United States Tax Court

United States Tax Court

T.C. Memo. 2022-78

JENNIFER A. SOLER,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket No. 18639-19.

Filed July 18, 2022.

—————

Michael A. Raiken and E. Martin Davidoff, for petitioner.

Brian E. Salisbury, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

MARVEL, Judge: This case arises from petitioner’s request for

relief from joint and several liability under section 6015 with respect to

tax years 2012, 2013, 2014, and 2015. The issue for decision is whether

petitioner is entitled to relief under section 6015(b) or (f). 1

FINDINGS OF FACT

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

stipulated facts and facts drawn from the stipulated exhibits, which

include the administrative record in this case, are incorporated herein

by this reference. Petitioner, Jennifer A. Soler, resided in New Jersey

when she petitioned this Court.

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

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

are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all relevant

times, and all Rule references are to the Tax Court Rules of Practice and Procedure.

Served 07/18/22

2

[*2] Mrs. Soler is married to and resides with her husband, Carlos

Soler, the nonrequesting spouse. Mr. and Mrs. Soler have been married

for over 25 years, have two children together, and have never been

legally separated.

Mrs. Soler is the primary income earner for her household. At the

time of trial, Mrs. Soler was employed as a manager and earned an

annual salary of $160,000. She has a two-year associate’s degree in

fashion design and worked as a clothing designer during the 2012

through 2015 tax years. Mr. Soler has a bachelor’s degree in accounting

and was primarily a stay-at-home father during the 2012 through 2015

tax years. Mr. Soler also operated a consulting business during tax

years 2012, 2013, and 2014 and a real estate business during tax years

2013 and 2014.

I.

Tax returns and examination

The Solers timely and jointly filed Form 1040, U.S. Individual

Income Tax Return, for each year at issue. The returns were prepared

by Mr. Soler and were signed by both Mr. and Mrs. Soler.

Mr. Soler reported the income and expenses of his consulting and

real estate businesses on separate Schedules C, Profit or Loss From

Business. For tax year 2012 the consulting Schedule C reported gross

receipts of $16,340 and a net loss of $8,109. For tax year 2013 the

consulting Schedule C reported no gross receipts and a net loss of $5,103,

and the real estate Schedule C reported no gross receipts and a net loss

of $7,420. For tax year 2014 the combined Schedules C reported no gross

receipts, but Mr. Soler reported a net Schedule C profit of $1,762 on his

Schedule SE, Self-Employment Tax.

On April 29, 2015, the Internal Revenue Service (IRS) informed

Mr. and Mrs. Soler via letter that their 2012 income tax return was

being examined. The letter identified issues with the Schedule C gross

receipts and with various deductions for reported expenses. An IRS

Revenue Agent (RA) scheduled an initial interview with Mr. Soler on

May 14, 2015. When the RA arrived at the Solers’ apartment for the

interview, Mrs. Soler answered the door, told the agent that Mr. Soler

was ill, and requested that the meeting be rescheduled. On May 20,

2015, the RA and Mr. Soler rescheduled the initial interview for May 29,

2015. During that conversation, Mr. Soler asked whether Mrs. Soler

was required to be present at the interview, and the RA told Mr. Soler

that she was welcome but not obligated to be there.

3

[*3] On June 10, 2015, the RA mailed separate letters to Mr. and Mrs.

Soler informing them that their 2013 income tax return was also being

examined. However, the letter addressed to Mr. Soler was later

returned as undeliverable. On August 12, 2015, the RA opened an

examination of the Solers’ 2014 return.

On November 13, 2015, respondent mailed separate letters and

Forms 4549–A, Income Tax Examination Changes, to Mr. and Mrs.

Soler for the 2012, 2013, and 2014 tax years. Respondent later issued a

notice of deficiency to Mr. and Mrs. Soler for tax years 2012, 2013, and

2014 that determined a deficiency in tax and a section 6662 accuracyrelated penalty for each year. The Solers did not dispute the notice of

deficiency by filing a petition with this Court, and respondent assessed

the proposed deficiencies and penalties.

