UNITED STATES TAX COURT

T.C. Memo. 2012-91

UNITED STATES TAX COURT

RAJALAKSHMI SRIRAM, Petitioner v.

COMMISSIÓNER OF INTERNAL REVENUE, Rëspondent

Docket No. 11776-08.

Filed March 27, 2012.

Jonathan P. Decatorsiliith and Ariel Frbacher (specially recognized), for

pe itioner.

Mayer Y. Silber, Grubert R. Markley, and Robert M. Romashko, for

re pondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

LARO, Judae: Petitioner petitioned the Court under section 6015(e)(1) in

re ponse to a notice of determination denyiiig her request for relief from joint and

SEVED MAR 2 7 2012

-2several liability under section 6015.1 The issue to be decided is whether petitioner

is entitled to equitable relief from joint and several liability under section 6015(f)

for tax related to a-2000 joint Federal income tax return.2 We hold she is not.

FINDINGS OF FACT

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

and accompanying exhibits are incorporated herein by this reference. Petitioner

resided in Illinois when she petitioned the Court.

Petitioner was born in 1960 in Kumbakonam, India. She graduated from a

high school in India and has taken some college-level courses in the United States.

Although petitioner's native language is Tamil, she began taking English classes

in India in the first grade. She first emigrated from India to the United States in

1983, at which time she settled with her uncle's family in the suburbs of Chicago,

Illinois (Chicago). .

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

Code, and Rule References are to the Tax Court Rules of Practice and Procedure.

2Although petitioner asserts in the petition that she is entitled to relief under

sec. 6015(c), we deem that issue conceded because it was not addressed at trial or

on brief. See Nicklaus v. Commissioner, 117 T.C. 117, 120 n.4 (2001) In any

event, petitioner is ineligible for relief under that subsection because she seeks

relief from an underpayment of tax and not an assessed deficiency. See sec.

6015(c)(1); Hopkins v. Commissioner, 121 T.C. 73, 88 (2003).

After living and working in the United States during 1983 and through part

of 1985, petitioner returned to India to marry Krishnaswami Sriram (Dr. Sriram) in

a marriage arranged by their families. Petitioner and Dr. Sriram (collectively, the

Srirams) have been married for more thanF25 years, and they were married as of

the date of the trial in this case. The Srirams have three children who, at the time

of the trial in this case, were 18, 22, and 23 years old, respectively. At least two of

those children are college educated.

Over the years, petitioner has demonstrated at least a basic proficiency in

the English language. She earned a letter grade of B in a data processing and word

p ocessing course taught in English, and she received passing grades in English-

t ught courses at lÜIoraine Valley Community College. Between 1983 and 1985

she worked at the State Bank of India, as an office employee with Makita Corp.,

aüd as an attorney's assistant. Petitioner speaks to her children in Tamil, and she

uÃ1derstands them when they speak to her in English. Although petitioner used a

Tamil-English translator at trial, she often (but not always) understood questions

asked of her in English, and she responded mostly in English during direct and

cross examination.

The Srirams lived in India until approximately 1987 when they moved to

tlie United States. Dr. Sriram worked as a medical doctor, and petitioner

established herself as the family's homemaker. By 2000 Dr. Sriram practiced

medicine through a limited liability company and a sole proprietorship which

generated aggregate gross income of more than $1 millign in that year. Petitioner

did not work outside the home from 1988 through at least 2000.

The Srirams had accumulated financial wealth throughout their marriage,

though the;record is scant concerning their finances at the time of trial. In 1995

they purchased a home in Lake Forest, Illinois, for $600,000 (Lake Forest

residence), and by 2000 they jointly owned that property free and clear of any

mortgages. In 2000 they jointly owned rental properties in Arlington, Illinois, and

Peekskill, New York (Peekskill property) (collectively, rental.properties).3 They

jointly owned a certificate of deposit (CD) which was worth approximately $3.3

million in 2000. In 2007 they purchased a car for $30,000 cash.

.

