This is a case study paper. The case is on "Rogers Case" the word document is attached for your viewing. Please read and follow "Instructions for Case" I have also included a "Case Sample" for you to use as an outline, this is how the professor likes the case summary to look like, as you can see its 1 page MAX. No word count but it needs to look like the "Case Sample". I have started a word doc for you to use as I added the line 1 to it "Case". Please let me know if you have any questions. This is for my class Accounting- Principles of Federal Income Tax
Website for citing: (https://checkpoint-riag-com.ruby.uhv.edu/app/main/doc?DocID=i2d09e34866a0c1ece0d3daddfa81f2e3&cmpType=MAIN&collId=COMBINE_SOURCES%241&docTid=T0TCM%3A58015.1-1&feature=tfederal&lastCpReqId=5571b3&searchHandle=CMPST.10895#" https://checkpoint-riag-com.ruby.uhv.edu/app/main/doc?DocID=i2d09e34866a0c1ece0d3daddfa81f2e3&cmpType=MAIN&collId=COMBINE_SOURCES%241&docTid=T0TCM%3A58015.1-1&feature=tfederal&lastCpReqId=5571b3&searchHandle=CMPST.10895#) Vikki L. Rogers, et vir., TC Memo 2021-20, Code Sec(s). 6015, 02/22/2021 Tax Court Memorandum Decisions (Current Year) (RIA) Tax Court & Board of Tax Appeals Memorandum Decisions Vikki L. Rogers, et vir. v. Commissioner, TC Memo 2021-20 , Code Sec(s) 6015. VIKKI L. ROGERSAfter filing the petition, petitioner returned to her maiden name, Triggs. , Petitioner, AND BRIAN D. ROGERS, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent. Case Information: [pg. 223] Code Sec(s): 6015 Docket: Dkt. No. 8930-17 Date Issued: 02/22/2021. Judge: Opinion by Nega, J. Tax Year(s): Years 2010, 2011. Disposition: Decision for Commissioner. HEADNOTE 1.Joint returns-innocent spouse relief-knowledge or reason to know; allocation of items; equitable relief. Taxpayer was denied innocent spouse relief under Code Sec. 6015(b) , Code Sec. 6015(c) , and Code Sec. 6015(f) from her and former husband/intervenor's joint liabilities relating to disallowed deductions for their event rental business. Notably, taxpayer failed Code Sec. 6015(b) 's knowledge/reason to know test when considering her familiarity with bookkeeping, her prior work experience at bank, and lack of evidence that former husband tried to deceive or hide anything [pg. 224] from her. Similarly, evidence that she had actual knowledge of items allocable to former husband that gave rise to subject understatements when she signed stated years' returns disqualified her from Code Sec. 6015(c) relief. And Code Sec. 6015(f) relief claim failed because although she met threshold conditions for relief, she didn't qualify for streamlined determination and failed overall factors test. Key factors thereunder included that she was intimately involved with rental business, knew of items giving rise to understatement, and failed to keep current with her tax obligations after years at issue. Countervailing facts that she would suffer economic hardship from being held liable and didn't significantly benefit from understatements weren't enough to outweigh above. Reference(s): ¶ 60,155.01(12) ; ¶ 60,155.04(3) Code Sec. 6015 Syllabus Counsel Michael J. Calabrese, for petitioner. Andrew Y. Belter, for intervenor. George W. Bezold and Mark J. Miller, for respondent. NEGA, Judge MEMORANDUM FINDINGS OF FACT AND OPINION Pursuant to section 6015(e)(1), petitioner seeks review of respondent's determination that she is not entitled to relief from joint and several liability under section 6015(b), (c), or (f) for tax years 2010 and 2011 (years at [*2] issue) with respect to the joint Federal income tax returns that she filed with intervenor, her former spouse. 2 FINDINGS OF FACT Some of the facts have been stipulated and are so found. The stipulation of facts and the attached exhibits are incorporated herein by this reference. Both petitioner and intervenor individually resided in Wisconsin when the petition was filed. Petitioner and intervenor married in 1993. They jointly owned Capital City Tent Rental, LLC (Capital City Tent), a Wisconsin limited liability company that rented and set up tents, tables, and chairs. 3 Petitioner is a high school graduate. Because she has some banking education and had worked at a bank for a few years, petitioner was primarily responsible for maintaining Capital City Tent's books and records, hiring a payroll company, tracking billing, making loan payments, and making credit card payments. Petitioner also had signature [*3] authority on Capital City Tent's bank account, prepared and signed sales tax returns and unemployment tax contribution forms on behalf of the business, and worked with an accountant to prepare Capital City Tent's tax returns. Intervenor was responsible for: (1) managing employees, (2) maintaining customer relations, (3) answering phones, (4) accepting orders, (5) preparing and submitting job bids, (6) making needed repairs, and (7) assisting with bookkeeping. Additionally, petitioner solely owned two other businesses: (1) Capital City Rentals, Inc. (Capital City Rentals), which rented bounce houses and jumping castles, and (2) Twilight Pony Rides, which offered pony rides. Intervenor occasionally provided the manual labor for these businesses. Petitioner also engaged Capital City Tent's accountant to prepare tax returns for Capital City Rentals. For the years at issue petitioner and intervenor untimely filed joint Forms 1040, U.S. Individual Income Tax Return. On their 2010 they reported that no tax was due and requested a refund of $4,547. On their 2011 return they reported a tax liability of $5,608 and requested a refund of $7,324. Respondent audited these tax returns and determined deficiencies, finding that petitioner and intervenor had understated their tax liabilities because of disallowed deductions associated with Capital City Tent and claimed on Schedules E, Supplemental Income and Loss. [*4] On January 7, 2014, petitioner and intervenor signed Forms 4549, Income Tax Examination Changes, consenting to the assessment and collection of the deficiency amounts, plus penalties and interest, totaling $11,609 and $21,672 for tax years [pg. 225] 2010 and 2011, respectively. Neither petitioner nor intervenor has paid the assessed tax, penalties, and interest for the years at issue. On July 1, 2014, the Circuit Court, Branch 8, in Dane County, Wisconsin, issued petitioner and intervenor a decree of divorce. On August 23, 2014, the court entered a judgment of divorce incorporating a Marital Settlement Agreement (agreement) between petitioner and intervenor. 