United States Tax Court
Washington, DC 20217
Ana Margarita Fiengo, Petitioner, and ) Pascual E. Fiengo, Sr., Intervenor )
)
Petitioners )
) Docket No. 1250-20
v. )
)
Commissioner of Internal Revenue, )
)
Respondent
ORDER OF SERVICE OF TRANSCRIPT
Pursuant to Rule 152(b) of the Tax Court Rules of Practice and Procedure, it is
ORDERED that the Clerk of the Court shall transmit herewith to petitioner, intervenor, and to the Commissioner a copy of the pages of the transcript of the trial in this case before the undersigned judge at the Jacksonville, Florida remote session containing his oral findings of fact and opinion rendered at the conclusion of the trial session at which the case was heard.
In accordance with the oral findings of fact and opinion, a decision will be entered for respondent.
(Signed) Christian N. Weiler Judge
Served 02/03/22
1 Bench Opinion by Judge Christian N. Weiler 2 December 17, 2021 3 Ana Margarita Fiengo, Petitioner and Pascuzi E. Fiengo 4 Sr., Intervenor v. Commissioner 5 Docket No. 1250-20 6 THE COURT: This Court has decided to render 7 oral findings of fact and opinion in this case, and the 8 following represents the Court's oral findings of fact and 9 opinion. The oral findings of fact and opinion shall not 10 be relied upon as precedent in any other case. 11 This bench opinion is made pursuant to the 12 authority granted by section 7459(b) of the Internal 13 Revenue Code of 1986, as amended, and Rule 152 of the Tax 14 Court Rules of Practice and Procedure. Hereinafter in 15 this bench opinion, all section references are to the 16 Internal Revenue Code of 1986, as amended, in effect for 17 the years in issue, and all Rule references are to the Tax 18 Court Rules of Practice and Procedure. Dollar amounts are 19 rounded to the nearest dollar. 20 This case arises from respondent's Final Notice 21 of Determination denying petitioner's request for innocent 22 spouse relief from joint and several liability in respect 23 of underpayments of tax reported on joint Federal income 24 tax returns for the taxable years 2011, 2012, 2013, and 25 2014 (hereinafter "years in issue"). As of November 15,
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1 2021, petitioner owes $11,339 for the 2011 tax year; 2 $11,285 for the 2012 tax year; $4,062 for the 2013 tax 3 year; and $15,668 for the 2014 tax year, all of which are 4 comprised of unpaid taxes, penalties, and interest. 5 Petitioner filed these joint returns with 6 Pascual E. Fiengo, Sr., her now former spouse. Petitioner 7 filed a timely petition for review with this Court. 8 Pascual Fiengo, intervenor, exercised his right to 9 intervene in this action pursuant to section 6015(e)(4) 10 and Rule 325(b), and he enjoys the rights of a party in 11 this case. See Tipton v. Commissioner, 127 T.C. 214, 217 12 (2006). Both petitioner and intervenor resided in Florida 13 at the time the petition was filed. 14 Petitioner and intervenor appeared at trial pro 15 se. Edward A. Waters appeared on behalf of respondent. 16 The issue for decision is whether petitioner is entitled 17 to innocent spouse relief pursuant to section 6015(b), 18 (c), or (f) for the years in issue. 19 Background 20 The parties filed with the Court a stipulation 21 of facts, with accompanying exhibits, that is incorporated 22 herein by this reference. 23 Petitioner and intervenor filed joint Federal 24 income tax returns for the years in issue. The joint 25 returns filed for 2011, 2012, and 2013 were filed after
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1 the due date, including extensions. The joint return for 2 2014 was timely filed. Respondent accepted petitioner and 3 intervenor's joint returns for all years as filed. 4 Petitioner and intervenor jointly owned a 5 business. Intervenor acted as the tradesman and performed 6 the actual labor for the business, while petitioner did 7 paperwork for the business and performed other 8 administrative duties. Petitioner and intervenor listed 9 the business on Schedule E, Supplemental Income and Loss, 10 of their returns filed for the years in issue. Petitioner 11 and intervenor each received a Schedule K-1, Shareholder's 12 Share of Income, Deductions, Credits, etc., for income 13 related to their interest in the business during the years 14 in issue. The joint account transcripts for the years in 15 issue reflect underpayments of tax, primarily attributable 16 to income related to the business owned by petitioner and 17 intervenor. Petitioner was responsible for both the 18 personal and business finances of both petitioner and 19 intervenor from 1984 through 2018. 20 On or about November 16, 2018, intervenor filed 21 a Petition for Dissolution of Marriage. Pursuant to the 22 Final Judgment of Dissolution of Marriage and Order on 23 Report and Recommendation of General Magistrate, dated 24 April 6, 2021, petitioner and intervenor are now divorced. 25 Prior to their divorce being finalized, petitioner and