Dr. Sriram controlled most (if not all) of the family's finances at all relevant

times. Petitioner purchased household items such as groceries using joint funds or

credit cards. She was not aware of the family's credit card balances, but charges

. 2 3Although petitioner testified at trial that she may or may not have owned

the Peekskill property, we conclude that she did on the basis of statements in the

notice of determination that she reported rental income from that.property on her

Federal income tax returns for 2001 through 2005.

t those cards were always accepted. At Dr. Sriram's direction, petitioner handled

basic banking activities such as making deposits and withdrawals.

In or around November 2000 Dr. Sriram was indicted in the U.S. District

Court for the Northern District of Illinois for, in addition to other offenses,

criminal tax fraud for 1997 through 1999. He was subsequently enjoined from

p acticing medicine, and the Srirams' assets were frozen by court order. While the

record is clear that the United States seized certain assets belonging to the Srirams,

it is not clear as to which assets were seized or in what amounts. Neither the Lake

Forest residence nor the rental properties were seized by the United States, and

regardless of the seizure, the Srirams continued to receive financial assets in the

fárm of a monthly allowance apparently paid by Dr. Sriram's attorneys.

In October 2001 the Srirams signed and filed a joint 2000 Federal income

tax return (2000 return) that a certified public accountant had prepared. The 2000

return reported net business income of $1,345,965 from Dr. Sriram's medical

practice, interest income of $188,366 from joint bank accounts, and total rental

income of $23,090. It also reported tax due of $656,491 and an addition to tax for

f iling to pay estimated income tax of $33,507. The Srirams remitted.$100 with

the 2000 return. They also attached a statement explaining that they could not pay

the tax due because a court had ordered their assets frozen and prohibited Dr.

-6Srirani from practicing medicine. . The statement reported that each of the Srirams

was the subject of an ongoing criminal investigation and that they had provided

thousands of pages of documents relating to the Srirams' personal finances and

Dr. Sriram's medical practice.

Petitioner filed with respondent a Form 8857, Request for Innocent Spouse

Relief, seeking equitable relief under section 6015(f) for 1997 through 2000f An

affidavit attached to the Form 8857 and stipulated by the parties offered numerous

reasons why petitioner did not believe that divorcing Dr. Sriram was a tiable

alternative. The affidavit also asserted that petitioner and her children would

suffer financial hardship if she was not granted innocent spouse relief.

On February 12i2008, respondent's Office of Appeals (Appeals) issued to

petitioneba notice of determination denying her request for rèlief under section

6015(b), (c), and (f). Appeals explained its decision in a Form 886-A, Explanation

of Items,5 and evaluated petitioner's equitable relief claim under the guidelines.set

Petitioner filed with respondent two Forms 8857; the first dated June 24,

2002, and the second dated July 15, 2004. The parties agree that the request was

timely, and we refer to the later filed Form 8857 for purposes of our discussion.

5The notice of determination stated that Appeals explained its decision in an

enclosed Form 5278, Appeals Audit Statement. However, the parties stipulated

that Appeals explained its determination in Form 886-A. We consider the notice

of determination's reference to Form 5278 a typographical error.

forth in Rev. Proc. 2003-61, 2003-2 C.B. 296. In relevant part, Appeals found that

petitioner would not suffer economic hardship if she was held liable for the unpaid

tax. In support thereof, an individual in Appeals (settlement officer) examined the

Srirams' financial records.

The settlement officer noted that the Srirams earned interest income in each

of the years 1999 through 2005 of $48,326, $187,700, $97,925, $31,461, $18,169,

$18,893, and $36,134, respectively. The settlement officer also found that, in each

of the years 2000 through 2004, the Srirams deposited cash (net of interaccount

transfers and nontaxable items) of $37,765, $89,154, $143,037, $130,421, and

$114,745, respectively. The settlement officer determined that in addition to

various money market, retirement, and bank accounts, the Srirarì1s owned a CD

ith a 2004 yearend balance of $1,253,825. Finally, the settlement officer found

that the rental properties generated net rental income or loss (inclusive of rental

expenses and depreciation expense) of $23,090, $21,120, $3,093, $6,166,

($7,817), and $1,485 in each of the years 2000 through 2005, respectively.

