Spouses of TPs may have fast track to innocent spouse relief

[jcolvin2]

From today's Tax Court opinion in Thomassen v Comm'r, T.C. Memo. 2011-88, addressing some of the criteria for 6015(f) (equitable relief):

http://www.ustaxcourt.gov/InOpHistoric/ ... CM.WPD.pdf

That leaves condition (7)--that the liability from which
relief is sought be attributable to items of the nonrequesting
spouse. Respondent argues that condition (7) is not satisfied.
We have held herein that petitioner is ineligible for relief
under section 6015(c) because she could not establish which
portions of the deficiencies for the years at issue were
allocable to her. We reached this conclusion in view of the fact
that petitioner earned income during the years at issue as a
professional cellist and that the Thomassens reported investment,
rental, and farming income in 1969 that had not been shown to be
solely allocable to Dr. Thomassen. For these same reasons,
petitioner might not satisfy condition (7) with respect to all
liabilities at issue.

However, one of the exceptions to condition (7) enumerated
in Rev. Proc. 2003-61, supra, is that where the requesting spouse
establishes that he or she was a victim of abuse, equitable relief may be granted notwithstanding that the deficiency may be
attributable in part or in full to an item of the requesting
spouse. Rev. Proc. 2003-61, sec. 4.01(7)(d), states:

Abuse not amounting to duress. If the requesting spouse
establishes that he or she was the victim of abuse prior to
the time the return was signed, and that, as a result of the
prior abuse, the requesting spouse did not challenge the
treatment of any items on the return for fear of the
nonrequesting spouse’s retaliation, the Service will
consider granting equitable relief although the deficiency
or underpayment may be attributable in part or in full to an
item of the requesting spouse.

The caselaw construing what constitutes abuse not amounting
to duress29 requires a case-by-case analysis of whether there was
enough abuse to make it reasonable to conclude that the
requesting spouse was impeded from acquitting his or her
obligations under the Internal Revenue Code. See Nihiser v.
Commissioner, T.C. Memo. 2008-135 (and cases cited therein).
Abuse for this purpose may be physical or solely psychological.
Id. There must be substantiation, or at least specificity,
regarding the claimed abuse; generalized claims of physical or
emotional abuse are insufficient. See id.

As our findings reflect, petitioner adduced specific
evidence concerning Dr. Thomassen’s propensity to inflict
psychological abuse. There was credible testimony that his tirades drove one of his children with a fragile psyche to
attempt suicide. Another daughter’s college friends were so
appalled after witnessing a weekend’s worth of Dr. Thomassen’s
behavior that they urged petitioner to find shelter for herself
and the younger children elsewhere. Petitioner consulted her
priest regarding her husband’s behavior, though he counseled
perseverance--perhaps mindful of Dr. Thomassen’s role as a devout
parishioner who attended daily Mass. The evidence also
demonstrates that Dr. Thomassen’s anxiety and rage were quite
susceptible of being triggered by matters relating to disputes
with the IRS. He conducted years-long litigation with the IRS in
which he pursued tax-protester positions to the effect that the
Government lacked authority to investigate his finances or to
impose an income tax. We are fully persuaded that petitioner endured circumstances which made her reluctant to challenge the treatment of any items on the joint returns in issue for fear of Dr. Thomassen’s psychological abuse. Consequently, the fact that
some of the deficiencies at issue may be attributable to items of
petitioner does not cause her to fail to satisfy condition (7).
See Rev. Proc. 2003-61, sec. 4.01(7)(d). She therefore satisfies
all seven threshold conditions in Rev. Proc. 2003-61, sec. 4.01,
for relief under section 6015(f).

*Edited to add link to case 4/22/11 1:46 pm PDT

[grixit]

Oooh, i see some ugly scenes ahead.

[Nikki]

Interesting in that the deemed abusive husband is deceased AND the deemed abused spouse is deceased.

The case was carried forward by a "special administrator" for the deceased spouse.

I've heard of dead people voting and being elected to office, but never heard of them (effectively) suing each other.

One interesting point remains open -- the deceased husband, obviously, was not able to enter the case as an intervenor nor to enter any evidence in his own defense as to the allegations of abuse.

[Cathulhu]

Oooh, i see some ugly scenes ahead.

Grixit, my friend, do you actually think these scenes aren't ugly already?