The IRS performed an income-matching examination of the

Solers’ 2015 tax return and determined that the 2015 return failed to

include in income distributions from Mr. and Mrs. Soler’s qualified

retirement accounts of $6,000 and $23,000, respectively. Respondent

issued a notice of deficiency to Mr. and Mrs. Soler for the 2015 tax year

determining a deficiency in tax and a section 6662 accuracy-related

penalty. The Solers did not petition the Court with respect to this notice,

and respondent assessed the proposed deficiency and penalty.

II.

Request for relief

On February 20, 2018, respondent received a timely Form 8857,

Request for Innocent Spouse Relief, from Mrs. Soler, requesting relief

from joint and several liability for tax years 2012, 2013, 2014, and 2015

pursuant to section 6015(b), (c), and (f). In her request for relief Mrs.

Soler claimed that she was unaware of any income tax liabilities until

the IRS began levying against her wages. Mrs. Soler also claimed that

she believed Mr. Soler was unemployed during the years at issue and

had no income. 2

In her request for relief, Mrs. Soler stated that neither she nor

any member of her family was a victim of spousal abuse or domestic

violence during any of the years at issue and that she was not suffering

any physical or mental health problems when the returns were filed or

when she filed her request for relief. Mrs. Soler also stated that she and

2 Mrs. Soler also stated that, as a result of the levy, she would begin filing

separately from Mr. Soler, but she continued to file joint returns with Mr. Soler for tax

years 2016, 2017, 2018, 2019, and 2020.

4

[*4] Mr. Soler were experiencing ongoing financial stress and were in

the midst of a bankruptcy proceeding during the years at issue. 3

On May 25, 2018, respondent issued a preliminary determination

to Mrs. Soler denying her request for section 6015 relief for all years

included in the request. On June 19, 2018, Mrs. Soler submitted Form

12509, Innocent Spouse Statement of Disagreement, appealing

respondent’s preliminary determination, and her case was assigned to

the IRS Office of Appeals (Appeals). 4 Mrs. Soler appended a letter to

her Form 12509, in which she disagreed with three of the preliminary

determination’s conclusions: (1) that she had knowledge or reason to

know of the items that caused the understatements of tax; (2) that she

would not experience financial hardship if relief were denied; and

(3) that it would not be unfair to hold her liable for the unpaid liabilities.

In her letter to Appeals, Mrs. Soler acknowledged that she was

aware that her income was not enough to pay all of the household

expenses during the years at issue. However, she believed the gap

between her income and the family’s expenses was being bridged by gifts

from Mr. Soler’s mother. Mrs. Soler argued that she relied on Mr. Soler

to handle all of the family finances and tax returns, and she did not have

any reason to believe that there was an issue until the IRS began levying

against her wages. Mrs. Soler submitted some household bills and bank

statements in support of her contention that she would experience

financial hardship if relief was not granted. However, the bank

statements, which are for Mrs. Soler’s personal checking account from

October 29, 2014, through December 29, 2015, showed that Mrs. Soler

regularly paid household bills from the account.

Appeals issued a final notice of determination to Mrs. Soler on

July 10, 2019, denying her request for relief. Appeals determined that

Mrs. Soler did not qualify for relief under section 6015(b) because she

had knowledge or reason to know of the understatements of tax when

she signed the returns. Appeals further determined that Mrs. Soler did

not qualify for relief under section 6015(c) because she did not meet the

3 Mr. and Mrs. Soler filed a voluntary petition for chapter 13 bankruptcy on

July 20, 2011. The U.S. Bankruptcy Court of New Jersey confirmed the bankruptcy

plan on October 7, 2011, and entered a discharge order approximately five years later

on October 24, 2016.

4 On July 1, 2019, the IRS Office of Appeals was renamed the IRS Independent

Office of Appeals. See Taxpayer First Act, Pub. L. No. 116-25, § 1001, 133 Stat. 981,

983 (2019). We will use the name in effect at the times relevant to this case, i.e., the

Office of Appeals or Appeals.

