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erroneous items are attributable to your
spouse.
Respondent advised petitioner of her right to administratively
appeal the decision but did not offer petitioner an Appeals
conference.
On or about September 14, 2001, petitioner administratively
appealed respondent’s denial of relief from joint and several
liability. Petitioner filed Form 12509, Statement of
Disagreement, in which she summarized the facts and law in
support of her request for relief. Petitioner maintained that
all of the partnership items on the returns were items properly
allocable to her spouse for purposes of section 6015(c) and
reiterated the reasons why she did not have actual knowledge of
any items giving rise to the deficiency. In addition, petitioner
stated that the burden of proof is on the Commissioner to show
actual knowledge, and she included a citation to King v.
Commissioner, 116 T.C. 198 (2001), which articulates a standard
for evaluating actual knowledge in erroneous deduction cases.
Petitioner’s statement further provided, in relevant part, as
follows:
The fact that the electing spouse signed the
partnership agreements, signed checks made payable to
Hoyt, signed correspondence to Hoyt, or acquiesced to a
joint investment with their spouse does not prove that
the electing spouse had actual knowledge that the
claimed items were not allowable. Moreover, the recent
conviction and sentencing of Jay Hoyt shows
affirmatively that the Barbaras [sic] had NO knowledge
of the factual circumstances that made the deductions
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