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Petitioner testified that she has made a good faith effort
to comply with Federal tax laws. Respondent did not cross-
examine petitioner on this point and offered no contrary
evidence. Petitioner attached to her reply brief 18 original
canceled checks for $100, payable to the Internal Revenue
Service, for each of the months for which respondent claims she
is in arrears.3 Respondent concedes that petitioner is not late
or in arrears on any tax obligations other than the 1983 tax
liability. We do not consider respondent’s posttrial factual
allegations because petitioner did not have the opportunity to
dispute them at trial.
D. Conclusion
Respondent points out that petitioner knew or had reason to
know of Ferrarese’s embezzlement before he signed her name to
their 1983 return. However, we believe respondent did not give
adequate weight to other important factors. Petitioner will
suffer economic hardship if relief is not granted, the
embezzlement income was solely attributable to Ferrarese, she did
not significantly benefit from the embezzlement income, and she
has complied with Federal tax laws since 1983. We conclude that
respondent’s denial of relief under section 6015(f) was an abuse
of discretion and that, on the basis of all the facts and
3 Petitioner also sent a payment for December 1999 but did
not attach the canceled check because respondent did not cash it.
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