5

[*5] marital status requirement. Lastly, Appeals determined that,

although Mrs. Soler met the threshold requirements for relief under

section 6015(f), no relief would be granted because Mrs. Soler did not

meet the requirements for streamlined relief, she had knowledge or

reason to know of the understatements of tax when the returns were

filed, and she did not demonstrate that she would experience economic

hardship if relief was not granted.

Mrs. Soler timely petitioned this Court on October 15, 2019. We

held trial on October 25, 2021.

OPINION

Generally, married taxpayers who elect to file a joint federal

income tax return are jointly and severally liable for the entire tax

liability due on that return. § 6013(d)(3); Butler v. Commissioner, 114

T.C. 276, 282 (2000). In certain circumstances, however, section 6015

allows a taxpayer who filed a joint return to qualify for relief from joint

and several liability.

Section 6015 provides three avenues to relief from joint and

several liability: (1) full or partial relief under subsection (b) (general

relief provision applicable to all joint filers); (2) proportionate relief

under subsection (c) (dealing with spouses who are no longer married,

legally separated, or no longer living together); and (3) if relief is not

available to the taxpayer under either subsection (b) or (c), equitable

relief under subsection (f) (equitable relief).

This Court has jurisdiction to determine the appropriate relief

available to a requesting spouse under section 6015(b), (c), and (f). See

§ 6015(e)(1)(A). We apply a de novo standard of review to any

determination made by the Commissioner under section 6015.

§ 6015(e)(7); see Porter v. Commissioner, 132 T.C. 203, 210 (2009),

superseded in part by statute, Taxpayer First Act § 1203, 133 Stat.

at 988. Our scope of review, however, is limited to the administrative

record established at the time of the Commissioner’s determination and

any newly discovered or previously unavailable evidence. § 6015(e)(7). 5

The taxpayer requesting relief under section 6015 generally bears the

5 Subsection (e)(7) was added to section 6015 by Taxpayer First Act § 1203, 133

Stat. at 988, and applies to section 6015 petitions filed on or after July 1, 2019. See

Sutherland v. Commissioner, 155 T.C. 95, 96–97, 105 (2020). Mrs. Soler petitioned

this Court on October 15, 2019. Accordingly, section 6015(e)(7) defines both the

standard and scope of review in this case.

6

[*6] burden of proving that he or she is entitled to relief. See Rule

142(a); Porter, 132 T.C. at 210.

Mrs. Soler has requested relief from joint and several liability

under section 6015(b) and (f). 6 We will address each claim in turn.

I.

Section 6015(b)

To be entitled to relief under section 6015(b), a taxpayer

requesting relief must satisfy each of the following requirements: (1) a

joint return was filed for the year(s) at issue; (2) the return(s) contain

an understatement of tax attributable to an erroneous item of the

nonrequesting spouse; (3) at the time of signing the return, the

requesting spouse did not know and had no reason to know of the

understatement; (4) taking into account all the facts and circumstances,

it is inequitable to hold the requesting spouse liable for the deficiency in

tax attributable to the understatement; and (5) the requesting spouse’s

claim for relief is timely. § 6015(b)(1); Alt v. Commissioner, 119 T.C.

306, 313 (2002), aff’d, 101 F. App’x 34 (6th Cir. 2004).

The only requirements that are disputed by the parties are

whether Mrs. Soler had knowledge or reason to know of the

understatements at the time she signed the returns for the years at

issue and whether it is inequitable to hold her liable for the deficiency.

Mrs. Soler and the nonrequesting spouse filed a joint return for each

year at issue, and the portions of the deficiencies that arise from the

Schedule C businesses in tax years 2012 through 2014 and from Mr.

Soler’s retirement account distribution in 2015 are attributable to the

nonrequesting spouse.

To be eligible for relief under section 6015(b), the requesting

spouse must establish that he or she did not know and had no reason to

know of the understatement on the return at the time he or she signed

it. A taxpayer has knowledge or reason to know of an understatement

if he or she actually knew of the understatement or if a reasonable

6 In her initial request to the IRS, Mrs. Soler requested relief under section

6015(b), (c), and (f) and stated, in support of her request for relief under subparagraph

(c), that she and Mr. Soler were not living together at that time. However, Mrs. Soler

has since abandoned her argument under section 6015(c). Because Mrs. Soler has

abandoned her argument under section 6015(c), and because she remains married to

and resides with Mr. Soler, we conclude that she is not eligible for relief under section

6015(c).

