Kannard v. Comm'r , 2010 Tax Ct. Summary LEXIS 22 ( 2010 )


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  •                   T.C. Summary Opinion 2010-22
    UNITED STATES TAX COURT
    KATHERINE WITHERSPOON KANNARD, Petitioner AND
    JAMES R. KANNARD, JR., Intervenor v.
    COMMISSIONER OF INTERNAL REVENUE, Respondent
    Docket No. 5633-07S.              Filed March 1, 2010.
    Katherine Witherspoon Kannard, pro se.
    James R. Kannard, Jr., pro se.
    John R. Bampfield, for respondent.
    CARLUZZO, Special Trial Judge:   This case was heard
    pursuant to the provisions of section 7463.1   Pursuant to section
    7463(b), the decision to be entered is not reviewable by any
    1
    Unless otherwise indicated, section references are to the
    Internal Revenue Code of 1986, as amended, in effect for the
    relevant period.
    - 2 -
    other court, and this opinion shall not be cited as precedent for
    any other case.
    In this section 6015(e) proceeding, petitioner seeks to be
    relieved from a 2004 Federal income tax liability assessed
    against her because she filed a joint Federal income tax return
    for that year.    Consistent with respondent’s determination
    denying her administrative request for relief, petitioner’s
    former spouse, James R. Kannard, Jr. (intervenor), opposes
    relief.
    Background
    Some of the facts have been stipulated and are so found.
    At the time the petition was filed, petitioner and intervenor
    resided at separate addresses in Florida.
    Petitioner and intervenor were married in July 1988; they
    separated during 2005 and were divorced in October 2007.    They
    have a daughter and twin sons, all minors and all subjects of a
    hostile custody dispute during the divorce proceedings.    A social
    worker involved in the custody dispute described the relationship
    between petitioner and intervenor as a “whirlwind of animosity”,
    riddled with he-said, she-said accusations of spousal abuse,
    child abuse, deception, larceny, and adultery.    From their
    respective presentations at trial it is clear that the whirlwind
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    has lost none of its force.2    Petitioner’s unpaid Federal income
    tax liability and the resultant dispute with the Internal Revenue
    Service over that liability no doubt exaggerated the resentment
    each feels towards the other.    The trial testimony of each was
    informed not so much by any good-faith attempt to objectively
    describe relevant events, but by the animosity witnessed and
    described by the social worker.    Consequently, rather than accept
    one version over the other, we reject as incredible their
    conflicting descriptions of the same events.    That being so, our
    conclusions are supported by factual findings based almost
    exclusively upon stipulations, undisputed testimony, or written
    records.
    Petitioner graduated with a bachelor of arts degree in
    international political science from Emory University in 1988.
    Starting in 2001 and at all times relevant, she was employed as a
    consultant by Uniphy Management Systems (Uniphy), a company that
    provides medical insurance services to physicians.
    In 1998, after interrupting his college education to serve
    in the U.S. Navy, intervenor graduated with a bachelor of
    science degree in electrical engineering from the University of
    2
    Hostilities carried over from disputed domestic relations
    matters between former or estranged spouses surface all too
    frequently in sec. 6015(e) proceedings. See, e.g., Stergios v.
    Commissioner, T.C. Memo. 2009-15.
    - 4 -
    Tennessee.   Soon after graduation he accepted a position with
    Honeywell International, Inc. (Honeywell), in Tampa, Florida.
    Petitioner’s and intervenor’s salaries from their respective
    employers were deposited into one or the other of two joint
    checking accounts, one of which was maintained at the GTE Federal
    Credit Union (the GTE joint account).    These joint checking
    accounts, in addition to a number of credit card accounts, were
    used to pay the couple’s living expenses.
    Intervenor’s employment with Honeywell ended in February
    2004.   Soon thereafter he withdrew approximately $11,000 from his
    employer-based retirement plan (the pension distribution).      He
    also applied for and received unemployment compensation before
    starting a new job in March 2004.    The pension distribution and
    unemployment compensation were deposited into the GTE joint
    account.
    For each year that they were married, including 2004 and the
    year of their divorce, petitioner and intervenor elected to file
    a joint Federal income tax return.     The 2004 joint Federal income
    tax return was prepared and electronically filed using a
    computer-based income tax return preparation program (the 2004
    joint return).
    The income reported on the 2004 joint return does not
    include the above-referenced pension distribution or unemployment
    compensation (the omitted items).    The tax shown on the 2004
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    joint return does not include the applicable section 72(t)
    additional tax attributable to the pension distribution.
    Email communications between petitioner and intervenor
    during the relevant period demonstrate that petitioner was aware
    of the omitted items.
    Respondent determined a deficiency in petitioner and
    intervenor’s 2004 Federal income tax and issued a notice of
    deficiency to them on December 11, 2006.   The deficiency
    determined in that notice of deficiency takes into account the
    omitted items and the section 72(t) additional tax attributable
    to the pension distribution.   Neither petitioner nor intervenor
    petitioned this Court in response to that notice of deficiency,
    and the deficiency and related amounts were assessed in due
    course.
    Discussion
    In general, spouses may elect to file a joint Federal income
    tax return for a year even if one spouse had no obligation to
    file a return for that year.   Sec. 6013(a).   Spouses electing to
    do so are jointly and severally liable not only for the entire
    amount of tax reported on the return, but also for any deficiency
    subsequently determined as well, even if all income giving rise
    to the tax liability is allocable to only one of them.   Sec.
    6013(d)(3); Butler v. Commissioner, 
    114 T.C. 276
    , 282 (2000); see
    sec. 1.6013-4(b), Income Tax Regs.
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    Subject to various conditions and in a variety of ways, an
    individual who has made a joint return may elect to seek relief
    from the joint and several liability arising from that joint
    return.   Sec. 6015.
    There are three types of relief available under section
    6015.   In general, subsection (b) provides full or apportioned
    relief from joint and several liability, subsection (c) provides
    proportionate tax relief to divorced or separated taxpayers, and
    subsection (f) provides equitable relief from joint and several
    liability if relief is not available under subsection (b) or (c).
    Petitioner requests relief under all of the above-referenced
    subsections of section 6015.     Because she was aware of the
    omitted items, however, she is not entitled to relief under
    subsection (b) or (c).   See sec. 6015(b)(1)(C), (c)(3)(C);
    Stevens v. Commissioner, 
    872 F.2d 1499
    , 1505 (11th Cir. 1989),
    affg. T.C. Memo. 1988-63; Charlton v. Commissioner, 
    114 T.C. 333
    ,
    341 (2000); Bokum v. Commissioner, 
    94 T.C. 126
    , 148 (1990), affd.
    
