United States Tax Court

United States Tax Court

T.C. Memo. 2022-55

JAN E. POCOCK,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket Nos. 2558-17, 23569-17L.

Filed June 6, 2022.

—————

Jan E. Pocock, pro se.

Miriam C. Dillard and A. Gary Begun, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

VASQUEZ, Judge: In docket No. 2558-17, petitioner seeks review

of respondent’s determination that she is not entitled to section 6015

relief with respect to joint federal income tax returns filed by her former

spouse for taxable years 2006 and 2007. 1 In docket No. 23569-17L,

petitioner seeks review of a determination by the Internal Revenue

Service (IRS) Office of Appeals (Appeals) denying her section 6015 relief

and upholding a notice of intent to levy for taxable year 2008. We

consolidated these cases for trial, briefing, and opinion.

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.

We round all monetary amounts to the nearest dollar.

Served 06/06/22

2

[*2] The issue for decision is whether petitioner qualifies for relief

from her 2006, 2007, and 2008 federal income tax liabilities under

section 6015(f). We resolve this issue in petitioner’s favor.

FINDINGS OF FACT

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

incorporate the First Stipulation of Facts and accompanying exhibits by

this reference. Petitioner resided in Florida when she filed her

Petitions.

Petitioner’s marriage

In 1972 petitioner graduated from Michigan State University

with a degree in art education and returned to her hometown in the

suburbs of Detroit, Michigan. There she met Douglas Pocock, a Vietnam

veteran and aspiring salesperson. They were married in 1973. They

have two children: Hailey DeRosa (Hailey), born in 1978, and Brett

Pocock (Brett), born in 1980.

In the 1980s Mr. Pocock started a roofing installation business in

Michigan with the help of petitioner’s brother, Jack Givens. Mr. Givens

owned a manufacturing business that made the roofing material that

Mr. Pocock installed. Mr. Pocock’s business was initially successful but

then fell into arrears. Because these arrears affected Mr. Givens’s

business, relations between the brothers-in-law soured.

Finding herself in the middle of the dispute, petitioner sought to

get a better understanding of the situation. One day, while Hailey and

Brett were at school, petitioner confronted Mr. Pocock and pressed him

for answers about his business problems. Mr. Pocock responded by

picking up an antique glass vase, a gift of petitioner’s grandmother, and

hurling it at petitioner. She ducked out of the way, but the shattered

vase damaged her favorite painting and dented their wall.

As Mr. Pocock stormed out of the house, petitioner realized that

pressing her husband about finances was a line she could not cross

without jeopardizing her safety. However, she did not consider divorce.

Having been raised in the Christian faith, petitioner had a longstanding

belief in the institution of marriage. She also believed a two-parent

household would benefit her children.

3

[*3] After his roofing installation business collapsed, Mr. Pocock and

petitioner pursued a franchising opportunity involving window blinds.

After that venture failed in 1986, the Pocock family moved to Florida.

Petitioner’s new life in Florida started favorably. In 1987 she

secured a job as a substitute schoolteacher and became a full-time art

teacher the following year. Mr. Pocock started a construction cleanup

business and secured a contract with Disney Parks. Although Mr.

Pocock was still prone to outbursts in their rental home, petitioner took

comfort in their improving financial situation. Just as things were

looking up, however, Mr. Pocock’s construction cleanup business

collapsed. In 1990 he left petitioner and moved to Daytona Beach.

Petitioner and Mr. Pocock had little contact for the next two years.

Petitioner and Mr. Pocock reconnected in 1992 after he agreed to

participate in Christian counseling. Despite their marital problems,

petitioner continued to believe a two-parent household would benefit her

children. Newly reunited, the Pocock family moved into another rental

home. Over the next few years, Mr. Pocock pursued various real estate

ventures while petitioner worked as a schoolteacher.

The Pocock household was often tense, especially when the family

was experiencing financial stress. During those times, questioning or

disturbing Mr. Pocock could result in an explosive reaction. As Brett

recounted at trial: “You didn’t poke the bear. You learned how to avoid

the situation.” When family members failed to abide by that strategy,

“bad things would happen.” On several occasions, Brett suffered

physical abuse at the hands of his father.

Mr. Pocock also dominated conversations during family meals

and other gatherings. If a family member expressed a dissenting

viewpoint, he became verbally abusive—sometimes, in front of

household guests. Mr. Pocock was also verbally abusive to Marion

Givens, petitioner’s mother. On one occasion, he harangued Mrs. Givens

when she told him a dish he had washed was still dirty. Over time,

petitioner stopped inviting guests over and felt increasingly isolated.

Mr. Pocock’s “money brokering” business

In 1997 petitioner left her teaching job to become a traveling

salesperson for a golf clothing company. Meanwhile Mr. Pocock spent

an increasing amount of time on the family computer. He told petitioner

he was using it to start a “money brokering” business. As petitioner

understood it, Mr. Pocock sought out investors and connected them with

4

[*4] medical professionals who were looking to sell or consolidate their

practices. According to Mr. Pocock, he was compensated by commission

at the closing of a deal.

It was difficult for petitioner to glean additional information

about Mr. Pocock’s “money brokering” business. When petitioner tried

to broach the subject with him, Mr. Pocock normally responded with

terse and dismissive answers. If petitioner continued to press him for

information, then Mr. Pocock turned to longwinded tangents that made

little sense to her. If she continued to question him, then Mr. Pocock

became violent, kicking household objects and throwing tools against

the wall. After such an outburst, he normally became remorseful and

acquiescent until the pattern repeated itself.

Home purchase

Mrs. Givens moved in with the Pocock family in 1999. With the

addition of Mrs. Givens, an 87-year-old widow with burgeoning health

issues, the Pococks’ rental home began to feel cramped. Unhappy with

her new living conditions, Mrs. Givens offered to help petitioner and Mr.

Pocock buy a new home. Soon thereafter, they contracted to purchase a

home in Winter Springs, Florida (Winter Springs home), for $228,990.

Mrs. Givens, petitioner, and Mr. Pocock financed the purchase

and closing costs via a mortgage of $108,950 and cash of $121,639. Of

the $121,639, Mrs. Givens contributed $110,190, and petitioner

contributed $11,449. Petitioner’s contribution came from a checking

account she maintained at Seminole Schools Federal Credit Union

(Seminole account). At the time, petitioner held the Seminole account

jointly with Mr. Pocock.

Petitioner, Mr. Pocock, and Mrs. Givens took title to the home on

February 28, 2000.

Bank accounts

Petitioner and Mr. Pocock opened a joint account at Huntington

Bank (Huntington) in 2000. In 2008 they opened several joint checking

and savings accounts at Washington Mutual Bank (WAMU), where Mr.

Pocock also maintained a personal checking account.

Mr. Pocock maintained tight control over his and petitioner’s

mail, which included statements for the Huntington and the WAMU

joint accounts. He installed an electronic contraption in the front of the

5

[*5] house that rang whenever someone opened the mailbox. Mr. Pocock

normally retrieved the mail immediately upon delivery. Petitioner, who

was afraid to enter her husband’s home office, did not review monthly

statements for the Huntington and the WAMU joint accounts.