7

[*7] person in similar circumstances would have known of the

understatement. Treas. Reg. § 1.6015-2(c).

A.

Actual knowledge

A spouse lacks actual knowledge if she is unaware of the

circumstances that gave rise to the error on the tax return. See Bokum

v. Commissioner, 94 T.C. 126, 145–46 (1990), aff’d, 992 F.2d 1132 (11th

Cir. 1993). In the case of omitted income, actual knowledge generally

means knowledge of receipt of the income. Treas. Reg. §§ 1.6015-2(c),

1.6015-3(c)(2)(i)(A).

In the case of erroneous deductions, actual

knowledge means knowledge of the facts that made the item not

allowable as a deduction. Treas. Reg. §§ 1.6015-2(c), 1.6015-3(c)(2)(i)(B);

see also Price v. Commissioner, 887 F.2d 959, 963 n.9 (9th Cir. 1989).

The parties do not dispute that Mrs. Soler lacked actual

knowledge of the understatements to the extent that they relate to items

attributable to the nonrequesting spouse. Mrs. Soler credibly testified

that she did not know the details of Mr. Soler’s businesses and did not

participate in them. We will therefore turn our discussion to whether

Mrs. Soler had reason to know of the understatements.

B.

Reason to know

A taxpayer has reason to know of an understatement if a

reasonable person in similar circumstances could be expected to know

that there was an understatement or that further investigation was

warranted. Butler, 114 T.C. at 283; Treas. Reg. § 1.6015-2(c). In

determining whether a requesting spouse had reason to know of an

understatement, we consider all of the facts and circumstances,

including the requesting spouse’s level of education, the requesting

spouse’s level of involvement in the family’s business and financial

affairs, the presence of unusual or lavish expenses compared to the

family’s past level of income and expenditures, and the nonrequesting

spouse’s level of evasiveness or deceit regarding the family’s finances.

Price v. Commissioner, 887 F.2d at 965; see also Treas. Reg.

§ 1.6015-2(c).

Because the relief provisions of section 6015 are “designed to

protect the innocent, not the intentionally ignorant,” Dickey v.

Commissioner, T.C. Memo. 1985-478, 50 T.C.M. (CCH) 1041, 1046, the

reason to know test establishes a duty of inquiry on the part of the

requesting spouse, Stevens v. Commissioner, 872 F.2d 1499, 1505 (11th

Cir. 1989), aff’g T.C. Memo. 1988-63; Butler, 114 T.C. at 283–84. A

8

[*8] spouse who does not fulfill this duty may be charged with

constructive knowledge of the understatement. Price v. Commissioner,

887 F.2d at 965; Porter, 132 T.C. at 212. The duty of inquiry arises when

a spouse is aware of sufficient facts to place him or her on notice that an

understatement may exist. Price v. Commissioner, 887 F.2d at 965.

A requesting spouse cannot satisfy the lack of knowledge

requirement simply by claiming that he or she did not review the return

at issue before signing it. A taxpayer who signs a return is generally

charged with constructive knowledge of its contents. Porter, 132 T.C.

at 211.

Mrs. Soler contends that she did not have reason to know of the

understatements on the dates she signed the returns. In her view she

was an unsophisticated taxpayer who entrusted the family finances to

Mr. Soler and did not participate in the Schedule C businesses. She

further argues that Mr. Soler hid the existence of the bank accounts that

he used for his Schedule C ventures and she, therefore, was not aware

of enough facts to be put on notice that the understatements might exist.

Accordingly, she contends that a reasonable person in her position would

not have inquired any further into the returns than she did.