For each of the years following Dr. Sriram's indictment, petitioner filed

F deral income tax returns electing married filing separately status. She has

mostly been in compliance with her Federal income tax obligations since 2000,

though we note that the Form 886-A stated that she filed her 2001 Federal income

-8tax return late.. Petitioner petitioned the Court, and a trial of this case was held in

Chicago on May 19, 2011. At the time of trial, petitioner was employed with the

Circuit Court of Cook County (Cook County), earning an annual salary of

$33,000. She and Dr. Sriram resided in separate areas of the same house.

OPlNION

A husband and wife generally may elect to file a joint Federal income tax

return. Sec. 6013(a). After making such an election, each spouse becomes jointly

and severally liable for the tax due on the spouses' aggregate income. See sec.

6013(d)(3). An individual who has made a joint return may elect to seek relief

from joint and several liability under subsections (b), (c), and (f) of section 6015.

Sec. 6015(a), (f). Where the Commissioner denies a requesting spouse equitable

relief under section 6015(f), that individual may petition the Court to determine

the appropriate relief available, as petitioner has done. Sec. 6015(e)(1)(A). We

determine whether a taxpayer is eñtitled to equitable relief de novo, see id.; Porter

v. Commissioner, 132 T.C. 203, 210 (2009), and petitioner bears the burden of

proving her entitlement to such relief, see Rule 142(a).6

6Respondent asserts on brief that, notwithstanding our decision in Porter v.

Commissioner, 132 T.C. 203 (2009), the settlement officer's determination should

be reviewed for abuse of discretion. In Porter, a Court-reviewed Opinion, we held

that the scope and standard of our review in cases requesting equitable relief from

(continued...)

-9A requesting spouse who is unable to qualify for relief under section

6015(b) or (c) may nonetheless avoid joint and several liability if, taking into

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

liable for any unpaid tax or deficiency. Sec. 6015(f)(1). Because petitioner is

ineligible for relief under subsection (b) or (c) of section 6015, we decide only

whether she is entitled to relief under section 6015(f). We hold she is not.

Pursuant to his grant of authority under section 6015(f), the Commissioner

has fashioned guidelines for determining whether an individual qualifies for

equitable relief in Rev. Proc. 2003-61, supra.7 The Court considers these

gµidelines in the light of the attendant facts and circumstances to determine

6(...continued)

joint and several income tax liability are de novo. Id. at 210. We see no reason to

disturb our holding in Porter, and we adopt the reasoning therein insofar as we

r view petitioner's entitlement to equitable relief de novo.

7On January 5, 2012, respondent released Notice 2012-8, 2012-4 I.R.B. 309,

concerning a proposed revenue procedure that, if finalized, would revise the

factors to be examined in determining the requesting spouse's claim for equitable

relief under sec. 6015(f). Among other changes, the proposed revenue procedure

expands the effect of the nonrequesting spouse's abuse and/or financial control on

a requesting spouse's entitlement to equitable relief. Id. We continue to apply the

factors in Rev. Proc. 2003-61, 2003-2 C.B. 296, in view of the fact that the

proposed revenue procedure is not final and because the comment period under the

notice only recently closed. Because our holding does not turn on any single

factor as revised in the proposed revenue procedure, we call attention to the effect

(i any) of a revised factor only where we deem it necessary to do so for clarity.

-10whether equitable relief is appropriate, but is not bound by them. See Pullins v.

Commissioner, 136 T.C. 432, 438-439 (2011); McGhee v. Commissioner, T.C.

Memo. 2010-259, 100 T.C.M. (CCH) 473, 474 n.8 (2010). The guidelines begin

by establishing threshold requirements that, the Commissioner contends, must be

satisfied before an equitable relief request should be considered. See Rev. Proc.

2003-61, sec. 4.01, 2003-2 C.B. at 297-298. They next set forth certain safe

harbor conditions which, if met, may result in a grant of equitable relief. See id.

sec. 4.02,.2003-2 C.B. at 298. Finally, they provide a nonexclusive list of factors

that should be considered in determining whether section 6015(f) relief is proper.

See id. sece4.03, 2003-2 C.B. at 298-299.

I.

