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D. Conclusion
Respondent’s determination to deny petitioner relief under
section 6015(f) was principally based on his findings that
petitioner knew or had reason to know that the liability would
not be paid, and that approximately 40 percent of the unpaid
liability was attributable to petitioner. Since each of these
findings was arbitrary and without sound basis in fact, we
conclude that respondent’s denial of any relief was an abuse of
discretion.
Based on our review of all the facts and circumstances, we
conclude that there are several factors favoring relief.
Petitioner did not know, and had no reason to know, that the
liability would not be paid; the underpayment is only
attributable to petitioner to the extent of $900; petitioner and
Ms. Wiest are divorced; and petitioner did not benefit from the
underpayment. Weighing against relief is the absence of any
showing of hardship if relief is not granted and the fact that a
portion of the underpayment is attributable to petitioner. On
balance, we find that the factors favoring relief, to the extent
that the underpayment is not attributable to petitioner, outweigh
the factors supporting a denial of relief. Therefore, we hold
that petitioner is entitled to relief under section 6015(f) with
respect to $3,162 of the underpayment; that is, he is entitled to
relief with respect to all of the underpayment except the $900
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