4 Pursuant to the agreement, intervenor was awarded the "business or professional interests" in Capital City Tent. The agreement stipulated, however, that petitioner and intervenor remained jointly liable for the assessed tax liabilities, penalties, and interest for the years at issue. On July 31, 2015, respondent received from petitioner a Form 8857, Request for Innocent Spouse Relief, seeking relief for tax years 2006 through 2011. On the Form 8857, petitioner reported a total monthly income of $1,297 and total monthly expenses of $2,203. Petitioner stated that she was not involved [*5] in handling the household finances, was not involved in preparing her and intervenor's joint tax returns for the years at issue, and had no knowledge that anything was incorrect or missing when the returns were filed. Petitioner further represented on the Form 8857 that neither she nor intervenor incurred any large expenses, such as trips, home improvements, or private schooling, or made any large purchases, such as automobiles, appliances, or jewelry, during the years at issue. Petitioner asserted that she was a victim of spousal abuse; however, she noted that law enforcement was never called, intervenor was never arrested or charged, and she never sought help from a local domestic violence program. Petitioner also averred that she was not in poor mental or physical health when she and intervenor jointly filed their Federal income tax returns for tax years 2006 through 2011 or at the time that she filed the Form 8857. On August 18, 2016, respondent issued a notice of preliminary determination denying petitioner's request for innocent spouse relief for the years at issue under section 6015(b), (c), and (f). 5 On September 19, 2016, petitioner timely submitted Form 12509, Statement of Disagreement, requesting reconsideration. In February 2017 petitioner came into compliance with her then [*6] current tax return filing obligation by filing her Federal income tax return for tax year 2016, and she also filed her tax returns for tax years 2012 through 2015. On February 15, 2017, intervenor submitted a protest of petitioner's appeal, objecting to the requested relief. The Internal Revenue Service (IRS) Office of Appeals (Appeals Office) issued to petitioner a final determination on March 23, 2017, denying her request for relief from joint and several liability under section 6015(b), (c), and (f) for the years at issue. On April 24, 2017, petitioner timely filed a petition to this Court appealing the determination, and on May 30, 2017, intervenor filed a notice of intervention. Trial was held on March 26, 2019, in Milwaukee, Wisconsin. The Court finds, inter alia, that the trial record does not support petitioner's claims that she was not involved in handling the household expenses or in preparing her and intervenor's joint tax returns for the years at issue. We also find a lack of support in the record for petitioner's claim of spousal abuse. The Court does, however, accept as true that petitioner did not receive a level of significant benefit that would undermine her claim for relief under section 6015(f). [*7] OPINION Generally, married taxpayers may elect to file joint Federal income tax returns. Sec. 6013. Section 6013(d)(3) provides that, if a joint return is filed, each spouse is jointly and severally liable for the entire tax due for that year. A requesting spouse may be relieved from joint and several liability under section 6015 if certain conditions are met. Section 6015 provides a re[pg. 226] questing spouse with three alternatives for relief from joint and several liability: (1) full or partial relief under subsection (b), (2) proportionate relief under subsection (c), or (3) if relief is not available under subsection (b) or (c), equitable relief under subsection (f). Except as otherwise provided in section 6015, petitioner, as the taxpayer requesting relief, bears the burden of proof. 6 See Rule 142(a); Alt v. Commissioner, 119 T.C. 306, 311 (2002), aff'd, 101 F. App'x 34 [93 AFTR 2d 2004-2561] (6th Cir. 2004). [*8] I. Section 6015(b) Section 6015(b)(1) provides that a requesting spouse shall be relieved of joint and several liability for a particular year if each of the following requirements is met: (1) a joint return was filed for the year in issue; (2) the return contains an understatement attributable to an erroneous item of the nonrequesting spouse; (3) the requesting spouse establishes that, in signing the return, he or she did not know and had no reason to know of the understatement; (4) it is inequitable to hold the requesting spouse liable for the deficiency attributable to the understatement; and (5) the requesting spouse's claim for relief is timely. Failure to meet one of these requirements precludes relief under section 6015(b). Alt v. Commissioner, 119 T.C. at 313. Petitioner does not satisfy the third condition under section 6015(b). To qualify for section 6015(b) relief, a requesting spouse cannot have had actual knowledge and a reason to know of the understatement at the time she signed the joint return. Sec. 6015(b)(1)(C). With respect to the knowledge requirement under section 6015(b)(1)(C), however, the U.S. Court of Appeals for the Seventh Circuit, to which this case is appealable, has adopted a more lenient approach--the "reason to know" standard--in cases where, as here, the understatement results from improper deductions (versus cases involving unreported income). Resser v. [*9] Commissioner, 74