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1 intervenor lived separate and apart for more than 12 2 months. Petitioner has no dependents who are minor 3 children. 4 Petitioner filed Form 8857, Request for Innocent 5 Spouse Relief, which was received by respondent on or 6 about February 13, 2019. Respondent issued a Final Notice 7 of Determination to petitioner, dated November 15, 2019, 8 denying relief under section 6015(f). Petitioner filed a 9 petition with this Court on January 21, 2020, challenging 10 respondent's determination. Intervenor subsequently filed 11 a Notice of Intervention with this Court on August 3, 12 2020. 13 Petitioner's tax returns filed for the tax years 14 2016, 2017 reflect a filing status of "married filing 15 separate". Petitioner's tax returns filed for the tax 16 years 2018, 2019, and 2020, reflect a filing status of 17 "single". Petitioner's returns for 2016 and 2017 were 18 filed untimely, however she received a refund for both of 19 those years. Petitioner's tax returns for 2018, 2019, and 20 2020 were timely filed. 21 Discussion 22 Generally, married taxpayers may elect to file a 23 joint Federal income tax return. Section 6013(a). After 24 making the election, each spouse is jointly and severally 25 liable for the entire tax due. Section 6013(d)(3).
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1 Nevertheless, if certain requirements are met, the 2 requesting spouse may be relieved of joint and several 3 liability under section 6015. 4 Section 6015 provides a spouse with three 5 alternative avenues to relief: (1) full or partial relief 6 under subsection (b); (2) proportionate relief under 7 subsection (c); and (3) if relief is not available under 8 subsections (b) or (c) and taking into account all of the 9 facts and circumstances it would be inequitable to hold 10 the requesting spouse liable for all or a portion of the 11 unpaid tax, equitable relief under subsection (f). 12 Petitioner does not contend that she is entitled 13 to relief under section 6015(b) or (c). Furthermore, 14 relief is not available to petitioner under section 15 6015(b) or (c) in this case because the amounts due for 16 the years in issue are attributable to underpayments of 17 tax as opposed to understatements of tax or tax 18 deficiencies. 19 We therefore only need to address whether 20 petitioner is entitled to relief under section 6015(f). 21 Section 6015(e)(7) provides that the Court's 22 review of a determination made under that section shall be 23 reviewed de novo and shall be based upon the 24 administrative record established at the time of the 25 determination and any additional newly discovered or
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1 previously unavailable evidence. Petitioner, the 2 requesting spouse, bears the burden of proving that she is 3 entitled to relief. Rule 142(a); Porter v. Commissioner, 4 132 T.C. 203, 210 (2009). 5 In Revenue Procedure 2013-34, the Commissioner 6 prescribed a nonexclusive list of factors that are 7 considered in determining whether equitable relief should 8 be granted to a requesting spouse. Although the Court 9 consults these guidelines when reviewing the 10 Commissioner's denial of relief, see Washington v. 11 Commissioner, 120 T.C. 137, 147-152 (2003), the Court is 12 not bound by them inasmuch as our analysis and 13 determination ultimately turn on an evaluation of all the 14 facts and circumstances. See Pullins v. Commissioner, 136 15 T.C. 432, 438-439 (2011). 16 Revenue Procedure 2013-34, section 4.01 sets 17 forth threshold conditions that must be satisfied before 18 the Commissioner will consider a request for equitable 19 relief under section 6015(f). There is no dispute that 20 petitioner satisfies the threshold conditions. At trial 21 it was established that a portion of the underpayment tax 22 liabilities at issue are attributable to petitioner. 23 Accordingly, we find that relief for petitioner is 24 available only as to the portion of income attributable to 25 intervenor, as provided in in Revenue Procedure 2013-34,