Threshold Conditions

Rev. Proc. 2003-61, sec. 4.01, sets forth seven threshold conditions that a

requesting spouse must satisfy before a request for relief under section 6015(f)

will be considered. Those conditions are: (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 requesting spouse

applies for relief no later than two years after the date of the Internal Revenue

Service's first collection activity with respect to the taxpayer that occurs after July

-1122, 1998;8 (4) the spouses did not transfer assets between themselves 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 file or fail to file

tl e return with fraudulent intent; and (7) absent certain enumerated exceptions, the

táx liability from which the requesting spouse seeks relief is attributable to an item

of the nonrequesting spouse.

Respondent concedes that petitioner meets the first six conditions, but

asserts that she only partially satisfies the last enumerated condition; i.e., that the

liability from which relief is sought is attributable to an item of the nonrequesting

spouse. According to respondent, 50% of the interest income from the Srirams'

jointly held bank accounts and of the rental income from the rental properties is

attributable to petitioner. Petitioner, on the other hand, asserts that those items are

attributable solely to Dr. Sriram because they were purchased or funded with

iEcome from his medical practice.9 Although petitioner does not explicitly claim

8Notice 2012-8, sec. 3.01, 2012-4 I.R.B. at 311, eliminates the two-year

deadline to request equitable relief and replaces it with the period of limitations

provided by sec. 6502 (relating to collection) or sec. 6511 (relating to filing a

claim for credit or refund). Our analysis is unchanged by this revision given the

parties' stipulation that petitioner's request was timely.

'As discussed infra p. 23, petitioner asserts that Dr. Sriram abused her

physically at some point between 1995 and 2000. She does not assert, nor do we

(continued...)

-12entitlement to the nominal ownership exception contained in Rev. Proc. 2003-61,

sec. 4.01(7)(b), 2003-2 C.B. at 297, we understand her to do so according to the

context of her argument.

Rev. Proc..2003-61,,sec. 4.01(7)(b), creates a rebuttable presumption that an

item titled in the requesting spouse's name is attributable to that spouse. Through

an example, the revenue procedure provides that the presumption of ownership

may be rebutted by showing (1) fraudulent conduct on the part of the

nonrequesting spouse with respect to the requesting spouse, (2) that the requesting

spouse did not fund the disputed item, and (3) that the requesting spouse did not

hold himself or herself out as owning the disputed item. See id. We are not

persuaded that petitioner has rebutted the presumption of ownership.

9(...CÓntinued)

conclude; that the alleged abuse made her fearful of retaliation such that she would

not have questioned the treatment of items reported on the 2000 return and

attributable to her. See Thomassen v. Commissioner, T.C. Memo. 2011-88, 101

T.C.M. (CCH) 1397, 1405 (2011); Rev. Proc. 2003-61, sec. 4.01(7)(d), 2003-2

C.B. at 298. The Commissioner now provides that equitable relief may be granted

where the requesting spouses establishes that he or she was the victim of abuse

before the return was signed even though the underpayment of tax;is attributable,

in part or in full, to an item of the requesting spouse. See Notice 2012-8, sec.

4.02(d), 2012-4 I.R.B. at 312. Petitioner would not be eligible for relief under the

proposed revenue procedure because, as we find, she has failed to meet her burden

of proving that she was a victim of abuse.

-13First, petitioner did not prove that Dr. Sriram acted fraudulently towards her

with respect to the rental or interest income reported on the 2000 return. Second,

she failed to prove that she did not contribute to the purchase of the rental

properties or otherwise fund the jointly held bank accounts through, for example,

her personal savings or familial gifts. Third, she did not prove her lack of

involvement in managing the rental properties or in performing banking activities

with respect to the bank accounts. Petitioner has failed to persuade us that income

relating to the rental properties and the bank accounts is not attributable to her.

We hold that petitioner is not eligible for equitable relief from joint and several

liability on the underpayment of tax arising from items allocable to her; namely,

her share of the rental and interest income, $105,728.i° We next decide whether

petitioner is entitled to relief from joint and several liability on the portion-of the

underpayment allocable to Dr. Sriram; namely, all of the income from his medical

pfactice, $1,345,965, and one-half of the rental and interest income, $105,728.

II.