Mrs. Soler has not carried her burden of proving that she lacked

reason to know of the understatements. Mrs. Soler is college educated,

was the primary income earner for her household during the years at

issue, and had some regular involvement in the household finances. On

the dates she signed the returns for 2012 through 2014, Mrs. Soler

believed that Mr. Soler did not work and had no income. As a result, the

mere attachment of Schedules C to the 2012, 2013, and 2014 returns

would raise questions about the validity of the returns in the mind of a

reasonably prudent person in Mrs. Soler’s position. This is particularly

true in view of the fact that Mrs. Soler knew that her income alone was

not sufficient to pay all of her family’s routine expenses. 7 Additionally,

the Schedules C that Mr. Soler completed showed net losses for tax years

2012 and 2013. The Solers were experiencing financial stress during

the years at issue and were in the middle of a chapter 13 bankruptcy

proceeding. Under those circumstances, a reasonably prudent person

would certainly inquire about the loss-generating activity. Indeed, Mrs.

Soler testified that, had she looked at the returns and noticed the

7 Although Mrs. Soler has claimed that Mr. Soler’s mother was providing

monetary gifts to the family to pay expenses that her income could not cover, there is

no documentation to support this claim in the administrative record.

9

[*9] reported losses, she would have asked her husband about them.

However, even if Mrs. Soler did not actually review the returns, she is

nonetheless charged with constructive knowledge of their contents

because she signed them. Because Mrs. Soler did not fulfill her duty of

inquiry, we conclude that she had reason to know of the

understatements on the 2012, 2013, and 2014 tax returns.

Unlike the 2012, 2013, and 2014 understatements, the 2015

understatement arises from a failure to report as income on their 2015

tax return distributions that Mr. and Mrs. Soler took from their

retirement accounts in 2015. Mrs. Soler claims that she did not review

the 2015 return before signing it and was not aware that it contained an

understatement. However, at the time Mrs. Soler signed the 2015 tax

return, the IRS was examining the returns for 2012 through 2014 and

had issued proposed adjustments for those years. Although Mrs. Soler

chose not to participate in the audit, she admittedly knew that it was

happening and even briefly spoke to the examining RA in May 2015. It

is difficult to conceive of a more conspicuous notice that an

understatement may exist or that some inquiry into the validity of a tax

return is warranted than an audit of and proposed adjustment to the

immediately preceding three years of tax returns. Because Mrs. Soler

unreasonably and inexplicably failed to review the 2015 return, we

conclude that she had reason to know of the understatement contained

therein.

II.

Section 6015(f)

Section 6015(f) allows for relief from joint and several liability in

cases where no relief is available under subparagraph (b) or (c) if, taking

into account all facts and circumstances, it would be inequitable to hold

the requesting spouse jointly and severally liable. § 6015(f)(1). Having

found that Mrs. Soler is not eligible for relief under section 6015(b) or

(c), we turn our inquiry to whether it would be inequitable to hold her

liable for the tax due.

The IRS evaluates eligibility for relief under section 6015(f) using

the framework set forth in Rev. Proc. 2013-34, 2013-43 I.R.B. 397,

modifying and superseding Rev. Proc. 2003-61, 2003-2 C.B. 296.

Although we are not bound by the eligibility guidelines set forth in Rev.

Proc. 2013-34, the Court considers the same factors when reviewing a

taxpayer’s claim for relief under section 6015.

See Pullins v.

Commissioner, 136 T.C. 432, 438–39 (2011). Rev. Proc. 2013-34, § 4.01,

2013-43 I.R.B. at 399–400, establishes several threshold conditions that

10

[*10] the requesting spouse must satisfy to be considered for equitable

relief: (1) a joint return was filed for the year(s) at issue; (2) the tax

liability from which the requesting spouse seeks relief is attributable in

full or in part to an item of the nonrequesting spouse; (3) relief is not

available to the requesting spouse under section 6015(b) or (c); (4) no

assets were transferred between the spouses as part of a fraudulent

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

assets (as defined by section 6015(c)(4)(B)) to the requesting spouse;

(6) the requesting spouse did not knowingly participate in the filing of a

fraudulent joint return; and (7) the claim for relief is timely filed. The

parties agree that Mrs. Soler satisfies these threshold conditions.

Once a taxpayer has satisfied the threshold conditions, we will

consider whether the requesting spouse is eligible for streamlined relief

or, if not, whether he or she qualifies under the full facts and

circumstances test. Rev. Proc. 2013-34, §§ 4.02 and 4.03, 2013-43 I.R.B.

at 400–03.

