-138, at *3, aff’d, 991 F.3d 1201 (11th Cir. 2021)).

Thus, applying section 6015(e)(7) would not change our analysis.

5 At trial, Mr. Jurries sought relief under section 6015(f) only and conceded his

ineligibility for section 6015(b) (or additional relief under section 6015(c)) but in his

posttrial brief resurrects claims under section 6015(b) and (c). Because he expressly

agreed at trial that he disputed only whether section 6015(f) applied, we will not allow

him on brief to resurrect issues that he explicitly stated were not at issue. Even without

the concession, his claim for section 6015(b) relief is meritless: (1) petitioners’ 2016

joint return contains erroneous items of both individuals, (2) Mr. Jurries had reason

to know of the understatement, and (3) holding him liable for the erroneous item is not

inequitable; he kept part of the refund. See § 6015(b)(1)(B), (C), and (D).

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Section 6015(d)(3)(C), an exception to that general rule, provides:

“The Secretary may provide for an allocation of any item in a manner

not prescribed by subparagraph (A) if the Secretary establishes that

such allocation is appropriate due to fraud of one or both individuals.”

Mr. Jurries contends that the IRS should have allocated to Ms. Bruce

all of the unreimbursed employee business expenses due to fraud. As

explained below, we find no fraud in this case.

III.

Relief Under Section 6015(f)

Not satisfied with proportionate relief under section 6015(c), Mr.

Jurries contends that he should get equitable relief under section 6015(f)

for the portion of the unreimbursed employee business expenses

allocable to him.

The Commissioner has outlined procedures for determining

whether a requesting spouse qualifies for equitable relief under section

6015(f) from joint and several liability. See Rev. Proc. 2013-34, § 4.01,

2013-43 I.R.B. 397, 399–400. We consult these procedures when

reviewing the Commissioner’s denial of relief, but we are not bound by

them as our analysis and conclusion ultimately turn on an evaluation of

all the facts and circumstances. See Pullins v. Commissioner, 136 T.C.

432, 438–39 (2011).

Rev. Proc. 2013-34, § 4.01, outlines seven threshold conditions

that a requesting spouse must meet to qualify for relief under section

6015(f): (1) the requesting spouse filed a joint return for the taxable year

for which relief is sought; (2) relief is not available to the requesting

spouse under section 6015(b) or (c); (3) the claim for relief is timely filed;

(4) no assets were transferred between the spouses as part of a

fraudulent scheme; (5) the nonrequesting spouse did not transfer

disqualified assets to the requesting spouse; (6) the requesting spouse

did not knowingly participate in the filing of a fraudulent joint return;

and (7) absent certain enumerated exceptions (including fraud by the

nonrequesting spouse), the tax liability from which the requesting

spouse seeks relief is attributable to an item of the nonrequesting spouse

or an underpayment resulting from the nonrequesting spouse’s income.

These conditions are stated in the conjunctive; thus, a requesting spouse

must satisfy all seven before relief may be granted. Jones v.

Commissioner, T.C. Memo. 2019-139, at *14 (citing Hunter v.

Commissioner, T.C. Memo. 2016-164, at *13), aff’d, No. 20-70013, 2022

WL 327473 (9th Cir. Feb. 3, 2022).

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Among these threshold conditions, the second and the seventh are

disputed. With respect to the second condition, respondent argues that

section 6015(c) relief is available, and Mr. Jurries therefore is precluded

from seeking relief under section 6015(f). Mr. Jurries counters that he

satisfies this condition because he did not receive “full relief” under

section 6015(c), nor did he receive relief under section 6015(b). We agree

with Mr. Jurries. Where a taxpayer has received proportionate relief

under section 6015(c), we may consider him for equitable relief under

section 6015(f) for the portion of the deficiency allocated to him. See

Hopkins v. Commissioner, 121 T.C. 73, 87 (2003); Deihl v. Commissioner,

T.C. Memo. 2012-176, 2012 WL 2361518, at *6 (“If complete relief is not

available under subsection (b) or (c) . . . a spouse may request equitable

relief under section 6015(f).”), aff’d, 603 F. App’x 527 (9th Cir. 2015);

Rowe v. Commissioner, T.C. Memo. 2001-325, 2001 WL 1659287,

at *21–23 (considering the taxpayer for equitable relief under section

6015(f) for items giving rise to the deficiencies allocable to her). We

therefore find that the second condition has been satisfied with respect

to the portion of the deficiency allocated to Mr. Jurries.

As to the seventh condition, citing Rev. Proc. 2013-34, § 4.01(7)(e),

Mr. Jurries contends the fraud exception applies to his portion of the

deficiency. Rev. Proc. 2013-34, § 4.01(7)(e), permits equitable relief for

the portion of the liability attributable to the requesting spouse when

fraud committed by the nonrequesting spouse is the reason for the

erroneous item. Rev. Proc. 2013-34, § 4.01(7)(e), does not define “fraud.”

But Treasury Regulation § 1.6015-1(d) states that “a fraudulent scheme

includes a scheme to defraud the Service or another third party.” The

“badges of fraud” demonstrate an intent to misrepresent, conceal, or

hide information. See Spies v. United States, 317 U.S. 492, 499 (1943);

Recklitis v. Commissioner, 91 T.C. 874, 909–10 (1988).

Mr. Jurries has not established fraud in this case. Ms. Bruce did

not hide or conceal the return from Mr. Jurries. He could have accessed

the TurboTax account and reviewed the 2016 joint return. He chose not

to and cannot claim fraud now to avoid the consequences of his

disinterest. Section 6015 does not protect a spouse who turns a blind eye

to facts readily available to him. Smaaland v. Commissioner, T.C.

Memo. 2017-31, at *12 (citing Charlton v. Commissioner, 114 T.C. 333,

340 (2000)).

Perhaps most damaging is the evidence in the record that Ms.

Bruce deposited a portion of the refund from their 2016 joint return into

Mr. Jurries’s checking account. Mr. Jurries testified at trial that he

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knew they could not deduct the expenses disallowed by the IRS because

Naslund owned the vehicle and paid its expenses. He received and kept

part of the refund arising from the disallowed deduction. While the math

might not work precisely, he has not explained how it would be equitable

for him to keep all of the refund he received and leave Ms. Bruce to pay

his share of the deficiency back. Nor did he suggest that he should bear

the liability for the share of the refund he received attributable to the

disallowed deduction. We conclude Mr. Jurries has failed to establish

fraud in this case and does not satisfy the threshold requirements set

forth in Rev. Proc. 2013-34, § 4.01.

In sum, Mr. Jurries is not entitled to any further relief under

section 6015. He therefore is liable for $3,742 of the $6,317 deficiency for

the year in issue. We have considered all arguments made and, to the

extent not mentioned above, we conclude that they are moot, irrelevant,

or without merit.

To reflect the foregoing,

An appropriate order and decision will be entered.