Judy Yiu v. Commissioner , 2020 T.C. Summary Opinion 23 ( 2020 )

T.C. Summary Opinion 2020-23
UNITED STATES TAX COURT
JUDY YIU, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 23782-18S. Filed August 5, 2020.
Judy Yiu, pro se.
Daniel C. Chavez, for respondent.
SUMMARY OPINION
PANUTHOS, Special Trial Judge: This case was heard pursuant to the
provisions of section 7463 of the Internal Revenue Code in effect when the
petition was filed.1 Pursuant to section 7463(b), the decision to be entered is not
1
Unless otherwise indicated, subsequent section references are to the
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reviewable by any other court, and this opinion shall not be treated as precedent
for any other case.
Petitioner seeks review under section 6015(e)(1) of the determination of the
Internal Revenue Service (IRS or respondent)2 that she is (1) entitled to partial
relief under section 6015(c) and (2) is not entitled to a credit or refund for the
amount of partial relief determined for the 2011 tax year.
The issue for decision is whether petitioner is entitled to a credit or refund
of $2,500 with respect to the partial relief granted for tax year 2011 pursuant to
section 6015(c). See also sec. 6015(g)(3).
1
(...continued)
Internal Revenue Code in effect at all relevant times, and all Rule references are to
the Tax Court Rules of Practice and Procedure.
2
The Court uses the term “IRS” to refer to administrative actions taken
outside of these proceedings. The Court uses the term “respondent” to refer to the
Commissioner of Internal Revenue, who is the head of the IRS and is respondent
in this case, and to refer to actions taken in connection with this case.
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Background
Some of the facts have been stipulated and are so found. The stipulation of
facts and the accompanying exhibits are incorporated herein by this reference.3
Petitioner resided in California when her petition was timely filed.
Petitioner married James Neiswonger in 1998. During tax years 2011 and
2012 (years in issue) petitioner was employed as a legal assistant in the City
Attorney’s Office in Los Angeles. Mr. Neiswonger received Social Security
disability income and was not employed during either 2011 or 2012. Petitioner
and Mr. Neiswonger were divorced in July 2013.
A professional tax return preparer prepared joint 2011 and 2012 Federal
income tax returns for petitioner and Mr. Neiswonger. The information included
on the tax returns was provided by petitioner and her former husband.
Mr. Neiswonger presented the completed returns to petitioner for signature.
3
Attached to the stipulation are two exhibits marked A and B, respectively.
Exhibit A is 494 pages (identified as the “entire administrative record”) and
exhibit B is 13 pages (identified as miscellaneous account transcripts). Rule 91(b)
provides that stipulations shall be clear and concise and exhibits should be
numbered serially. The parties have not directed the Court’s attention to any of
the documents in the stipulation that are relevant to the very limited issue in this
case. The attachment of an the entire administrative file of almost 500 pages as a
single exhibit without identifying the particular documents creates a substantial
burden in reviewing the record in a submitted case. We presume that this
stipulation was drafted and exhibits compiled by counsel for respondent. We urge
counsel to comply with the Rules.
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Petitioner and Mr. Neiswonger signed and filed the respective tax returns.
Petitioner did not review the tax return for either year before signing it.
Mr. Neiswonger had no taxable income for the years in issue; thus the reported
income and claimed deductions relate primarily to petitioner. The 2011 income
tax return did, however, claim $2,500 of education credits which relate to
Mr. Neiswonger.
After an examination of the 2011 and 2012 tax returns, the IRS issued a
notice of deficiency for each year and disallowed various deductions and credits
claimed on the returns. Neither petitioner nor Mr. Neiswonger filed a petition
disputing the deficiencies determined for the years in issue.
Petitioner filed a Form 8857, Request for Innocent Spouse Relief, dated
February 7, 2018, related to the years in issue. At some time before filing the
claim for relief, petitioner paid the entire deficiency determined for tax year 2011
and part of the deficiency determined for tax year 2012. The IRS allowed
petitioner partial relief in that she was relieved of $2,500 for the taxable year 2011
relating to the disallowed claimed education credits. The IRS concluded that those
claimed credits were not attributable to petitioner. The IRS further determined
that all other items were attributable to petitioner, and therefore she was denied
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relief of $1,635 for taxable year 2011 and was not entitled to any other spousal
relief.
Petitioner filed a timely petition in response to the IRS’ determinations. She
has agreed that she is not entitled for relief for tax year 2011 pursuant to section
6015(b) or (f). Further, she agrees that she is not entitled to relief for tax year
2012 pursuant to section 6015(b), (c), or (f).
Petitioner now seeks a credit or refund of the $2,500 portion of the 2011 tax
liability for which she was granted partial relief pursuant to section 6015(c).
Discussion
Generally, married taxpayers may elect to file a joint Federal income tax
return. Sec. 6013(a). After making the election, each spouse is jointly and
severally liable for the entire tax due. Sec. 6013(d)(3). Section 6015 provides
three avenues for relief from that liability to a taxpayer who has filed a joint
return. Section 6015(b) allows relief for understatements of tax attributable to
certain erroneous items on a return. Section 6015(c) provides relief for a portion
of an understatement of tax to a taxpayer who is separated or divorced. Section
6015(f) more broadly confers on the Commissioner discretion to grant equitable
relief to taxpayers who otherwise do not qualify under section 6015(b) or (c). See
also sec. 6015(e).
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With respect to the 2011 tax liability, respondent allowed petitioner partial
relief under section 6015(c). The parties agree that petitioner is not entitled to
relief under section 6015(b) or (f). This should end the matter, except that
petitioner paid the entire 2011 tax liability before filing a claim for relief under
section 6015 and now seeks a credit or refund for the amount of relief granted.
The problem for petitioner is the clear text of section 6015(g), which governs the
allowance of credits and refunds in cases where the taxpayer is granted relief
under section 6015(c). Section 6015(g)(3) provides:
SEC. 6015(g). Credits and Refunds.--
* * * * * * *
(3) Credit and refund not allowed under subsection (c).--
No credit or refund shall be allowed as a result of an election
under subsection (c).[4]
4
Sec. 6015 was enacted on July 22, 1998, as part of the Internal Revenue
Service Restructuring and Reform Act of 1998, Pub. L. No. 105-206, sec. 3201(a),
112 Stat. at 734. In the technical corrections to the Act, Congress amended sec.
6015(e)(3)(A) to clarify that “credit or refund shall be allowed or made to the
extent attributable to the application of subsection (b) or (f).” See Omnibus
Consolidated and Emergency Supplemental Appropriations Act, 1999, Pub. L. No.
105-277, sec. 4002(c)(2), 112 Stat. 2681. Through the correction, Congress
intentionally denied taxpayers any refund under sec. 6015(c). A House report on
the legislative change elaborated that an election under sec. 6015(c) “is limited to
deficiency situations and only affects the amount of the deficiency for which the
electing spouse is liable. Thus, the election cannot be used to generate a refund,
[or] to direct a refund to one spouse or the other”. H.R. Rept. No. 105-817, at 63-
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We have held that a taxpayer is not entitled to a credit or refund for amounts
paid relating to relief granted under section 6015(c). Dutton v. Commissioner,
122 T.C. 133, 137, 140 (2004); Dalton v. Commissioner, T.C. Memo. 2002-288.
We have considered all of petitioner’s arguments, and, to the extent not
addressed herein, we conclude that they are moot, irrelevant, or without merit.
To reflect the foregoing,
Decision will be entered for
respondent.
4
(...continued)
64 (1998), 1998-4 C.B. 253, 315-316. The rules on refunds and credits pursuant
to the statute were later moved into sec. 6015(g).