DocketNumber: Docket No. 27513-09L
Citation Numbers: 106 T.C.M. 89, 2013 Tax Ct. Memo LEXIS 187, 2013 T.C. Memo. 178
Judges: MARVEL
Filed Date: 8/5/2013
Status: Non-Precedential
Modified Date: 4/18/2021
Decision will be entered under
MARVEL, Judge: Pursuant to sections
Some of the facts have been stipulated and *188 are so found. The stipulation of facts and facts drawn from stipulated exhibits are incorporated herein by this reference. Petitioner resided in Oregon when he petitioned this Court.
Petitioner married Rebecca S. Santa on July 16, 1983. During the course of the marriage Ms. Santa, who suffered from various addictions, sometimes made poor financial decisions and hid those decisions from petitioner. For example, Ms. Santa opened credit card accounts using post office boxes without petitioner's knowledge and forged petitioner's signature to the title to petitioner's vehicle so that she could sell it to obtain cash. During 2002 and possibly for some time *180 thereafter petitioner's relationship with Ms. Santa was "off and on" and petitioner and Ms. Santa sometimes resided apart.
Because of Ms. Santa's financial instability, petitioner maintained and used a separate bank account. Petitioner was not aware of the bank accounts that Ms. Santa used during 2002 and did not see any of the bank statements for the accounts she used.
In 2002 Ms. Santa withdrew $95,392 from a profit-sharing account that she owned. Petitioner did not know of Ms. Santa's profit-sharing account withdrawal and *189 did not benefit from it.
Petitioner and Ms. Santa filed a joint Form 1040, U.S. Individual Income Tax Return, for 2002. 2 Ms. Santa provided the information the return preparer used to prepare the 2002 joint return. Ms. Santa did not provide the preparer information regarding the $95,392 that she withdrew from the profit-sharing account or regarding wages from several of the jobs that she had during 2002, and this income was not reported on the joint return. Petitioner did not know at the *181 time the 2002 joint return was filed that Ms. Santa had failed to include the profit-sharing account withdrawal and some of her wage income on the joint return.
On July 12, 2004, respondent mailed to petitioner a Notice CP-2000, which proposed changes to petitioner and Ms. Santa's joint 2002 return. Petitioner then filed a Form 8857, Request for Innocent Spouse Relief (2004 Form 8857), with respect to his joint income tax liability for 2002. On December 20, 2004, respondent issued to petitioner a Letter 3661C, Requesting Spouse Preliminary Determination Letter, proposing to deny petitioner relief from joint liability for 2002.
On March 28, 2005, respondent mailed to petitioner and Ms. Santa separate notices of deficiency for 2002. The notice of deficiency addressed to petitioner did not mention petitioner's request for relief from joint liability, nor did it make a determination regarding that request. Petitioner and Ms. Santa filed separate petitions disputing respondent's deficiency determination for 2002.
In his petition at docket No. 11744-05S (2005 petition) petitioner requested relief from joint and several liability on the grounds that he was unaware that Ms. Santa had withdrawn the funds from her profit-sharing account. Petitioner did not *182 allege that he was separated from Ms. Santa. After filing his petition, petitioner *191 had limited correspondence or contact with respondent's employees or counsel. Petitioner did not notify the Court or respondent's counsel about any change of address during the pendency of the case.
The Court set petitioner's case for trial at the April 24, 2006, trial session in St. Paul, Minnesota. Petitioner failed to appear when his case was called from the calendar because he never received the notice scheduling the case for trial.
On April 24, 2006, respondent's counsel filed a motion to dismiss for lack of prosecution in docket No. 11744-05S. On May 3, 2006, the Court entered an order of dismissal and decision granting respondent's motion and denying petitioner's claim for relief under
On October 29, 2007, Ms. Santa filed a petition for dissolution of marriage without children in the Minnesota district court. *192 In her divorce petition Ms. Santa *183 stated that she had separated from petitioner on July 21, 2006. Petitioner and Ms. Santa divorced on May 17, 2008.
On May 16, 2008, respondent filed an NFTL against petitioner and Ms. Santa for the unpaid joint tax liability for 2002. On May 20, 2008, respondent issued to petitioner and Ms. Santa a notice of the NFTL filing.
On June 10, 2008, petitioner filed a second Form 8857 (2008 Form 8857) for 2002. In his 2008 Form 8857 petitioner stated that (1) he had been living apart from Ms. Santa since May 1, 2002; (2) he and Ms. Santa had divorced on May 17, 2008; (3) he and Ms. Santa maintained joint accounts in 2002 but he had limited or no use of the accounts; and (4) Ms. Santa "hid all bills from * * * [him] until collectors would call * * * [him] at work." 3 On June 12, 2008, petitioner filed a Form 12153, Request for a Collection Due Process or Equivalent Hearing, with respect to his 2002 tax liability, requesting section 6015 relief and an offer-in-compromise. 4*193
*184 On November 2, 2009, respondent mailed to petitioner a Notice of Determination Concerning Collection *194 Action(s) Under Section 6320 and/or 6330 (notice of determination), sustaining the filing of the NFTL on the grounds that petitioner's section 6015 request had been denied 5 and that he had submitted no financial information that could be used to determine whether any collection alternative would have been appropriate.
*185 On November 13, 2009, petitioner mailed to this Court his petition (2009 petition), contesting respondent's determination. In the petition, petitioner stated that he and Ms. Santa "were separated in 2002 but filed jointly". The only contention petitioner makes *195 in the 2009 petition is that he should be granted section 6015 relief for the portion of his tax liability attributable to Ms. Santa's withdrawal from her profit-sharing account and her unreported wages.