Safe Harbor Conditions

Where the threshold conditions are met, equitable relief with respect to an

u derpayment of tax reported on a joint return may be granted where each ofthree

1°Calculated as one-half of the interest income ($188,366 divided by 2, or

$94,183), plus one-half of the rental income ($23,090 divided by 2, or $11,545).

-14safe harbor conditions is met. These condïtions are: (1) when the relief is

requested,-the requesting spouse is no longer married to or is legally separated .

from the nonrequesting spouse or has not been a member of the same household as

the nonrequesting spouse at any time during the 12 months before the request for

relief; (2) when the requesting'spouse signed the joint return, he or she did not

know or have reason to.know that the nonrequesting spouse would not pay the tax

liability; and (3) the requesting spouse will suffer economic hardship if relief is

not granted. Rev. Proc. 2003-61, sec. 4.02. As we discuss below, petitioner fails

to meet any of these safe harbor conditions. .

III.

Facts and Circumstances Test

Our statutory charge under section 6015 is to determine whether a taxpayer

is entitled to equitable relief on the basis of all the facts and circumstances. We

review a claim for.equitable relief under section 6015(d) de novo. See Porter v.

Coniiñissioner, 132 T.C. at 210. Where a requesting spouse satisfies each of the

threshold requirements but fails to satisfy the safe harbor conditions under Rev.

Proc. 2003-61, sec. 4.02, the requesting spouse is nevertheless eligible for

equitable relief under section 6015(f) if, taking into account all of the facts and

circumstances, it is inequitable to hold the requesting spouse liable for an

underpayment. Sec. 6015(f). Rev. Proc. 2003-61, sec. 4.03, 2003-2 C.B. at 298-

-15299, lists eight nonexclusive factors to consider in determining whether it is

inequitable to hold the requesting spouse liable for all or any part of the unpaid

táx. No single factor is determinative; rather, all factors are weighed in the light of

tlhe surrounding facts and circumstances to determine whether equitable relief is

appropriate. Id. sec. 4.03(2).

1.

Marital Status

The first factor to be weighed is whether the requesting spouse is legally

separated, living apart, or divorced from the nonrequesting spouse. Id. sec.

4:03(2)(a)(i). The Srirams have been married continuously since 1985, and they

håve resided together in the same house. The fact that petitioner and Dr. Sriram

liyed in separate areas of the same residence is, despite petitioner's insistence,

iNconsequential because a husband and wife who reside in the same house are

considered members of the same household. Cf. sec. 1.6015-3(b)(3)(ii), Income^

Tax Regs. (relating to proportionate relief under section 6015(c)); Notice 2012-8,

sec. 4.03(2)(a)(iv), 2012-4 I.R.B. at 313 (spouses are considered members of the

sáme household for any period in which they maintain the same residence). This

factor weighs against relief.

"Unlike Rev. Proc. 2003-61, sec. 4.03(2)(a)(i), 2003-2 C.B. at 298, the

Commissioner now asserts in Notice 2012-8, sec. 4.03(2)(a), 2012-4 I.R.B. at 313,

(continued...)

-162.

. Economic Hardship

The second factor for consideration is whether the requesting spouse would

suffer economic hardship were relief not granted. Rev. Proc. 2003-61, sec.

4.03(2)(a)(ii), 2003-2 C.B. at 298. Our analysis of whether such economic

hardship would occur is directed to the taxpayer's economic circumstances at the

time of trial. Porter v. Commissioner, 132 T.C. at 211 n.7. . Petitioner claims,

without legal or financial analysis, that making her liable for the 2000 tax will

"paralyze her financially and render her insolvent for the rest of her life." We are

not persuaded.

Ecohomic hardship, for purposes of section 6015(f), occurs where the

requesting spouse is unable to pay his or her reasonable basic living expenses if

held liable for the tax owed. See sec. 301.6343-1(b)(4)(i), Proced. & Admin.

Regs. A taxpayer's ability to pay basic living expenses is determined by

considering, among other factors: the individual's age, employment status and

history, ability to earn, and number of dependents; the amount reasonably

necessary for food, clothing, housing, medical expenses, transportation, and

current tax payments; the cost of living in the geographic area in which the

(...continued)

that the marital status factor is neutral where a husband and wife are still married.