Petitioner conducted her personal banking out of the Seminole

account. She regularly reviewed statements for that account.

Federal income tax refunds: 1995–2005

As described above, Mr. Pocock claimed to earn periodic

commissions from his “money brokering” business. In reality he was

fraudulently overstating his federal income tax withholdings and living

off the resulting refunds.

During their marriage Mr. Pocock prepared his and petitioner’s

joint income tax returns. Other than providing Forms W–2, Wage and

Tax Statement, and other tax-related information to her husband,

petitioner was not involved in the preparation of the joint returns.

Petitioner did not review or sign the returns before they were filed.

Having grown up in a household where her father handled the family’s

tax matters, petitioner was accustomed to relying on Mr. Pocock to

prepare the returns.

For taxable years 1995 through 2005, Mr. Pocock fraudulently

claimed large refunds on his and petitioner’s joint returns by overstating

his income and federal income tax withholdings. 2 Because the IRS did

not examine or otherwise correct those returns, respondent’s account

transcripts for those years show balances of zero. 3

On the joint returns for 1995 through 2005, Mr. Pocock reported

federal income tax and withholding as follows:

2 Respondent notified Mr. Pocock that petitioner was seeking relief from joint

and several liability and that he had a right to intervene in these cases. Mr. Pocock

did not exercise his right to intervene.

3 At trial respondent’s counsel stated that she had considered taking action to

reopen those years for examination. See § 6501(c)(1) (“In the case of a false or

fraudulent return with the intent to evade tax, the tax may be assessed . . . at any

time.”). However, she ultimately decided otherwise, explaining: “I don’t know if we

will collect what we have here [for taxable years 2006, 2007, and 2008]. It seemed like

. . . not a wise use of resources.”

6

[*6]

Tax year

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Filing date

9/4/1997

9/8/1997

2/3/1999

12/10/1999

5/4/2001

8/29/2002

12/30/2002

1/11/2005

1/14/2005

10/21/2005

1/17/2008

Total tax

$26,593

58,768

61,475

56,158

58,745

51,244

55,060

52,803

47,488

35,253

53,435

Withholding

$80,674

98,523

172,406

169,968

174,898

194,170

208,836

219,628

184,828

193,627

149,012

Overpayment

$54,081

39,755

110,931

113,810

116,153

142,926

153,776

166,825

137,340

158,104

95,577

After receiving the above-described joint returns, the IRS issued

Mr. Pocock and petitioner the following refund checks comprising the

reported overpayments and, for some years, interest: 4

Tax year

1997

1998

2000

2001

2002

2003

2004

2005

Issue date

4/30/1999

2/13/2000

9/27/2002

3/21/2003

4/8/2005

4/1/2005

7/14/2006

2/15/2008

Amount

$112,621

115,137

142,926

153,776

168,594

138,243

166,077

95,577

Petitioner, who believed that Mr. Pocock was earning periodic

commissions from his “money brokering” business, endorsed the refund

checks for 1997 and 2004. Occasionally she asked about the status of

their tax filings, but he never gave her a clear answer. When he showed

petitioner the 2004 refund check, Mr. Pocock explained that it was part

of his compensation for the closing of a deal. It was difficult for

petitioner to press him further on the subject since doing so could result

in a violent reaction.

Mr. Pocock signed petitioner’s name on the refund checks for

2000, 2001, 2002, 2003, and 2005 before depositing them into the

4 For taxable years 1995, 1996, and 1999, the record does not include copies of

refund checks or establish where they were deposited.

7

[*7] Huntington or the WAMU joint account. 5 The refund checks were

the Pocock family’s primary source of income, and Mr. Pocock used the

funds to cover the mortgage and other shared living expenses, home

improvements, tuition for Brett, furniture, and one cruise trip.

Although she did not review statements for the Huntington and the

WAMU joint accounts, petitioner was aware Mr. Pocock was making

those payments.

When Mr. Pocock’s and petitioner’s funds ran low, Mrs. Givens

covered the bulk of the family’s living expenses.

Estate theft

In March 2004 Mr. Pocock’s mother, Virginia Pocock, passed

away. He was appointed the personal representative of her estate.

In October 2005 petitioner learned from her sister-in-law that Mr.

Pocock had misappropriated funds from the estate. The news shocked

and angered petitioner and Mrs. Givens. She gave further thought to

divorcing Mr. Pocock but was afraid to uproot Mrs. Givens, who had

invested a substantial portion of her savings in the Winter Springs

home. Mrs. Givens insisted that Mr. Pocock be removed from the deed.

On October 26, 2005, Mr. Pocock was removed as personal

representative of his mother’s estate. The record includes an unsigned

stipulation between Mr. Pocock and the successor personal

representative. Thereon he agreed to pay damages of $30,000 within 15

days of the probate court’s approval of the agreement.

Chastened by the family’s discovery, Mr. Pocock fell into one of

his remorseful and acquiescent phases. He agreed to live in a separate

part of the house from petitioner and Mrs. Givens. On January 31, 2006,

he issued a quitclaim deed releasing his interest in the Winter Springs

home to petitioner and Mrs. Givens. After receiving the 2004 refund

check in July 2006, he wrote petitioner a $140,000 check. Petitioner

deposited the check into her Seminole account, from which she had

removed Mr. Pocock as a joint owner. 6

5 Although the record includes a copy of the 1998 refund check, it does not

reveal where the check was deposited.

6 Mr. Pocock also transferred title for his truck to petitioner in 2008.

Respondent concedes on brief that tax avoidance was not the principal purpose of the

2006 and 2008 transfers.

8

[*8] Years in issue: 2006, 2007, and 2008

After she stopped working as a golf clothing salesperson in 2004,

petitioner worked a series of jobs at a testing service, a fabric store, and

a life insurance company when she was not caring for her mother. As

was her custom, she gave Mr. Pocock her Forms W–2 and other tax

information for 2006, 2007, and 2008 but did not review or sign the

returns. Petitioner did not think to file separate returns because she

was unaware they had any tax problems. Furthermore, it remained

risky to question Mr. Pocock about financial matters.

As he had for previous years, Mr. Pocock overstated his income

and federal income tax withholding on his and petitioner’s 2006, 2007,

and 2008 joint returns. He did so by attaching to the returns false Forms

W–2 and Forms 1099–MISC, Miscellaneous Income, for the purported

entities Deadline, Inc., The Buyers Representative, and BEC Funding.

The information returns for those entities reported wages or

nonemployee compensation paid to Mr. Pocock, along with substantial

federal income tax withholdings. 7 In fact, Mr. Pocock never worked for

or received compensation from those entities. Nor did those entities

withhold federal income tax on his behalf.

With respect to petitioner, the 2006, 2007, and 2008 joint returns

included the Forms W–2 and other tax information she had provided to

Mr. Pocock. Those documents were genuine.