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1 section 4.01(7). 2 If a requesting spouse meets the threshold 3 conditions for relief and is not eligible for streamlined 4 relief (as is the case here because petitioner admitted to 5 having knowledge of the underpayments at trial), the 6 Commissioner may grant full or partial equitable relief 7 after considering the following nonexclusive list of 8 factors provided in Rev. Proc. 2013-34, sec. 4.03: (1) 9 whether the requesting spouse was separated or divorced 10 from the nonrequesting spouse when the IRS makes its 11 determination; (2) whether the requesting spouse will 12 suffer any economic hardship if relief is not granted; (3) 13 whether (in an underpayment case) on the date the joint 14 return was filed the requesting spouse did not know and 15 had no reason to know that the nonrequesting spouse would 16 not or could not pay the tax liability; (4) whether the 17 requesting or nonrequesting spouse has a legal obligation 18 to pay the outstanding Federal income tax liability; (5) 19 whether the requesting spouse significantly benefitted 20 from the unpaid income tax liability; (6) whether the 21 requesting spouse has made a good faith effort to comply 22 with Federal income tax laws for the taxable years 23 following the taxable years to which the request for 24 relief relates; and (7) whether the requesting spouse was 25 in poor physical or mental health at the time the returns
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1 for which relief is requested were filed, or at the time 2 the requesting spouse requested relief. Any indication of 3 abuse or the exercise of financial control by the 4 nonrequesting spouse is a factor that may impact the other 5 factors. Revenue Procedure 2013-34, section 4.03(2). 6 In making a determination under section 6015(f), 7 we consider the enumerated factors as well as any other 8 relevant factors. No single factor is dispositive. See 9 Pullins v. Commissioner, 136 T.C. at 448. 10 1. Marital Status 11 Petitioner and intervenor divorced in April 12 2021, which was several years after respondent made his 13 determination. Therefore, we deem this factor to be 14 neutral. 15 2. Economic Hardship 16 A requesting spouse will suffer economic 17 hardship if payment in part or all of the tax liability 18 "will cause the requesting spouse to be unable to pay 19 reasonable basic living expenses". Revenue Procedure 20 2013-34, section 4.03(2)(b); see section 301.6343- 21 1(b)(4)(i), Procedure & Administration Regulations. The 22 determination as to what constitutes a reasonable amount 23 for basic living expenses may vary with the circumstances 24 of the individual taxpayer but will not include the 25 maintenance of an affluent or luxurious lifestyle. Id.
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1 Petitioner did not present any evidence that she 2 would face economic hardship if she is required to pay any 3 part of the tax liabilities for the years in issue. 4 Accordingly, we find that petitioner would not face 5 economic hardship if she was denied relief, and this 6 factor is therefore neutral. 7 3. Knowledge or Reason to Know 8 In the case of an underpayment of tax due, this 9 factor turns on whether, as of the date the return was 10 filed or the date the requesting spouse reasonably 11 believed the return was filed, the requesting spouse knew 12 or had reason to know that the nonrequesting spouse would 13 not or could not pay the tax at the time or within a 14 reasonable time after the filing of the return. Revenue 15 Procedure 2013-34, section 4.03(2)(c)(ii). 16 At trial, petitioner acknowledged that she held 17 check writing authority over both business and personal 18 accounts and handled the payment of business expenses and 19 bills for at least some of the relevant time period. We 20 therefore conclude that petitioner had knowledge of the 21 underpayment, and this factor weighs against relief. 22 4. Legal Obligation 23 Petitioner and intervenor's Final Judgment of 24 Dissolution of Marriage and Order on Report and 25 Recommendation of General Magistrate, dated April 6, 2021,