    992 F.2d 1132
    (11th Cir. 1993).     That being so, we consider, de
    novo, her entitlement to equitable relief under subsection (f).
    Porter v. Commissioner, 132 T.C. __ (2009).
    A taxpayer is entitled to section 6015(f) relief if, taking
    into account all the facts and circumstances, it would be
    inequitable to hold the taxpayer liable for any unpaid tax or
    deficiency.   Sec. 6015(f)(1).    Taking into account the factors
    - 7 -
    the Commissioner considers in matters such as this, see Rev.
    Proc. 2003-61, 2003-2 C.B. 296, we find that it would not be
    inequitable to hold petitioner liable for joint and several
    income tax liability that arises from the joint 2004 Federal
    income tax return filed with intervenor, and therefore petitioner
    is not entitled to relief from that liability under section
    6015(f).
    Little would be gained by burdening this opinion with a
    discussion of each of the factors contained in the above-
    referenced revenue procedure.    See sec. 7463(a) (last sentence).
    Suffice it to note that petitioner’s actual knowledge of the
    omitted items, although not determinative, weighs heavily against
    relief, see Stolkin v. Commissioner, T.C. Memo. 2008-211; Rev.
    Proc. 2003-61, sec. 4.03(2)(a)(iii), 2003-2 C.B. at 298, as does
    her failure to establish that:    (1) She did not significantly
    benefit from the omitted income; or (2) she would suffer economic
    hardship if she were required to pay the 2004 income tax
    liability.
    To reflect the foregoing,
    Decision will be entered
    for respondent.
    

Document Info

Docket Number: No. 5633-07S

Citation Numbers: 2010 T.C. Summary Opinion 22, 2010 Tax Ct. Summary LEXIS 22

Judges: "Carluzzo, Lewis R."

Filed Date: 3/1/2010

Precedential Status: Non-Precedential

Modified Date: 11/20/2020