Mr. Pocock filed his and petitioner’s joint return for 2006 on July

11, 2008. It reported total tax of $67,479, federal income tax withholding

of $168,665, excess Social Security withholding of $626, and a telephone

excise credit of $40. On August 8, 2008, the IRS refunded the $101,852

overpayment to Mr. Pocock and petitioner by check, which petitioner

endorsed. Mr. Pocock made a split deposit of the check into the WAMU

joint accounts and his personal account.

By March 2009, the funds from that deposit were largely depleted.

Bank statements in the record reflect frequent debits for online and

retail purchases, restaurants, and miscellaneous recurring payments.

7 For example, Mr. Pocock attached to the joint 2006 return a Form W–2 and

a Form 1099–MISC from Deadline, Inc., and BEC Funding, respectively. The Form

W–2 reported wages of $263,282 and withholding of $99,590. The Form 1099–MISC

reported nonemployee compensation of $86,557 and withholding of $34,322.

9

[*9] On April 14, 2009, Mr. Pocock filed his and petitioner’s joint

return for 2007. Thereon he reported total tax of $67,269, income tax

withholding of $169,784, and excess Social Security withholding of $581.

On May 8, 2009, the IRS issued a $103,096 refund check. After signing

petitioner’s name on the back of the check, Mr. Pocock deposited it into

one of the WAMU joint accounts.

By October 2009, the funds from that deposit were largely

depleted. Bank statements in the record reflect frequent debits for

online and retail purchases, restaurants, and miscellaneous recurring

payments (including the home mortgage).

In April 2009 Mr. Pocock filed a joint return for 2008. Thereon he

claimed a refund of $108,253 after reporting total tax of $61,498, income

tax withholding of $169,007, and excess Social Security withholding of

$744. This time, however, the IRS did not issue a check.

Examination, collection activity, and criminal investigation

When the 2008 refund check did not materialize, Mr. Pocock

contacted an IRS customer service office for help. That office connected

him with the Taxpayer Advocate Service (TAS), which opened a case to

investigate the status of the refund. The TAS investigation drew the

attention of the IRS Examination Division, which commenced an

examination of Mr. Pocock and petitioner’s joint returns for 2006, 2007,

and 2008.

Soon thereafter, the IRS reversed and assessed the overstated

withholding credits for those years. 8 Account transcripts for 2006 and

2008 show liabilities (including interest and other accruals) of $276,892

and $114,309, respectively. The record does not include an account

Because the IRS reversed the overstated

transcript for 2007. 9

withholding credit for that year, we infer that petitioner’s liability for

2007 is at least the amount of the reported overpayment, $103,096.

In October 2010 petitioner learned about the liabilities via letter

from the IRS. Mr. Pocock was out of the house when the mail arrived,

giving petitioner a rare chance to intercept it. When he returned,

8 The amount of an overstated withholding credit may be summarily assessed

and is not subject to the deficiency procedures prescribed in section 6213.

§ 6201(a)(3); Bregin v. Commissioner, 74 T.C. 1097, 1104–05 (1980).

See

9 Stipulated Exhibit 70–J purports to be a copy of the 2007 account transcript

but is instead a duplicate copy of the transcript for 2008.

10

[*10] petitioner questioned Mr. Pocock about the letter and pressed him

for answers about how the liabilities could be so high. In response, he

slammed petitioner against a wall. After he went to sleep that night,

petitioner hid his gun, afraid he might use it.

Mr. Pocock and petitioner retained Taxpayer Resolution Services

Co. (TRS) to represent them before the IRS. On November 24, 2010,

TRS submitted a request for a collection due process (CDP) hearing on

behalf of Mr. Pocock and petitioner in response to a notice of intent to

levy for 2008. Thereafter, the IRS Criminal Investigation Division (CI)

launched an investigation of the joint returns, causing Appeals to

suspend the CDP hearing.

On June 30, 2011, CI Special Agents (SAs) Rita Adam and

Richard Kim made an unannounced visit to the Winter Springs home.

The SAs interviewed Mr. Pocock and petitioner separately. During their

interview of petitioner, the SAs presented her with copies of the returns

for 2005 through 2008 and the refund checks for 1997, 1998, and 2000

through 2007. Petitioner stated that she had not signed the 2005, 2006,

2007, and 2008 returns. She also acknowledged that she had endorsed

the 1997, 2004, and 2006 refund checks but denied signing the others.

CI did not recommend petitioner for criminal prosecution.

However, CI continued to investigate Mr. Pocock and, after some

internal delays, recommended that he be criminally prosecuted. A

grand jury investigation followed, but the U.S. Attorney’s Office for

Orlando, Florida, ultimately declined prosecution. CI received notice of

that decision in October 2015. 10

Medical treatment, divorce, and other developments

In July 2011 Mr. Pocock’s primary care physician recommended

that he seek mental health treatment. He was diagnosed with posttraumatic stress disorder arising from his military service. After

receiving the diagnosis, Mr. Pocock sought treatment. With medication

and therapy, his demeanor began to soften. In the years that followed,

he became less reactive and easier to engage.

10 By the time the IRS sent the case to the U.S. Department of Justice, the

criminal period of limitations for 2005 and 2006 had expired. According to SA Adam,

the U.S. Attorney’s Office had concerns about the period of limitations for the

remaining years.

11

[*11] Mr. Pocock’s improving mental health was not enough to save his

marriage, however. After learning he was under criminal investigation,

petitioner also discovered that Mr. Pocock was accruing debt under her

name. The destruction of her credit was petitioner’s final straw. She

asked Mr. Pocock for a divorce.

On September 8, 2011, petitioner and Mr. Pocock jointly filed a

petition for simplified dissolution of marriage with the 18th Judicial

Circuit Court in and for Seminole County, Florida. On November 9,

2011, the circuit court entered its final judgment of dissolution of

marriage (final judgment). The final judgment incorporated petitioner

and Mr. Pocock’s marital settlement agreement, which provided that

Mr. Pocock was responsible for all of their joint debts. The agreement

also provided: “The parties agree that due to [his] medical situation and

lack of finances to pay for housing, [petitioner] will allow [Mr. Pocock]

to live under one roof. He will pay rent in the amount of $800 per

month.”

Petitioner agreed to continued cohabitation with Mr. Pocock

because of his ongoing medical issues. Additionally, she was still caring

for Mrs. Givens, who was nearly 100 years of age. Mrs. Givens was

prone to the occasional fall, and petitioner relied on Mr. Pocock to help

lift her up.

Mrs. Givens passed away on July 17, 2013. Around that time,

Mr. Pocock was hospitalized with lung embolisms and began

experiencing vision problems. Meanwhile, petitioner and her brother,

Mr. Givens, listed the Winter Springs home for sale. They sold the

property in November 2013 for $315,000. Petitioner used her share of

the proceeds to purchase a home in Leesburg, Florida (Leesburg home),

for $160,000. Petitioner purchased the property without a mortgage,

and it remains unencumbered.

Petitioner has resided at the Leesburg home with Mr. Pocock

since November 2013. They live in separate parts of the house and treat

each other as roommates. At the time of trial, Mr. Pocock paid petitioner

monthly rent of $873. Petitioner relies on the certainty of that payment

and is fearful of finding an alternate roommate, who “could disappear at

any moment.”