-17taxpayer resides; and any extraordinary circumstances. See sec. 301.6343-

1(b)(4)(ii), Proced. & Admin. Regs. While an inquiry into the reasonableness of

basic living expenses considers the individual taxpayer's unique circumstances, it

dþes not require an allowance to maintain affluent or luxurious standards of living.

Sg sec. 301.6343-1(b)(4)(i), Proced. & Admin. Regs.

Petitioner was employed by Cook County earning $33,000 per year when

the trial of this case was held. Each of her children is older than 18 years of age,

and at least two of them are college educated. Although the record concerning her

financial status at the time of trial is inadequately developed, we conclude that

petitioner was able to meet her basic living expenses.4 The Lake Forest residence

and each of the rental properties were owned free and clear of any encumbrances.

In 2005, the most current year for which financial data was presented, petitioner

earned interest income of $36,134 and net rental income of $1,485. She also

owned a CD with a 2004 yearend balance of more than $1.2 million. The fact that

"Petitioner failed to prove that she did not own the Lake Forest residence or

the rental properties or that the CD was not available for her use. In the absence of

súch evidence, we presume that it did not exist or that it was not favorable to her

pþsition. See Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165

(1946) ("The rule is well established that the failure of a party to introduce

etidence within his possession and which, if true, would be favorable to him,

gives rise to the presumption that if produced it would be unfavorable."), aff'd,

162 F.2d 513 (10th Cir. 1947). Moreover, other than a claim of general economic

hardship, the record does specify the amount of petitioner's basic living expenses.

-18the Srirams paid cash for a new car in 2007 also shows, we believe, that they were

able to meet their basic living expenses. Whereas petitioner relies upon her

testimony to prove economic hardship, we do not, because her testimony is

uncorroborated notwithstanding the fact that the Srirams presented thousands of

pages of financial records in connection with their criminal investigation. This

factor weighs against relief.

3.

Knowledge or Reason To Know .

The thifd factor in the case of an underpayment of tax contemplates whether

the requesting spouse knew or had reason to know that the nonrequesting spouse

would not pay;the income tax liability when the return was signed." See Toppi v.

Commissioner, T.C. Memo. 2008-156, 95 T.C.M. 1612, 1614 (2008). Petitioner

"The Commissioner now states in Notice 2012-8, sec. 4.03(2)(b), 2012-4

I.R.B. at 313, that the economic hardship factor should be considered neutral

where denýing relief from joint and several liability will not result in economic

hardship to the requesting spouse.

"Under Notice 2012-8, sec. 4.03(2)(c)(ii), 2012-4 I.R.B. at 314, the

knowledge:factor weighs in favor of relief where the requesting spouse, because of

abuse and fear of retaliation, was unable to question the treatment of items on the

return or the payment of tax due or challenge the nonrequesting spouse's

assurances of payment. Also under the proposed revenue procedure, abuse may

render the significant benefit factor neutral. See Notice 2012-8, sec. 4.03(2)(e),

2012-4 I.R.B. at 314. In failing to prove abuse by a preponderance of the

evidence, see infra p. 23, petitioner may not successfully assert that abuse negates

her knowledge that Dr. Sriram might not pay the tax due or the significant benefit

she received from failing to pay the tax due.

-19argues that she had "no reason" to believe that her husband would not pay the

liability reported on the 2000 return. We disagree.

We have interpreted the knowledge requirement in an underpayment case as

focusing on whether the taxpayer knew that his or her spouse would not pay the

tax within a reasonably prompt time after filing the joint return. See Banderas v.

Commissioner, T.C. Memo. 2007-129, 93 T.C.M. (CCH) 1247, 1251 (2007); cf.

Notice 2012-8, sec. 4.03(2)(c)(ii), 2012-4 I.R.B. at 314. Attached to the.2000

return was a statement acknowledging that the Srirams were each subjects of an

ongoing criminal investigation and stating that they could not pay the tax due until

court-frozen assets were released to them or until Dr. Sriram was allowed to

practice medicine. We look to that attachment, which was stated in plain and

simple terms, as persuasive circumstantial evidence that petitioner knew or had

réason to know that Dr. Sriram would not pay the unpaid tax within a reasonably

short time. Such nonpayment might occur if, for example, Dr. Sriram could not

practice medicine or the frozen assets were used for restitution. This factor weighs

against relief.

