- 9 -
1. Knowledge or Reason To Know
This element is satisfied if the requesting spouse did not
know or have reason to know when she signed the returns that the
taxes would not be paid. Accordingly, petitioner must establish
that it was reasonable for her to believe that Mr. Cowdery would
pay the reported liabilities.
During their marriage, petitioner and Mr. Cowdery discussed
their unpaid income tax liabilities as well as their other
household finances. Petitioner and Mr. Cowdery also maintained a
joint bank account. There is no evidence, and petitioner does
not allege, that Mr. Cowdery kept their financial documents, such
as bills or bank statements, from her. Petitioner contends,
however, that she never questioned Mr. Cowdery about the payments
he said he would make on the liabilities, despite being aware of
the annual underpayments of income tax shown on their joint
returns. Petitioner also does not appear to have requested any
records from the IRS regarding what payments had been made, to
have examined bank records for payments, or to have done anything
at all to verify whether Mr. Cowdery made any payments toward the
tax liabilities. What petitioner did do was continue to file
jointly with Mr. Cowdery after she knew he was not making
payments to the IRS.
While we are sympathetic to petitioner’s situation with her
former husband, we have consistently applied the principle that
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011