Administrative and judicial proceedings

In January 2013 petitioner filed Form 8857, Request for Innocent

Spouse Relief (request for relief), for 2006, 2007, and 2008. Respondent’s

12

[*12] Cincinnati Centralized Innocent Spouse Operation evaluated

petitioner’s 2006 and 2007 tax years but routed 2008 to Appeals, where

her CDP hearing for that year remained pending. On November 3, 2016,

respondent issued petitioner final determination letters denying her

request for relief for 2006 and 2007. Petitioner timely filed a Petition

with this Court seeking review of respondent’s determinations for those

years.

Meanwhile, the end of the criminal investigation allowed for the

resumption of petitioner’s and Mr. Pocock’s CDP hearing for 2008. 11

Appeals allowed each spouse a separate hearing. During petitioner’s

hearing, Appeals considered her request for relief. The Appeals officer

(AO) assigned to the case acknowledged that petitioner would suffer

economic harm in the absence of relief. Nevertheless, the AO

recommended denying relief after concluding that petitioner, among

other things, had reason to know of the overstated withholding credits.

On October 19, 2017, Appeals issued a Notice of Determination

Concerning Collection Action(s) Under Section 6330 and Your Request

for Relief from Joint and Several Liability under Section 6015. Therein

Appeals determined to deny petitioner relief under section 6015 and

sustain the proposed collection action for 2008.

Petitioner timely filed a Petition with this Court seeking review

of both determinations. After we consolidated these cases for trial,

briefing, and opinion, trial was held in Tampa, Florida.

Before trial, petitioner submitted to respondent Form 433–A,

Collection Information Statement for Wage Earners and Self-Employed

Individuals. Thereon petitioner reported total assets of $191,625. That

amount comprised (1) the Leesburg home, valued at $180,000, (2) two

vehicles with a value of $850, (3) furniture, art, and jewelry valued at

$6,000, and (4) $4,775 held in bank accounts.

Petitioner, who was 68 years old at the time of trial, suffered from

hip pain that made work difficult. She planned to undergo hip

replacement surgery after trial. Her monthly income was $1,855. That

amount comprised her wages, Social Security, and $873 rental payment

from Mr. Pocock. Before trial, petitioner applied to the Central Florida

11 On June 16, 2016, respondent’s Collection Division issued a letter to

petitioner and Mr. Pocock regarding their 2006 and 2007 liabilities. Therein the

Collection Division stated that it was placing them in “currently not collectible” status

for those years.

13

[*13] Educators Federal Credit Union (credit union) for a $110,000 loan.

The credit union denied her application because she had insufficient

income.

OPINION

Generally, married taxpayers may elect to file a joint federal

income tax return. § 6013(a). If a joint return is made, the tax is

computed on the spouses’ aggregate income, and each spouse is fully

responsible for the accuracy of the return and is jointly and severally

liable for the entire amount of tax shown on the return or found to be

owing. § 6013(d)(3); Butler v. Commissioner, 114 T.C. 276, 282 (2000).

Nevertheless, under certain circumstances, a spouse who has made a

joint return may seek relief from joint and several liability under

procedures set forth in section 6015. Section 6015 provides a spouse

with three alternatives: (1) full or partial relief under subsection (b);

(2) proportionate relief under subsection (c); and (3) if relief is not

available under subsection (b) or (c), equitable relief under

subsection (f).

The parties stipulated that petitioner is not entitled to relief

under section 6015(b) or (c). Accordingly, our review is limited to section

6015(f).

I.

Jurisdiction, standard of review, and burden of proof

There are three jurisdictional bases for the Court to review a

taxpayer’s entitlement to section 6015 relief.

See Maier v.

Commissioner, 119 T.C. 267, 270–71 (2002), aff’d, 360 F.3d 361 (2d Cir.

2004). First, a spouse can file a petition pursuant to section 6015(e)(1).

See id. Second, the Court can review the claim in the context of a CDP

case under section 6330(d)(1). See id. at 271. Third, the claim can be

asserted by a spouse as an affirmative defense in a proceeding to

redetermine a deficiency pursuant to section 6213(a). See id. at 270.

Section 6015(e)(1)(A) provides that a taxpayer may file a Tax

Court petition to determine the appropriate relief available to the

taxpayer under section 6015. The petition must be filed (1) within 90

days after the Commissioner’s mailing of a notice of his final

determination of relief to the taxpayer or (2) if the Commissioner has

not yet mailed such a notice, at any time after six months have passed

since the taxpayer’s election for relief was “filed” (in the case of section

6015(b) and (c)) or the request for relief was “made” (in the case of

section 6015(f)).

14

[*14] With respect to 2006 and 2007, petitioner timely filed a Petition

contesting respondent’s final determination notices denying relief under

section 6015. Accordingly, this Court has jurisdiction under section

6015(e)(1) to determine the appropriate relief available to petitioner for

2006 and 2007.

As for 2008, the notice of determination comprised a

determination to sustain the proposed levy and a final determination to

deny petitioner section 6015 relief. Because petitioner filed a Petition

contesting respondent’s denial of section 6015 relief within 90 days of

the notice, we have jurisdiction under section 6015(e)(1) to determine

the appropriate relief available to petitioner for 2008. See Francel v.

Commissioner, T.C. Memo. 2019-35, at *37–40 (reviewing the taxpayer’s

innocent spouse claim under section 6015(e)(1) where the taxpayer

raised the claim at a CDP hearing, the notice of determination discussed

that claim, and the taxpayer’s petition assigned error to the denial of

innocent spouse relief).

In resolving section 6015(f) cases brought under section

6015(e)(1), we employ a de novo standard and scope of review. 12 Porter

v. Commissioner, 132 T.C. 203, 210 (2009). Petitioner generally bears

the burden of proving that she is entitled to equitable relief under

section 6015(f). See id.; see also Rule 142(a)(1).

II.

Section 6015(f) relief

As directed by section 6015(f), the Commissioner has prescribed

procedures to determine whether a requesting spouse is entitled to

equitable relief from joint and several liability. Those procedures are

set forth in Rev. Proc. 2013-34, § 4, 2013-43 I.R.B. 397, 399–403.

Although the Court considers those procedures when reviewing the

Commissioner’s determination, the Court is not bound by them. See

Pullins, 136 T.C. at 438–39; Molinet v. Commissioner, T.C. Memo. 2014109, at *6. The Court’s determination ultimately rests on an evaluation

of all the facts and circumstances. Porter, 132 T.C. at 210.

Pursuant to the revenue procedure, the Commissioner conducts a

multistep analysis when determining whether a requesting spouse is

12 The Petitions in these cases were filed before Congress enacted section

6015(e)(7), which generally limits our review to the administrative record. Because

section 6015(e)(7) does not apply to petitions filed before the provision’s effective date,

see Sutherland v. Commissioner, 155 T.C. 95, 104 (2020), our scope of review remains

de novo, see Pullins v. Commissioner, 136 T.C. 432, 438 (2011).