Streamlined determinations granting equitable relief under

section 6015(f) are available if the requesting spouse can establish that

he or she (1) is no longer married to the nonrequesting spouse; (2) would

suffer economic hardship if relief were not granted; and (3) lacked

knowledge or reason to know of the understatement at the time the

return at issue was signed. Rev. Proc. 2013-34, § 4.02. The parties agree

that Mrs. Soler is not eligible for a streamlined determination granting

relief because she remains married to Mr. Soler.

If a requesting spouse is not eligible for streamlined relief, we will

next and finally consider the request for relief, taking into account all

the facts and circumstances. Id. §§ 4.02 and 4.03. The factors

considered include but are not limited to (1) marital status; (2) economic

hardship; (3) knowledge; (4) legal obligation to pay the tax; (5) the

amount of benefit derived from the understatement or underpayment;

(6) compliance with income tax laws; and (7) mental or physical health.

Id. § 4.03. We analyze these factors in the light of the attendant

circumstances, and no one factor is determinative. Id.; see also Pullins,

136 T.C. at 448–55.

A.

Marital status

The marital status factor weighs in favor of relief when the

requesting spouse is no longer married to the nonrequesting spouse and

is neutral if the requesting spouse remains married to the

11

[*11] nonrequesting spouse. Rev. Proc. 2013-34, § 4.03(2)(a), 2013-43

I.R.B. at 400–01. Because Mrs. Soler is still married to and residing

with Mr. Soler, this factor is neutral.

B.

Economic hardship

This factor weighs in favor of relief when a failure to grant relief

from joint and several liability would cause the requesting spouse to be

unable to pay reasonable basic living expenses. Id. § 4.03(2)(b), 2013-43

I.R.B. at 401. If denying relief would not cause the requesting spouse

economic hardship, this factor is neutral. Id. Generally, this factor will

not favor relief if a requesting spouse’s income is greater than 250% of

the federal poverty guidelines, unless her monthly income exceeds her

reasonable basic living expenses by $300 or less. Id. Mrs. Soler’s income

exceeds 250% of the federal poverty guidelines, and she has not shown

that her monthly income exceeds her reasonable basic living expenses

by $300 or less. This factor is neutral.

C.

Knowledge or reason to know

If the requesting spouse knew or had reason to know of the items

giving rise to the understatement when the return was filed, this factor

will weigh against relief. Id. § 4.03(2)(c), 2013-43 I.R.B. at 401–02. If

the requesting spouse did not know or have reason to know of the

understatement, this factor will weigh in favor of relief. Id. If the

nonrequesting spouse was abusive or financially controlling, this factor

may weigh in favor of relief even if the requesting spouse knew or had

reason to know about the items giving rise to the understatement. Id.

1.

Actual knowledge

Rev. Proc. 2013-34 is silent on actual knowledge with respect to

understatements of tax. However, we find that the regulations

applicable to knowledge under section 6015(b) and (c) provide a helpful

framework for analysis under section 6015(f). See, e.g., Butler, 114 T.C.

at 292–93 (applying the same knowledge analysis performed under

section 6015(b) to section 6015(f)); Jacobsen v. Commissioner, T.C.

Memo. 2018-115, at *27 (applying the same knowledge analysis

performed under section 6015(c) to section 6015(f)), aff’d, 950 F.3d 414

(7th Cir. 2020). We accepted as credible Mrs. Soler’s testimony that she

did not participate in Mr. Soler’s Schedule C businesses and did not have

actual knowledge of his receipt of income in connection with those

businesses in 2012, 2013, and 2014. See supra p. 7.

12

[*12]

2.