Because respondent denied petitioner's timely section 6015 request in a final notice of determination after conducting a section 6320 hearing, we would ordinarily have jurisdiction to review respondent's denial of his section 6015 request either (1) pursuant to
Generally, married taxpayers who file a joint Federal income tax return are jointly and severally liable for the tax reported or reportable on the return.
Petitioner seeks relief from the portion of his joint liability for 2002 arising from Ms. Santa's withdrawal from her profit-sharing account and her unreported wages. Because we find that petitioner is entitled to the full relief that he seeks under
Under
Relief under
Under
We have jurisdiction in this case under
When a court of competent jurisdiction enters a final judgment *200 on the merits of a cause of action, the doctrine of res judicata, if properly and timely invoked, binds the parties to the judgment as to all matters that were or could have been litigated and decided in the proceedings.
*190 Federal income taxes are determined annually, with each year being a separate cause of action. Res judicata is applied to bar subsequent proceedings involving the same tax year.
Petitioner contends that res judicata should not preclude his section 6015(c) claim because he did not specifically plead or otherwise request relief under
Petitioner's 2004 Form 8857 is not in the record. Petitioner's 2005 petition, filed June 27, 2005, does not invoke
Respondent contends that several of petitioner's statements show that he was eligible for relief under
On brief petitioner explains his previous statements that he separated from Ms. *203 Santa in 2002 or 2003 by stating that he and Ms. Santa had lived together sporadically since that time and were thus not living apart within the meaning of
In that for purposes of
*193 Like the taxpayer in
Because respondent has neither shown that
The parties agree that petitioner is eligible *205 to elect relief under
Respondent contends that petitioner knew that Ms. Santa had withdrawn the funds from the profit-sharing account when he signed the 2002 return because Ms. Santa had deposited the proceeds into a joint account that she shared with petitioner. 7 However, respondent has introduced no evidence to support his contentions. 8*207 Moreover, petitioner credibly testified that he maintained his own *195 bank account during 2002 and that he had no knowledge of Ms. Santa's use of any particular bank account or accounts. We hold that petitioner has satisfied all requirements for relief under
At *208 the hearing a taxpayer may raise any relevant issue, including appropriate spousal defenses, challenges to the appropriateness of the collection action, and collection alternatives, such as an offer-in-compromise or an installment agreement.
Pursuant to
Because we conclude that petitioner is entitled to relief under
We have considered the parties' remaining arguments and, to the extent not discussed above, conclude that those arguments are irrelevant, moot, or without merit.
*198 Because it is unclear whether any portion of the outstanding liability is attributable to petitioner and to reflect the foregoing,
1. Unless otherwise indicated, all section references are to the 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 parties stipulated that petitioner and Ms. Santa jointly filed a 2002 tax return. Petitioner testified, however, that the signature in his name on the 2002 return does not appear to be his and that Ms. Santa had previously forged his signature for financial reasons. Petitioner also testified that he did not recall whether he had signed the return. However, because the parties stipulated that petitioner and Ms. Santa filed the joint return, and we so find, we do not address whether petitioner actually signed the return.↩
3. In a letter dated May 10, 2008, petitioner wrote that "[w]e have been separated since 2003 and finally divorce[d]."↩
4. On October 3, 2008, Tax Examiner Diana Kmit prepared workpapers with respect to petitioner's request for relief from his joint liability for 2002. Tax Examiner Kmit preliminarily proposed to grant petitioner relief under
5. The notice of determination does not explain why the Appeals Office denied petitioner's sec. 6015 request. The administrative record, however, reveals that on August 20, 2009, Appeals Officer Gloria L. Griffin wrote in an Appeals Transmittal and Case Memo that petitioner "has not provided any information which would qualify for relief of liability under * * *
6. Relief is also unavailable in certain situations involving fraud.
7. Although we asked the parties to brief the merits of petitioner's claim for relief under
Additionally, respondent never addressed the issue of whether petitioner knew that Ms. Santa had unreported wage income when he signed the 2002 return. We conclude that respondent conceded this issue.↩
8. At trial petitioner's counsel objected to the introduction of any out-of-court statements of Ms. Santa appearing in the administrative record. Respondent's counsel conceded that any such statements would be hearsay. Accordingly, we admitted the administrative record into evidence subject to petitioner's hearsay objection.
9. The term "Secretary" means the Secretary of the Treasury or his delegate.
Murphy v. Commissioner of IRS , 469 F.3d 27 ( 2006 )
Kathryn Cheshire v. Commissioner of Internal Revenue , 282 F.3d 326 ( 2002 )
Deihl v. Comm'r , 134 T.C. 156 ( 2010 )
Charles G. Fargo Elizabeth A. Fargo v. Commissioner of ... , 447 F.3d 706 ( 2006 )
Keller v. Commissioner , 568 F.3d 710 ( 2009 )
Commissioner v. Sunnen , 68 S. Ct. 715 ( 1948 )
Koprowski v. Comm'r , 138 T.C. 54 ( 2012 )
Gray v. Comm'r , 140 T.C. 163 ( 2013 )
Sego v. Commissioner , 114 T.C. 604 ( 2000 )
Lunsford v. Comm'r , 117 T.C. 183 ( 2001 )
Goza v. Commissioner , 114 T.C. 176 ( 2000 )