Zaheen: Abuse, Financial Control and the Taxable Withdrawals Supported Equitable Spousal Relief

The Tax Court granted equitable spousal relief despite substantial earnings and the requesting spouse’s ownership of the retirement account that generated the omitted income. In Zaheen v. Commissioner, T.C. Memo. 2026-7 (Jan. 22, 2026), the decisive record included abuse, financial control and the difference between knowledge of an initial rollover and knowledge of later taxable distributions. The court relieved Dr. Asia Zaheen of a $120,510 deficiency and $24,102 penalty under section 6015(f). Zaheen, opinion at 1–2.

The initial rollover and later distributions were different transactions

Dr. Zaheen and Kamran Ehsan filed a joint 2019 return. The opinion reports that she earned more than $300,000 annually at the time of trial; that figure should not be presented as a finding of identical 2019 income. Ehsan controlled the household and medical-practice finances.

An initial $257,907 transfer from her retirement account to the KME Investment Trust qualified as a rollover. Later, three transfers totaling $257,000 paid down a home-equity line of credit. Another $700 went to an unrelated account. The taxable distributions totaled $257,700 and were omitted from the joint return. Knowledge of the original rollover did not establish actual knowledge of those later withdrawals. Zaheen, opinion at 5–6, 13–14.

The IRS conceded relief, but the intervening spouse opposed it

Dr. Zaheen raised spousal relief in her deficiency case. She conceded that sections 6015(b) and (c) did not apply. The IRS agreed to equitable relief under section 6015(f), but Ehsan intervened to oppose it, challenging the abuse evidence and pointing to the origin of the retirement funds. The court therefore had to adjudicate the claim despite the IRS’s position. Zaheen, opinion at 6–8.

The January memorandum opinion is linked here to a hosted copy of the court-issued document, corroborated against the official Tax Court docket, No. 13863-22. That docket records an intervenor appeal filed April 24, 2026. A later appellate disposition has not been verified in this analysis.

The abuse exception addressed the threshold attribution problem

Revenue Procedure 2013-34 generally requires the liability to be attributable to the other spouse, subject to exceptions. The court applied the abuse exception despite the requesting spouse’s ownership of the source account. It relied on the control and concealment surrounding the taxable withdrawals and the established abuse. This allowed consideration of relief; it was not a transfer of property ownership to the other spouse. Zaheen, opinion at 9–11.

Dr. Zaheen conceded that paying would not cause economic hardship. That prevented streamlined relief, but the court proceeded to the full facts-and-circumstances analysis. The absence of hardship was neutral in that analysis. Zaheen, opinion at 11–12.

The court examined knowledge in the context of the abuse

The court found no actual knowledge of the taxable distributions. It did find reason to know, including her education, signing without reviewing the return and concerns about financial secrecy. It then evaluated how abuse and control affected her ability to question the return safely.

The record included testimony from family and a housekeeper, police and child-protection involvement, a protective order and a criminal admission. The court credited the danger of challenging Ehsan’s financial decisions. Under the revenue procedure, that evidence mitigated the knowledge problem and made the factor favor relief. Zaheen, opinion at 13–17.

Two factors favored relief; five were neutral

Knowledge and health favored relief. On health, the court credited testimony that Dr. Zaheen felt stressed and depressed; it did not identify a clinical diagnosis of severe depression. Marital status, economic hardship, legal obligation, significant benefit and later tax compliance were neutral on this record. The court examined the use and control of the property and funds rather than treating every benefit as decisive. Zaheen, opinion at 12–19.

The court granted full relief after weighing the complete record. For a comparable review, distinguish the source account, the taxable transaction, actual knowledge, access to records and the effect of coercion. High earnings or a signature cannot replace that analysis, and evidence of abuse must be connected to the relief requested.