Reason to know

A spouse has reason to know of an understatement if a reasonable

person in similar circumstances would have known that the return

contained an understatement or that further investigation was

warranted. Butler, 114 T.C. at 283; Treas. Reg. § 1.6015-2(c). The

factors we consider in evaluating whether a requesting spouse had

reason to know of an understatement include but are not limited to

(1) the requesting spouse’s level of education; (2) the requesting spouse’s

level of involvement in the activity giving rise to the understatement;

(3) any deceit or evasiveness by the nonrequesting spouse; (4) the

requesting spouse’s degree of involvement in business or household

financial matters; (5) the requesting spouse’s business or financial

expertise; and (6) any lavish or unusual expenditures compared with

past spending. Rev. Proc. 2013-34, § 4.03(2)(c)(iii), 2013-43 I.R.B. at 402.

In evaluating whether Mrs. Soler qualified for relief under section

6015(b), we concluded that she had reason to know of the

understatements for all years at issue because she failed to fulfill her

duty of inquiry. See supra pp. 7–9. That same conclusion applies here.

Consequently, we find that this factor weighs against granting relief.

D.

Legal obligation

This factor weighs in favor of relief when the nonrequesting

spouse, through a divorce decree or other legally binding agreement,

bears the sole legal obligation to pay the outstanding liability. Rev. Proc.

2013-34, § 4.03(2)(d), 2013-43 I.R.B. at 402. This factor will weigh

against relief if the requesting spouse has the legal obligation to pay,

and it is neutral if the divorce decree is silent as to tax liabilities or the

spouses are not separated. Id. Because Mrs. Soler remains married to

Mr. Soler, this factor is neutral.

E.

Significant benefit

This factor weighs against relief when the requesting spouse

received a benefit in excess of normal support due to the understatement

or underpayment of tax. Id. § 4.03(e), 2013-43 I.R.B. at 402. If the

requesting spouse enjoyed the benefits of a lavish lifestyle, such as

purchasing luxury items or going on expensive vacations, this factor

weighs against relief. If the requesting spouse did not receive a

significant benefit from the understatement, this factor weighs in favor

of relief. See Butner v. Commissioner, T.C. Memo. 2007-136, 93 T.C.M.

(CCH) 1290. Nothing in the record suggests that Mrs. Soler enjoyed a

13

[*13] lavish lifestyle as a result of the understatements at issue, and

respondent concedes that Mrs. Soler did not receive any benefit beyond

having her income tax reduced by the erroneous items. This factor

weighs in favor of relief.

F.

Compliance with income tax laws

If the requesting spouse remains married to the nonrequesting

spouse and continues to file joint returns with the nonrequesting spouse

after filing for relief, this factor is neutral if the subsequent joint returns

comply with income tax laws, and it will weigh against relief if the

subsequent joint returns do not comply.

Rev. Proc. 2013-34,

§ 4.03(2)(f)(ii), 2013-43 I.R.B. at 402–03. Mrs. Soler filed joint returns

with Mr. Soler for tax years 2016 through 2020, but the record is silent

with respect to the compliance level of those returns. We will treat this

factor as neutral.

G.

Mental or physical health

This factor weighs in favor of relief if the requesting spouse was

in poor physical or mental health at the time the returns to which the

request for relief relates were filed, or at the time he or she requested

relief. Id. § 4.03(2)(g), 2013-43 I.R.B. at 403. If the requesting spouse

was not in poor mental or physical health, this factor is neutral. Id.

Mrs. Soler was not in poor mental or physical health at the time the

returns for 2012, 2013, 2014, and 2015 were filed, nor was she in poor

health when she requested relief from joint and several liability. This

factor is neutral.

III.

Conclusion

After weighing the above factors and considering all of the

attendant facts and circumstances, we are not persuaded that it would

be inequitable to hold Mrs. Soler liable for the 2012, 2013, 2014, and

2015 tax liabilities. We conclude that the knowledge factor weighs

heavily against granting relief. The significant benefit factor weighs

slightly in favor of relief. While we do not base our decision on a simple

tally of the factors, we conclude that five factors are neutral, one weighs

slightly in favor of relief, and one weighs strongly against relief. After

considering all the relevant facts and circumstances, we conclude that

Mrs. Soler is not entitled to relief under section 6015(b) or (f).

14

[*14] We have considered all of the parties’ arguments and, to the

extent they are not discussed herein, find them to be irrelevant, moot,

or without merit.

Decision will be entered for respondent.