4.

Nonrequesting Spouse's Legal Obligation

The fourth factor for consideration is whether the nonrequesting spouse was

under a legal obligation to pay the outstanding tax liability under a divorce decree

-20or other agreement. The record does not show Dr. Sriram was legally obligated

under a divorce decree or other contractual arrangement to*pay the tax liability on

the 2000 return. This factor is neutral.

5.

Significant Benefit

The fifth factor to be weighed is whether the requesting spouse benefited

from the unpaid income tax liability beyond normal support. See Rev. Proc. 200361, sec. 4.03(2)(a)(v), 2003-2 C.B. at 299. A significant benefit may be direct or

indirect.. Sec. 1.6015-2(d), Income Tax Regs. In failing to pay their 2000 tax

liability through withholding or estimated tax payments, the Srirams were able to

repay the mortgage on the Lake Forest residence, maintain the rental properties,

and fund the CD in part; In not paying the 2000 liability from 2001 through 2005,

the Srirams earned $202,582 of interest income ($97,925 in 2001; $31,461 in

2002; $18,169 in 2003; $18,893 in 2004; and $36,134 in 2005). They maintained

the rental properties throughout those years and earned $24,047 of rental income

therefrom ($21,120 in 2001; $3,093 in 2002; $6,166 in 2003; ($7,817) in 2004;

and $1,485 in 2005). They purchased a car for $30,000 in cash. Finally, at least

two of petitioner's children attended college, though the record is not clear

whether petitioner or Dr. Sriram contributed money to either child's education.

-21

W conclude that petitioner received a significant benefit.from the unpaid income

ta liabilities. Accordingly, this factor weighs against relief.

6.

Compliance With Tax Laws

The sixth tax compliance factor wei hs in favor of relief if the requesting

spouse has made a good-faith effort to comply with income tax laws in years after

the year for which relief is requested. See Rev. Proc. 2003-61, sec. 4.03(2)(a)(vi).

R spondent states on brief that petitioner v as in compliance with the Federal tax

la s in the years after 2000 and that this fa tor should be construed as neutral."

In recent caselaw we have consistently recógnized that a taxpayer's good-faith

effort to comply with income tax laws in the years following the year for which

relief is requested is a factor weighing in favor of relief. See, e.g., Pullins v.

Còmmissioner, 136.T.C. at 452; Haggerty v. Commissioner, T.C. Memo. 2011-

284, 102 T.C.M. (CCH) 563, 566 (2011); Hiramanek v. Commissioner, T.C.

Memo. 2011-280, 102 T.C.M. (CCH) 546, j550 (2011); Karam v. Commissioner,

Respondent states on brief that "there is no evidence" of petitioner's

noncompliance with the Federal tax laws since 2000. We note that the Form 886A tates that petitioner filed her 2001'Federal income tax return late. The scant

re ord before us does not include an Internal Revenue Service account transcript

or ny evidence that allows us to reconcile[these inconsistent statements. In any

ev nt, we need not do so because we treat respondent's statement on brief as a

co cession of petitioner's compliance. Red Estate of Johnson v. Commissioner,

T.C. Memo. 2001-182, 82 T.C.M. (CCH) 206, 234 (2001) (and cases cited

thÄreat), aff'd, 129 Fed. Appx. 597 (11th Cir. 2005).

-22T.C. Meino. 2011-230, 102 T.C.M. (CCH)311, 315 (2011): Indeed, the

Commissioner now contends in Notice 2012-8, sec. 4.03(2)(f)(3), 2012-4 I.R.B. at

314-315, that full compliance with the tax laws weighs in favor of relief and that

good-faith partial compliance should be considefed neutral. Wè conclude that this

factor favors relief.

7.

