Attorney-at-Law

STREAMLINER – PART DEUX

In Uncategorized on 11/04/2020 at 16:53

It’s almost six (count ’em, six) years since I saw a Tax Court case that actually parsed a streamlined innocent spouser per Rev Proc 2013-34, 2013-43 RB 397, through to conclusion. See my blogpost “Streamliner,” 12/4/2014, for the debut.

Today, Colleen Michelle Leith makes the cut, as Judge Vasquez gives us Colleen Michelle Leith and Oraine J. Leith, 2020 T. C. Memo. 149, filed 11/4/20. IRS concedes Colleen Michelle’s Section 6015(f) plea; of course she flunks Section 6015(b) and (c) to get there.

Fact specific, of course, so you’ll need to parse Judge Vasquez’s grind through “the daily grist of judicial life,” 2020 T. C. Memo. 149, at p. 25. Anyway, Colleen Michelle’s account of Oraine’s abusive behavior carries the day with Judge Vasquez, even though Tax Examiner B (name omitted) paid little attention to Colleen Michelle’s tale of woe. Maybe TE B’s skepticism had some colorable foundation, because Colleen Michelle first filed her Form 8857 with “No” checked for spousal abuse, but filed a fresh Form 8857 a month later with the box checked “Yes.” 2020 T. C. Memo. 149, at p. 10.

Both Colleen Michelle and Oraine tried to wild-card some documents after trial. Judge Vasquez slaps them both down, even though this case was filed pre-Section 6015(e)(7) strict-record amendment, 2020 T. C. Memo. 149, at p. 3, footnote 2. Now, post-amendment, if you’re going streamliner in your case, build and guard that administrative record; make sure everything goes in at CCISO, and keep good lists of whatever IRS or CCISO tries to leave out.

I’ll just reiterate the streamliner rules as Judge Vasquez did.

“For the portions of the liabilities for which petitioner is eligible for relief under section 6015(f), Rev. Proc. 2013-34, sec. 4.02, sets forth circumstances under which the Commissioner will make a streamlined determination granting equitable relief to the requesting spouse. The requesting spouse is eligible for a streamlined determination by the Commissioner only in cases in which the requesting spouse establishes that she (1) is no longer married to the nonrequesting spouse (marital status requirement), (2) would suffer economic hardship if not granted relief (economic hardship requirement), and (3) did not know or have reason to know that the nonrequesting spouse would not or could not pay the underpayment of tax reported on the joint income tax return, or did not know or have reason to know that there was an understatement or deficiency on the joint income tax return (lack of knowledge requirement). Id. The requesting spouse must establish that she satisfies each of the three elements to receive a streamlined determination granting relief. Id.” 2020 T. C. Memo.149, at pp. 21-22.

Note that economic hardship (item 2 hereinabove in the immediately preceding paragraph set forth, as my paid-by-the-word colleagues would say) means either income of requesting spouse is below 250% of Federal poverty limit or monthly income of requesting spouse exceeds basic living expenses by less than $300. Colleen Michelle met the second of those.

As always, YMMV, prior results do not predict future performance, and, in the immortal words of the RAF Milverton base commander, then-Group Captain, later Air Chief Marshal, Sir Francis J. Fogarty, in Harry Watts’ immortal 1941 film, “Go in and flatten it…and good luck to you.”

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