Hardin v. Comm’r, T.C. Memo. 2016-141, 2016 WL 4006806 (2016)
Facts: Husband and wife were married in During the marriage, the husband was partner in a law firm, and he also ran a sports management business. The wife was owner and president of a financial planning company. The husband was not involved with the operation of the wife’s business.
For 2009 and 2010, the parties filed joint tax returns.
Husband and wife were divorced in Missouri in 2011. Their divorce decree incorporated the settlement agreement, which gave each party all of the assets and liabilities of their respective businesses, and required each party to hold the other harmless from all business debts. There is no suggestion that the wife claimed any form of abuse in the divorce case.
The IRS examined the 2009 and 2010 returns, and found deficiencies. Some of these deficiencies arose from the husband’s law firm, and some arose from the wife’s financial planning business. Each party filed a petition for innocent spouse relief. The IRS agreed that each party was entitled to relief from liability for tax problems attributable to the other’s business.
The wife then filed an additional petition for innocent spouse relief from taxes attributable to her own business. In this petition, she argued for the first time that she was abused by the husband.
Issue: Is the wife entitled to innocent spouse relief from taxes arising from operation of her own business?
Answer to Issue: No
Summary of Rationale: The only issue before the court was discretionary innocent spouse relief under 6015(f). The seventh threshold condition normally requires proof that the tax liability is attributable at least in part to property or income of the nonrequesting spouse. The taxes at issue were on the wife’s business, so the seventh condition was facially not met. Continue reading →