Abuse

Abusive behavior by the nonrequesting spouse toward the requesting spouse

is a factor favoring relief. Rev. Proc. 2003-61, sec. 4.03(2)(b)(i), 2003-2 C.B. at

299. Abuse may be physical or mental. Nihiser v. Commissioner, T.C. Memo.

2008-135, 95 T.C.M. (CCH) 1531, 1536-1537 (2008). Allegations of abuse

require substantiation, or at a miñimum, specificity. See e.g., Fox v.

Commissiòner, T.C. Memo. 2006-22, 91 T.C.M. (CCH) 731, 734 (2006)

(accepting a requesting spouse's claim of abuse where corroborated by a police

incident report); Knorr v. Commissioner, T.C. Memo. 2004-212, 88 T.C.M. (CCH)

273, 278 (2004) (deeming the abuse factor neutral where the requesting spouse

provided.uncorroborated and generalized claims of physical and emotional abuse);

Collier v. Commissioner, T.C. Memo. 2002-144, 83 T.C.M. (CCH) 1799, 1809

(2002)(finding absence of abuse without specífic details).

-23Abuse is a genuine reason to grant relief from joint and several liability, and

we are sensitive to the legal issues and the emotions related thereto. Hovëever, we

are not persuaded by petitioner's allegation of abuse that is unaccompanied by

d tails and corroboration. Petitioner alleges that Dr. Sriram assaulted her on one

occasion between 1995 and 2000. She provided no details of this alleged assault

and did not offer corroborating evidence to support her statement. She claims to

have reported the event to the Lake Forest police, but she has not offered a police

iñeident report and cannot identify the date when this allegedly happened. To

carry one's burden of proof on the issue of abuse, it is helpful to have some

corroborating evidence or substantiation. Cf. Thomassen v. Commissioner, T.C.

Memo. 2011-88, 101 T.C.M. (CCH) 1397, 1405 (2011) (psychological abuse

found where supported with testimony that one child was driven to attempt suicide

while another child's friends urged the taxpayer to find shelter for herself and her

younger children). Petitioner has none. She claims that certain cultural factors

restrain her from buttressing her testimony, but at the end of the day we have only

her vague testimony. Making an allegation of even a single act of physical abuse

s serious enough, yet we decline to confirm its accuracy by petitioner's self-

serving testimony alone. We consider this factor neutral.

-248.

Mental or Physical Health

The final enumerated factor focuses on whether the requesting spouse was

in poor mental or physical health on the date she signed the tax return or when

relief.was requested. Rev. Proc. 2003-61, sec. 4.03(2)(b)(ii). Where the

requesting spouse is not in poor mental or physical health, this factor is considered

neutral. Sen iÅ sec. 4.03(2)(b). Petitioner does not claim that she was in poor

mental or physical health when she signed the 2000 return or when she requested

equitable relief. This factor is neutral.

9.

Conclusion

Of the factors listed in Rev. Proc. 2003-61, sec. 4.03, one favors relief

(compliance.with tax laws), four weigh against relief (marital status, economic

hardship, knowledge or reason to know, and significant benefit), and.three are

neutral (legal obligation, physical abuse, and mental or physical health). On the

basis of our analysis as informed by Rev. Proc. 2003-61, supra, we conclude that

petitioner is not entitled to equitable relief.- After applying Notice 2012-8, sec.

4.03, two previously negative factors (marital status and economic hardship)turn

neutral. This rebalance of factors, however, does not alter our perception that

petitioner is not entitled to equitable relief.

-25To be sure, petitioner realized a significant economic benefit from failing to

pa the 2000 Federal tax liability, and she knew or had reason to know that Dr.

Sriram could not fully pay the tax within a reasonable time after signing the return.

In that respect, the record does not favor her. Had petitioner established abuse by

a preponderance of the evidence, which she did not, the last two negative factors

(knowledge or reason to know and significant benefit) might have tipped the

scales of equity in her favor. But she did not prove abuse and may therefore not

be held harmless for the 2000 tax liability. After balancing the record as a whole

and with due consideration of the equitable considerations presented, we hold that

petitioner is not entitled to relief from joint and several liability under section

6015(f). In so deciding, we have considered all of petitioner's arguments for a

co trary holding, and to the extent not discussed herein we conclude they are

irrelevant, moot, or without merit.

To reflect the foregoing,

Decision will be entered

for respondent.