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1 does not impose a legal obligation on either petitioner or 2 intervenor to pay outstanding income tax liabilities. 3 Revenue Procedure 2013-34, section 4.03(2)(d). Therefore, 4 this factor is neutral. 5 5. Significant Benefit 6 This factor calls for an evaluation of whether 7 the requesting spouse received a significant benefit, 8 beyond normal support, from the underpayment of tax. 9 Revenue Procedure, section 4.03(2)(e). Normal support is 10 measured by the circumstances of the particular parties. 11 Porter v. Commissioner, 132 T.C. at 212. 12 There is no indication in the record that 13 petitioner lived an extravagant lifestyle during the years 14 in issue. Although it is likely petitioner received some 15 benefit from the underpayments of tax, we cannot say on 16 the record before us that she received a significant 17 benefit within the meaning of Revenue Procedure 2013-34. 18 Therefore, this factor is neutral. 19 6. Compliance with Tax Laws 20 Respondent asserts that petitioner has not fully 21 complied with the income tax laws for the years following 22 the tax years in issue. Petitioner disputes this and 23 asserts that her subsequent tax returns were correctly and 24 timely filed. The record indicates that petitioner filed 25 her returns for 2016 and 2017 untimely. Petitioner's
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1 2018, 2019, and 2020 tax returns, however, were timely 2 filed. Accordingly, we find that petitioner made a good 3 faith effort to comply with Federal income tax laws but 4 she was not in full compliance. Revenue Procedure 2013- 5 34, section 4.03(2)(f)(iii). Therefore, this factor is 6 neutral. 7 7. Mental or Physical Health 8 The record does not establish that petitioner 9 was in poor physical or mental health at any relevant 10 time. Revenue Procedure 2013-34, section 4.03(2)(g). 11 Considering all the circumstances, this factor is neutral. 12 8. Abuse 13 Abuse comes in many forms, including efforts to 14 control, intimidate, or undermine the requesting spouse's 15 ability to reason independently and be able to do what is 16 required under Federal tax laws. Revenue Procedure 2013- 17 34, section 4.03(c)(iv)(g). All the facts and 18 circumstances are considered in determining whether a 19 requesting spouse was abused. Id. 20 Petitioner did not allege in her Form 8857 that 21 she was a victim of spousal abuse, domestic violence, or 22 suffering the effects of such abuse during any of the tax 23 years relief is requested or when any of the returns were 24 filed during the years in issue. Petitioner did, however, 25 allege in her petition that her relationship with
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1 intervenor was one of "intimidation and control, a form of 2 abuse". While the Court takes allegations of abuse 3 seriously, the record does not support a finding that 4 intervenor abused petitioner, nor did any alleged abuse 5 prevent petitioner from complying with Federal tax laws. 6 Conclusion 7 In section 6015(f) cases, we do not simply count 8 the above-mentioned factors. We evaluate all of the 9 relevant facts and circumstances to reach a conclusion. 10 See Pullins v. Commissioner, 136 T.C. at 448; Revenue 11 Procedure 2013-34, sections 3.05 and 4.03(2). In 12 evaluating the relevant factors, we conclude that the 13 knowledge factor weighs heavily against relief for 14 petitioner. 15 Given the record before us, we find that it 16 would not be inequitable to deny petitioner spousal relief 17 for the years in issue. We have considered all of the 18 arguments made by the parties and, to the extent they are 19 not addressed herein, we find them to be moot, irrelevant, 20 or without merit. To reflect the foregoing, an 21 appropriate decision will be entered for respondent. 22 This concludes the Court's oral findings of fact 23 and opinion in this case. 24 (Whereupon, at 10:30 a.m., the above-entitled 25 matter was concluded.)
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1 CERTIFICATE OF TRANSCRIBER AND PROOFREADER 2 CASE NAME: Ana Margarita Fiengo, Petitioner and Pascuzi 3 E. Fiengo Sr., Intervenor v. Commissioner 4 DOCKET NO.: 1250-20 5 We, the undersigned, do hereby certify that the 6 foregoing pages, numbers 1 through 15 inclusive, are the 7 true, accurate and complete transcript prepared from the 8 verbal recording made by electronic recording by Donna 9 Boardman on December 17, 2021 before the United States Tax 10 Court at its remote session in Jacksonville, FL, in 11 accordance with the applicable provisions of the current 12 verbatim reporting contract of the Court and have verified 13 the accuracy of the transcript by comparing the 14 typewritten transcript against the verbal recording. 15 16 17 18 _______________________________________________ 19 Meribeth Ashley, CET-507 1/3/22 20 Transcriber Date 21 22 23 _______________________________________________ 24 Lori Rahtes, CDLT-108 1/3/22 25 Proofreader Date