Tax Court in Brief | Soler v. Commissioner | Innocent Spouse Relief Under 6015(b) and (f) Denied

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The Tax Court in Brief – July 18th – July 22nd, 2022

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Tax Litigation:  The Week of July 18th, 2022, through July 22nd, 2022

Soler v. Comm’r, T.C. Memo. 2022-78 | July 18, 2022 | Marvel, J. | Dkt. No. 18639-19


Short Summary: In this case, Jennifer Soler petitioned for innocent spouse relief from joint and several liability under 26 U.S.C. § 6015(b) or (f) with respect to tax years 2012, 2013, 2014, and 2015. Mrs. Soler and her husband, Carlos Soler, were married for over 25 years. They have two children together and have never been legally separated. Mrs. Soler is the primary income earner. Mr. Soler has a bachelor’s degree in accounting and was primarily a stay-at-home father during the tax years in issue. Mr. Soler also operated a consulting business and a real estate business. The returns in issue were prepared by Mr. Soler and were signed by both Mr. and Mrs. Soler. Mr. Soler reported the income and expenses of his consulting and real estate businesses on separate Schedules C, Profit or Loss From Business. The IRS informed the Solers that their income tax returns were being examined. Later, the IRS mailed separate letters and Forms 4549–A, Income Tax Examination Changes for the 2012, 2013, and 2014 tax years. The IRS later issued a notice of deficiency that determined a deficiency in tax and a section 6662 accuracy-related penalty for each year. The IRS later performed an income-matching examination of the Solers’ 2015 tax return and determined that the 2015 return failed to include in income distributions from Mr. and Mrs. Soler’s qualified retirement accounts. So, the IRS issued a notice of deficiency for the 2015 tax year determining a deficiency in tax and a section 6662 accuracy-related penalty. About three years later, the IRS received a timely Form 8857, Request for Innocent Spouse Relief, from Mrs. Soler, requesting relief from joint and several liability for tax years 2012, 2013, 2014, and 2015 pursuant to section 6015(b), (c), and (f). She claimed that she was unaware of any income tax liabilities until the IRS began levying against her wages and that she believed Mr. Soler was unemployed during the years at issue.  The IRS preliminarily denied her request. Mrs. Soler submitted Form 12509, Innocent Spouse Statement of Disagreement, appealing the IRS’s preliminary determination, and her case was assigned to the IRS Office of Appeals (Appeals). Mrs. Soler argued that she relied on Mr. Soler to handle all of the family finances and tax returns. Appeals issued a final notice of determination, denying her request for relief. Mrs. Soler timely petitioned the Tax Court, and the case was tried.

Key Issues

Primary Holdings:

Key Points of Law:

Insights: Mrs. Soler was not innocent, and the evidence established that she was, more likely than not, intentionally ignorant of her and Mr. Soler’s tax situation with respect to the returns in issue. To obtain equitable relief under section 6015(f), the taxpayer bears the burden of presenting evidence to support an array of factors. Each factor is important to the determination, and the Tax Court will, in performing its administrative court function, carefully weigh the factors based on the evidence presented. It is not an easy row to hoe. Mrs. Soler, being educated and the primary income-earner in the household, endured quite the uphill battle only to find that her request for relief would be denied.