15

[*15] entitled to equitable relief under section 6015(f). See Rev. Proc.

2013-34, § 4. The requirements for relief under the revenue procedure

are categorized as threshold or mandatory requirements, streamlined

elements, and equitable factors. A requesting spouse must satisfy each

threshold requirement to be considered for relief. See id. § 4.01, 201343 I.R.B. at 399–400. If the requesting spouse meets the threshold

requirements, the Commissioner will grant equitable relief if the

requesting spouse meets each streamlined element. See id. § 4.02, 201343 I.R.B. at 400. Otherwise, the Commissioner will determine whether

equitable relief is appropriate by evaluating the equitable factors. See

id. § 4.03, 2013-43 I.R.B. at 400–03.

A.

Threshold requirements

The requesting spouse must meet seven threshold requirements

to be considered 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, the tax liability from which the

requesting spouse seeks relief is attributable to an item of the

nonrequesting spouse. Rev. Proc. 2013-34, § 4.01.

Respondent concedes that threshold requirements (1), (2), (3), and

(5) have been met. However, respondent contends that petitioner has

not satisfied threshold requirements (4), (6), and (7).

Before we address each requirement in turn, we will comment on

the credibility of the parties’ witnesses. “As a trier of fact, it is our duty

to listen to the testimony, observe the demeanor of the witnesses, weigh

the evidence, and determine what we believe.” Kropp v. Commissioner,

T.C. Memo. 2000-148, 2000 Tax Ct. Memo LEXIS 178, at *9. In Diaz v.

Commissioner, 58 T.C. 560, 564 (1972), we observed that the process of

distilling truth from the testimony of witnesses, whose demeanor we

observe and whose credibility we evaluate, “is the daily grist of judicial

life.”

16

[*16] At trial petitioner called herself, Brett, Hailey, and Mr. Givens as

witnesses. We found each of them to be credible and forthright. We also

found respondent’s sole witness, SA Adam, to be credible and forthright.

1.

Threshold requirement (4): no assets transferred

between spouses as part of a fraudulent scheme

Rev. Proc. 2013-34, § 4.01, does not define “fraudulent scheme.”

However, Treasury Regulation § 1.6015-1(d) states that a “fraudulent

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

The basic 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, 910 (1988). This

Court has previously found a fraudulent scheme when spouses

transferred property with the intent to hide such transfers. See Chen v.

Commissioner, T.C. Memo. 2006-160, 2006 Tax Ct. Memo LEXIS 163,

at *14–15 (finding that transfers to “hide the trail of fraud” and

fraudulent intent precluded relief under section 6015(f)).

According to respondent, Mr. Pocock transferred assets to

petitioner as part of a fraudulent scheme in 2006 and 2008. In 2006 he

deeded petitioner and Mrs. Givens his interest in the Winter Springs

home and wrote petitioner a check for $140,000. In 2008 he transferred

title for his truck to petitioner. Respondent contends that those

transfers were part of a scheme to defraud the Estate of Virginia Pocock,

from which he had stolen funds. 13

The record contains no evidence that petitioner schemed with her

husband to hide assets from the estate. Nor is there evidence that she

concealed from or misrepresented to her in-laws facts about the abovedescribed transfers. To the contrary, Mr. Pocock’s quitclaim deed on the

Winter Springs home was publicly recorded.

There is also no evidence that Mr. Pocock attempted to thwart

collection of any judgments against him in favor of the estate. Although

the parties stipulated the opening of a probate case in a Florida circuit

court, respondent has directed us to no filings evidencing an attempt by

Mr. Pocock to evade collection of a judgment. The only probate

document before us is an unsigned stipulation between Mr. Pocock and

the successor personal representative of the estate. Under the terms of

13 The above-described transfers occurred before the IRS examined the joint

returns for the years in issue. Respondent concedes that those transfers were not made

for tax avoidance purposes.

17

[*17] that stipulation, Mr. Pocock would pay damages of $30,000 within

15 days of the probate court’s approval of the agreement. There is

nothing in the record to suggest that he thwarted the consummation or

satisfaction of that agreement. Accordingly, respondent’s contention

that Mr. Pocock and petitioner were hiding Mr. Pocock’s assets from the

estate is fatally speculative.

Via Simultaneous Answering Brief, respondent also asserts that

the transfers were fraudulent under Florida’s Uniform Fraudulent

Transfer Act (FUFTA). FUFTA provides, in part, that a transfer is

fraudulent if the debtor did not receive reasonably equivalent value and

the debtor was insolvent at the time of the transfer or became insolvent

as a result of the transfer. Fla. Stat. § 726.106(1) (2021). Because

respondent’s FUFTA argument appeared for the first time in a

Simultaneous Answering Brief, we decline to consider it. 14 See Spireas

v. Commissioner, T.C. Memo. 2016-163, at *35 n.9 (“We are generally

reluctant to consider arguments advanced for the first time in a party’s

answering brief, and we will decline to do so here.”), aff’d, 886 F.3d 315

(3d Cir. 2018); see also DiLeo v. Commissioner, 96 T.C. 858, 891–92

(1991), aff’d, 959 F.2d 16 (2d Cir. 1992); Shelby U.S. Distribs., Inc. v.

Commissioner, 71 T.C. 874, 885 (1979). Accordingly, we need not

consider the interplay between state fraudulent transfer law and

threshold requirement (4).

Hence, on the basis of the record in these cases, we hold that no

assets were transferred as part of a fraudulent scheme.

2.

Threshold requirement (6): did not knowingly

participate in the filing of a fraudulent return

Rev. Proc. 2013-34, § 4.01(6), 2013-43 I.R.B. at 399, provides that

the requesting spouse must not knowingly participate in the filing of a

fraudulent joint return. This Court has found such participation where

the requesting spouse signed fraudulent joint returns with knowledge of

the inaccuracies reported thereon. See Durland v. Commissioner, T.C.

Memo. 2016-133, at *98 (holding that requesting spouse knowingly

participated in filing of fraudulent joint returns by signing them with

knowledge of omitted income). Petitioner concedes that the joint returns

fraudulently overstated Mr. Pocock’s federal income tax withholdings.

14 In any event the record does not establish that Mr. Pocock was or became

insolvent when the transfers at issue occurred. The bank statements in the record do

not account for the 1998 refund check of $115,137, which is greater than the $30,000

judgment referenced in the unsigned stipulation.

18

[*18] We must therefore determine whether she was aware of the

overstated withholdings when the returns were filed.

Petitioner credibly testified that her involvement in return

preparation was limited to providing information returns to her

husband. She did not review the returns before they were filed and,

therefore, could not have signed them with knowledge of the

inaccurately reported withholding credits. Even if she had reviewed and

signed the returns, those actions alone would not have alerted her to the

overstated withholding credits. The returns did not look false on their

face, as SA Adam acknowledged at trial. The SA credibly testified:

“[W]hen you just look at the returns, you don’t necessarily see anything

that would make you think that they were incorrectly prepared or selfprepared.”

