Lindsey Jones v. Cir

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS FEB 3 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
LINDSEY JONES, No. 20-70013
Petitioner-Appellant, Tax Ct. No. 32168-15
v.
MEMORANDUM*
COMMISSIONER OF INTERNAL
REVENUE,
Respondent-Appellee.
Appeal from a Decision of the
United States Tax Court
Argued and Submitted January 18, 2022
Honolulu, Hawaii
Before: O’SCANNLAIN, MILLER, and LEE, Circuit Judges.
Lindsey Jones appeals from the tax court’s decision denying relief from joint
and several liability for underpayments of her 2009 and 2010 income tax. We have
jurisdiction under 26 U.S.C. § 7482(a)(1), and we affirm.
1. The tax court did not err by concluding that Jones tacitly consented to
the filing of the 2010 joint return. See Slone v. Commissioner, 810 F.3d 599, 604
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
(9th Cir. 2015) (“We review a tax court’s factual determinations for clear error and
its application of legal standards de novo.”). A joint tax return signed by one
spouse on behalf of the other is valid so long as the nonsigning spouse tacitly
consented to filing the joint return. See Hennen v. Commissioner, 35 T.C. 747,
748–49 (1961); 26 U.S.C. § 6064. The key question is whether both spouses
intended at the time of filing to file a joint return. See Federbush v. Commissioner,
34 T.C. 740, 757–58 (1960).
The tax court correctly articulated the governing legal standard, and it found
that Jones tacitly consented to filing the 2010 joint tax return because she had
provided her then-husband with her W-2s and other tax information; she failed to
file a separate income tax return; and she later allowed her spouse in a subsequent
marriage to sign her name to their joint tax returns. Although the last of those facts
does not seem to us to be especially probative, and although Jones had remarried
by the time her ex-husband signed her name on the 2010 return, those
considerations are insufficient to establish that the tax court clearly erred. The 2010
joint tax return is therefore valid.
2. The tax court did not abuse its discretion by denying Jones innocent-
spouse relief under 26 U.S.C. § 6015(f) for the 2009 and 2010 underpayments.
Section 6015(f) grants the Commissioner discretion to relieve a spouse of joint
liability if, considering all of the facts and circumstances, it would be inequitable to
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hold the requesting spouse liable for the unpaid taxes. Relevant factors include (1)
the marital status of the claimant as of the date of the claim; (2) whether the
claimant would suffer economic hardship if relief is not granted; (3) whether the
claimant knew or had reason to know that the non-claiming spouse could not pay
the tax liability; (4) whether the claimant has a legal obligation to pay the
outstanding tax liability; (5) whether the claimant significantly benefited from the
underpayment; (6) the claimant’s tax compliance record in subsequent years; and
(7) the claimant’s physical and mental health. Rev. Proc. 2013–34 § 4.03(2).
The tax court held that Jones’s history of noncompliance with income tax
laws and knowledge of her ex-husband’s financial difficulties outweighed those
factors favoring relief—namely, marital status and a lack of benefit from the
underpayments. The remaining factors were neutral. On appeal, Jones argues that
the knowledge factor should not have militated against relief and the legal-
obligation, significant-benefit, and health factors should have weighed in her favor.
But the tax court did not clearly err in its factual findings, nor did it abuse its
discretion in concluding that the factors, on balance, did not favor granting Jones
relief.
First, the tax court’s finding that Jones had reason to know that her ex-
husband could not pay the 2009 and 2010 tax liability is supported by the record.
Jones knew that she and her ex-husband needed to use proceeds from selling their
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home to satisfy their 2008 tax liability, and she acknowledged at trial that money
was tight at the time of their separation. The tax court reasoned that Jones could
not “turn a blind eye to the couple’s tax filings,” and that given the circumstances
she should have “taken some steps to assure herself . . . that the tax liabilities for
the years at issue would be paid.” That was not error. And although spousal abuse
that prevents the claimant from being able to question tax payments “for fear of the
nonrequesting spouse’s retaliation” would weigh in favor of relief, the tax court did
not clearly err in finding that Jones had not shown abuse of the type or degree that
would be recognized by the tax law. Rev. Proc. 2013–34 § 4.03(2)(c)(i)(A).
Second, the marital settlement agreement did not absolve Jones of liability for the
joint taxes. Third, neither spouse received a significant benefit from the unpaid tax
liabilities—that is, “any benefit in excess of normal support,” such as “owning
luxury assets and taking expensive vacations.” Rev. Proc. 2013-34 § 4.03(e).
Instead, the money was lost to the family’s unsuccessful business. And, regardless,
the tax court noted that “[t]he significant benefit factor favors relief or at worst is
neutral.” Fourth, there is no evidence that Jones was in poor health during the
relevant period. The tax court therefore did not clearly err in finding those factors
to be neutral. And given Jones’s poor record of tax compliance and the absence of
any factor weighing strongly in her favor, the tax court did not abuse its discretion
by concluding that equitable relief was not warranted.
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AFFIRMED.
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