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but accept the separation agreement as the model for the ultimate
division of property.
Although petitioner continued to live with Philip after
entering into the separation agreement, petitioner testified that
she and Philip lived separately at the same location until she
was able to move. The fact that petitioner and Philip continued
to live together, as opposed to living separately and/or being
divorced, militates against an inequity finding. See sec.
1.6013-5(b), Income Tax Regs. We also note that Philip, in the
separation agreement, agreed to pay any tax deficiencies and save
petitioner harmless from any expense connected with tax audits.
The effect of such a promise has been considered by this Court on
several occasions.6 The impact on the relative equities of
holding a spouse liable if the other spouse promises to pay joint
tax deficiencies is dependent on whether the promise is reliable
or speculative. Although Philip's actions toward petitioner have
been amicable, his gambling habit, which was the root of
petitioners' marital problems, renders his promise to pay the tax
inconsequential. At the time of the separation agreement,
petitioners' bank accounts were overdrawn, and significant pieces
of property, like the condo, were fully mortgaged. Accordingly,
6 See, e.g., Stiteler v. Commissioner, T.C. Memo. 1995-279;
Foley v. Commissioner, T.C. Memo. 1995-16; Buchine v.
Commissioner, T.C. Memo. 1992-36, affd. 20 F.3d 173 (5th Cir.
1994); Henninger v. Commissioner, T.C. Memo. 1991-574; Knapp v.
Commissioner, T.C. Memo. 1988-109.
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