Respondent asserts that petitioner knew about the fraudulent

refund scheme because she was aware of the abnormally large refund

checks. Respondent cites petitioner’s endorsement of the 1997, 2004,

and 2006 refund checks as evidence of her knowledge of and

participation in the fraudulent refund scheme.

However, petitioner credibly testified that Mr. Pocock had

represented that the large refunds arose from his “money brokering”

deals. Although he was not trustworthy, Mr. Pocock’s behavior made it

difficult for petitioner to question him about his business. When she

attempted to do so, he gave her terse and confusing answers before

resorting to verbal and physical intimidation. Mr. Pocock kept the

details of his business further shrouded by using a mailbox buzzer to

keep tight control of the mail. Petitioner’s son, Brett, corroborated those

dynamics at trial. He credibly testified that the family knew not to

disturb Mr. Pocock when he was in front of the computer. Doing so was

“risky” because it could “provoke anger.” Consequently, Brett was

unable to explain to his friends what his father did for a living.

Accordingly, we find it more likely than not that petitioner did not

know that Mr. Pocock was claiming fictitious withholdings from

nonexistent businesses.

Because she had no knowledge of the

overstated withholding credits, we hold that she did not knowingly

participate in the filing of the fraudulent joint returns.

19

[*19]

3.

Threshold requirement (7): tax liability attributable

to an item of the nonrequesting spouse

Rev. Proc. 2013-34, § 4.01(7), 2013-43 I.R.B. at 399, requires that

“[t]he income tax liability from which the requesting spouse seeks relief

[be] attributable (either in full or in part) to an item of the nonrequesting

spouse or an underpayment resulting from the nonrequesting spouse’s

income” unless a specific exception applies. The Commissioner may

consider granting relief regardless of whether the underpayment or

understatement is attributable to the requesting spouse if any of the

following exceptions applies: (1) attribution is solely due to operation of

community property law; (2) nominal ownership; (3) misappropriation

of funds; (4) abuse; or (5) fraud committed by the nonrequesting spouse.

See id.

Petitioner argues that she satisfies this threshold requirement

because Mr. Pocock prepared the fictitious information returns and

claimed the overstated withholding credits without her knowledge.

Respondent counters that, because petitioner benefited from the

resulting tax refunds, the liabilities at issue are attributable to her. We

agree with petitioner.

In deciding the issue of to whom inaccurate, false, or “phony” tax

items are attributable, the Court has generally attributed such items to

the spouse who wrongfully reported or claimed them. See Leith v.

Commissioner, T.C. Memo. 2020-149, at *7 n.6 (attributing disallowed

deductions claimed on Schedule C, Profit or Loss From Business, to the

spouse named thereon as the proprietor); Lawson v. Commissioner, T.C.

Memo. 1994-286 (attributing recharacterized loss to the spouse who had

mischaracterized stock sale as an ordinary loss rather than a capital

loss); Davis v. Commissioner, T.C. Memo. 1992-240 (attributing phony

deduction claimed on Schedule A, Itemized Deductions, to spouse who

claimed it), aff’d without published opinion, 26 F.3d 130 (9th Cir.

1994). 15

15 Although some of the cited cases arose under former section 6013(e), our

caselaw interpreting that section remains instructive in interpreting similar terms in

cases under section 6015. See Alt v. Commissioner, 119 T.C. 306, 313–14 (2002), aff’d,

101 F. App’x 34 (6th Cir. 2004); Juell v. Commissioner, T.C. Memo. 2007-219, 2007 Tax

Ct. Memo LEXIS 222, at *15 n.2. The terms “attributable . . . to an item of the

nonrequesting spouse” of Rev. Proc. 2013-34, § 4.01(7), are similar to the terms

“attributable to grossly erroneous items of one spouse” of former section 6013(e). The

analysis for attributing items to one spouse or the other is essentially the same.

20

[*20] In these cases Mr. Pocock prepared the joint returns, which

included fictitious Forms W–2 and 1099–MISC from nonexistent

entities. Those forms reported substantial withholdings from wages and

nonemployee compensation purportedly paid to Mr. Pocock. Because

the liabilities at issue arose from the reversal of the withholding credits

derived therefrom, they are attributable to Mr. Pocock and not to

petitioner. Petitioner has therefore satisfied the seventh threshold

requirement of Rev. Proc. 2013-34, § 4.01.

B.

Streamlined determination elements

Having determined that petitioner satisfies the threshold

requirements, we next consider whether she is entitled to a streamlined

determination. See Rev. Proc. 2013-34, § 4.02.

The requesting spouse is eligible for a streamlined determination

by the Commissioner only in cases in which the requesting spouse

establishes that she (1) is no longer married to the nonrequesting spouse

(marital status requirement), (2) would suffer economic hardship if not

granted relief (economic hardship requirement), and (3) did not know or

have reason to know that the nonrequesting spouse would not or could

not pay the underpayment of tax reported on the joint income tax return,

or did not know or have reason to know that there was an

understatement or deficiency on the joint income tax return (lack of

knowledge requirement). Id. The requesting spouse must establish that

she satisfies each of the three elements to receive a streamlined

determination granting relief. Id.

1.

Marital status requirement

For purposes of this element, a requesting spouse is “no longer

married to the nonrequesting spouse” if the requesting spouse is

divorced from the nonrequesting spouse as of the date of the

Commissioner’s determination. See id. § 4.03(2)(a)(i), 2013-43 I.R.B.

at 400. The Seminole County circuit court granted petitioner and Mr.

Pocock a divorce on November 9, 2011, which predates respondent’s

determinations to deny petitioner relief.

Accordingly, petitioner

satisfies this requirement.

Respondent acknowledges that petitioner’s marital status would

normally favor relief. Nevertheless, respondent urges us to discard the

plain text of the revenue procedure because petitioner continues to live

with Mr. Pocock. Respondent relies on Ohrman v. Commissioner, T.C.

Memo. 2003-301, 2003 Tax Ct. Memo LEXIS 303, at *12–13, *36, aff’d,

21

[*21] 157 F. App’x 997 (9th Cir. 2005), in which the Court upheld a

denial of innocent spouse relief to a taxpayer who had resided with her

spouse after their legal separation. In doing so, the Court gave little

weight to the taxpayer’s legal separation because she had obtained it “to

shield as many assets and as much of the family’s income as possible”

from tax collection. See id. at *25–26. Respondent contends that

petitioner and Mr. Pocock are similarly using state family law to shield

assets while continuing to cohabitate. We disagree.

Petitioner credibly testified that she divorced Mr. Pocock because

she discovered he was assuming debt in her name. We specifically find

that the destruction of petitioner’s credit was the final straw of a

disintegrating marriage. 16 Petitioner’s attempt to salvage her credit is

distinguishable from the actions of the Ohrman taxpayers. In Ohrman

the Commissioner issued the taxpayers a notice of proposed changes

pertaining to a tax return under examination. Id. at *8. Thereafter, the

parties entered a separation agreement under which the nonrequesting

spouse transferred assets worth $782,000 to the requesting spouse. Id.

at *9–11. Because the notice of proposed changes preceded the

settlement agreement, the Court concluded that the principal purpose

of the agreed-upon transfer was tax avoidance. Id. at *24–26.

In contrast respondent concedes that tax avoidance was not the

principal purpose of Mr. Pocock’s asset transfers to petitioner. Those

transactions—namely, the 2006 release of his interest in the Winter

Springs home, the 2006 transfer of $140,000, and the 2008 transfer of

his truck to petitioner—preceded the examination that resulted in the

liabilities at issue. Accordingly, Ohrman is distinguishable from the

cases at bar. 17 We therefore hold that petitioner satisfies the marital

status requirement.

2.

Economic hardship requirement

Economic hardship exists if satisfaction of the tax liability, in

whole or in part, would result in the requesting spouse’s being unable to

16 We do not believe petitioner and Mr. Pocock are continuing to live as de facto

spouses. We credit petitioner’s testimony that her post-divorce relationship with Mr.

Pocock is akin to that of a roommate. Practical concerns, such as ongoing health issues

and economic constraints, explain their post-divorce cohabitation to our satisfaction.

17 Other cases cited by respondent are also distinguishable.

Cf. Doyel v.

Commissioner, T.C. Memo. 2004-35 (upholding denial of innocent spouse relief to

taxpayer who, among other things, remained married to nonrequesting spouse); Von

Kalinowski v. Commissioner, T.C. Memo. 2001-21 (same).

22

[*22] meet her reasonable basic living expenses. Rev. Proc. 2013-34,

§ 4.03(2)(b), 2013-43 I.R.B. at 401. The requesting spouse would suffer

economic hardship if two requirements are met: (1) either (a) the

requesting spouse’s income is below 250% of the federal poverty level

(FPL) or (b) the requesting spouse’s monthly income exceeds her

reasonable basic monthly living expenses by $300 or less, and (2) the

requesting spouse does not have assets from which she can make

payments toward the tax liability and still meet reasonable basic living

expenses.

Id.

If the requesting spouse fails to satisfy either

requirement, the Commissioner “will consider all facts and

circumstances (including the size of the requesting spouse’s household)

in determining whether the requesting spouse would suffer economic

hardship if relief is not granted.” Id.

On brief, respondent concedes that petitioner’s monthly income is

$1,855. That amount comprises petitioner’s monthly wages, Social

Security, and $873 rental payment from Mr. Pocock.

Despite that concession, respondent argues that petitioner’s

economic outlook is incomplete without considering Mr. Pocock’s

disability and other monthly income. However, petitioner’s monthly

income includes the $873 payment she receives from Mr. Pocock.

Respondent has not directed us to any evidence that Mr. Pocock pays

petitioner more than that amount. Even if we were to consider

petitioner and Mr. Pocock as a single economic unit, we doubt it would

yield a different result. The record includes a letter from respondent’s

Collections Division to petitioner and Mr. Pocock, stating: “We

determined that you don’t have the ability to pay the money you owe at

this time.” 18

Thus, we find that petitioner’s annual income is $22,260 ($1,855

× 12), which is lower than 250% of the applicable FPL. 19 Petitioner

therefore satisfies the first prong of the economic hardship test.

The second prong of the test requires consideration of whether

petitioner has any assets from which she can make payments towards

That determination is consistent with the AO’s acknowledgment in his

memorandum denying relief that the economic hardship factor favors petitioner. It is

also consistent with respondent’s counsel’s acknowledgment at trial that the chances

of collecting the liabilities at issue are doubtful at best.

18

19 At the time of trial, 250% of the FPL for a family of one in Florida was

$30,350. See Annual Update of the HHS Poverty Guidelines, 83 Fed. Reg. 2642, 2643

(Jan. 18, 2018).

23

[*23] the tax liabilities and still meet reasonable basic living expenses.

On her Form 433–A, petitioner reported total assets of $191,625,

$180,000 of which is attributable to the Leesburg home. Because the

liabilities for the years in issue are at least $485,297, petitioner does not

have sufficient assets to satisfy them.

To be sure, respondent correctly notes that the Leesburg home is

unencumbered. However, we doubt petitioner could access the equity in

the property without selling it. 20 The record includes a statement of

credit denial from a credit union, and petitioner credibly testified that

her work prospects were diminishing on account of physical ailments.

Given these circumstances, we do not believe petitioner could liquidate

her assets to make even a partial payment of the liabilities and still meet

her reasonable basic living expenses. She therefore satisfies the second

prong of the economic hardship test.

In the light of the foregoing, we hold that petitioner satisfies the

economic hardship requirement.

3.

Lack of knowledge requirement

The facts here are atypical for underpayment cases because the

joint returns showed overpayments from overstated withholdings—not

taxes due. 21 Because these cases involve inaccurate returns, we find

caselaw and other authorities on understatements to be instructive.

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

giving rise to the understatement as of the date the joint return was

filed, this factor will weigh against relief. Rev. Proc. 2013-34,

§ 4.03(2)(c)(i)(A), 2013-43 I.R.B. at 401. A requesting spouse has

knowledge or reason to know of an understatement if she actually knew

of the understatement or if a reasonable person in similar circumstances

would have known of the understatement. Treas. Reg. § 1.6015-2(c). We

20 Respondent does not contend that petitioner could sell the home and still

meet her reasonable basic living expenses. To the contrary, respondent states on brief:

“Respondent is not arguing that petitioner should have to sell the home in order to pay

the tax liability.”

21 In a typical underpayment case, the knowledge factor considers whether the

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

not or could not pay the tax liability at the time of filing the joint return. Rev. Proc.

2013-34, § 4.03(2)(c)(ii), 2013-43 I.R.B. at 401.

24

[*24] must therefore consider whether petitioner actually knew or had

reason to know of the overstated withholdings.

a.

Actual knowledge

For the reasons explained supra part II.A.2, we find that

petitioner did not have actual knowledge of the overstated withholdings.

b.

Constructive knowledge

We now consider whether petitioner had reason to know of the

overstated withholdings when the returns were filed. Rev. Proc. 201334, § 4.03(2)(c)(iii), 2013-43 I.R.B. at 402, states:

The facts and circumstances that are considered in

determining whether the requesting spouse had reason to

know of an understatement, or reason to know whether the

nonrequesting spouse could or would pay the reported tax

liability, include, but are not limited to, the requesting

spouse’s level of education, any deceit or evasiveness of the

nonrequesting spouse, the requesting spouse’s degree of

involvement in the activity generating the income tax

liability, the requesting spouse’s involvement in business

or household financial matters, the requesting spouse’s

business or financial expertise, and any lavish or unusual

expenditures compared with past spending levels.

Taxpayers are generally presumed to have constructive

knowledge of information reported on returns that they signed.

Hayman v. Commissioner, 992 F.2d 1256, 1262 (2d Cir. 1993), aff’g T.C.

Memo. 1992-228. In addition, taxpayers have a duty to inquire into the

amounts of their tax liabilities. Price v. Commissioner, 887 F.2d 959,

965 (9th Cir. 1989); Butler, 114 T.C. at 284; Wiener v. Commissioner,

T.C. Memo. 2008-230. Failure to fulfill the duty to inquire may

constitute reason to know that the tax would not be paid. Sleeth v.

Commissioner, T.C. Memo. 2019-138, at *12, aff’d, 991 F.3d 1201 (11th

Cir. 2021). Innocent spouse relief is not available to those who choose

to ignore information in their possession. Charlton v. Commissioner,

114 T.C. 333, 340 (2000); Sleeth, T.C. Memo. 2019-138, at *12.

Petitioner did not have a clear idea of how Mr. Pocock was earning

his purported commissions. Mr. Pocock exhibited a high degree of

evasiveness about the details of his purported “money brokering”

business. He kept close watch of the mail and refused to give clear

25

[*25] answers about what he was doing to generate periodic six-figure

payouts. Petitioner’s involvement in return preparation was limited to

providing Mr. Pocock her Forms W–2 and other tax information. These

facts tend to support a finding that she did not have reason to know of

the overstated withholdings.

However, other facts in the record suggest that petitioner had a

duty to inquire about the joint returns that she failed to uphold.

Although petitioner did not sign the joint returns at issue, she consented

to their filing by regularly relying on Mr. Pocock to file them on her

behalf. Having endorsed the refund checks for 1997, 2004, and 2006,

petitioner was aware that Mr. Pocock regularly claimed six-figure

refunds on their joint returns. She was also aware that Mr. Pocock had

stolen from his mother’s estate and was therefore untrustworthy. Given

these facts, petitioner could not reasonably trust Mr. Pocock to file

accurate returns. Furthermore, before Mr. Pocock commenced his

fraudulent refund scheme, he moved from one failed business venture

to another. His sudden funding of household improvements and other

joint expenses with six-figure checks was therefore lavish compared to

past spending levels. Such a development would normally warrant an

inquiry.

In a vacuum, these circumstances would compel a holding that

petitioner had reason to know of the overstated withholdings. However,

we do not so hold because petitioner was a victim of spousal abuse.

c.

Abuse

Notwithstanding the requesting spouse’s knowledge or beliefs,

that knowledge may be negated if the nonrequesting spouse abused the

requesting spouse or maintained control of the household finances by

restricting the requesting spouse’s access to financial information such

that the nonrequesting spouse’s actions prevented the requesting spouse

from questioning or challenging payment of the liability. Rev. Proc.

2013-34, § 4.02(3)(a), 4.03(2)(c)(i) and (ii). “Abuse comes in many forms

and can include physical, psychological, sexual, or emotional abuse,

including efforts to control, isolate, humiliate, and intimidate the

requesting spouse, or to undermine the requesting spouse’s ability to

reason independently and be able to do what is required under the tax

laws.” Id. § 4.03(2)(c)(iv), 2013-43 I.R.B. at 402; see, e.g., Stephenson v.

Commissioner, T.C. Memo. 2011-16. This Court takes all facts and

circumstances into account in determining the presence of abuse, see

Rev. Proc. 2013-34, § 4.01, and requires substantiation, or at a

26

[*26] minimum, specificity, with regard to allegations of abuse, see

Nihiser v. Commissioner, T.C. Memo. 2008-135. A generalized claim of

abuse is insufficient. See Thomassen v. Commissioner, T.C. Memo.

2011-88, aff’d, 564 F. App’x 885 (9th Cir. 2014); Knorr v. Commissioner,

T.C. Memo. 2004-212.

In these cases the record provides a detailed account of Mr.

Pocock’s abuse and physical intimidation of petitioner. Petitioner

credibly testified that he threw a glass vase at her head when she

pressed him for information about a business dispute with her brother.

From that incident, petitioner realized that questioning him about

business or finances was a risky endeavor. When petitioner attempted

to do so in later years, he responded by kicking and throwing household

objects. In addition to physically intimidating petitioner, he restricted

petitioner’s access to financial information. He was evasive about the

nature of his business and kept tight control of the mail. Consequently,

it was difficult for petitioner to question him about his “money

brokering” business and, by extension, the joint returns.

Medical records in evidence corroborate petitioner’s account of

Mr. Pocock’s behavior—in particular, a letter from Mr. Pocock’s

therapist referencing “abusive behaviors” towards family members and

others. Petitioner’s son Brett provided further corroboration at trial.

Brett credibly testified that the household he grew up in was often tense,

especially when the family was experiencing financial stress. During

those periods, the family “didn’t poke the bear” by engaging with Mr.

Pocock. Brett credibly testified about physical abuse he suffered from

his father when he did so.

Respondent contends that certain actions by petitioner

undermine her allegations of abuse. According to respondent, petitioner

confronted Mr. Pocock about finances on several occasions without any

apparent fear of retaliation. Respondent asserts that petitioner had no

trouble (1) removing him from the joint Seminole account, (2) getting

him to relinquish his interest in the Winter Springs home, and

(3) negotiating the division of their liabilities in their uncontested

divorce proceeding.

With respect to the latter action, Mr. Pocock was receiving mental

health treatment at the time of the divorce in 2011. Petitioner credibly

testified that medication and therapy softened his irritability and

reactivity. Furthermore, Mr. Pocock was particularly vulnerable in

2011 since he was the target of a criminal investigation. Given these

27

[*27] changed circumstances, petitioner’s uncontested divorce does not

undercut allegations of earlier abuse.

With respect to the removals of Mr. Pocock from the joint account

and the deed, petitioner and her daughter Hailey credibly testified that

he exhibited recurring periods of remorse. It was during one of those

periods when he assented to the removals. We doubt Mr. Pocock would

have been as acquiescent if petitioner had questioned him about their

tax returns, given that the refunds were his primary source of income.

In fact, when petitioner did so in 2010, he slammed her against a wall.

That incident frightened petitioner enough that she hid his gun.

Considering the totality of petitioner’s circumstances when the

joint returns were filed, we do not believe petitioner could have

questioned their accuracy without risking her safety. 22 Because Mr.

Pocock’s abusive behavior prevented petitioner from questioning the

accuracy of the joint returns or payment of the liabilities thereon, she

satisfies the lack of knowledge requirement.

III.

Conclusion

We find that petitioner is entitled to streamlined relief from joint

and several liability pursuant to section 6015(f) for the years in issue.

We have considered all arguments made in reaching our decision and,

to the extent not mentioned, we conclude that they are moot, irrelevant,

or without merit. 23

To reflect the foregoing,

Appropriate decisions will be entered for petitioner.

22 Given her allegations of abuse, one might question why petitioner continues

to reside with Mr. Pocock. Petitioner credibly testified that her economic situation

necessitates having a roommate. She believes her living arrangement with Mr. Pocock

is more reliable than a typical rental situation, a sentiment which we observed to be

genuine. Since 2011, Mr. Pocock’s anger and reactivity have softened with medication

and counseling. Given these changed circumstances, petitioner’s living arrangement

does not contradict her allegations of earlier abuse.

23 Because petitioner’s section 6015(f) relief renders the proposed levy for 2008

moot, we need not consider whether Appeals’ determination to sustain the collection

action was an abuse of discretion.