- 49 -
470, 473 (6th Cir. 1987), affg. 86 T.C. 228 (1986); Shea v.
Commissioner, 780 F.2d 561, 565 (6th Cir. 1986), affg. in
part and revg. in part T.C. Memo. 1984-310. The innocent
spouse exception is construed in view of the congressional
purpose of protecting innocent taxpayers from injustice. Sanders
v. United States, 509 F.2d 162, 166-167 (5th Cir. 1975).
Respondent concedes that petitioner meets all of the
requirements to qualify as an innocent spouse under section
6013(e) except whether she knew or had reason to know of the
understatements when she signed the returns, and whether it
is inequitable to hold her liable.13 We need not decide whether
petitioner wife knew or had reason to know of the understatements
because we conclude that it is not inequitable to hold her
liable.
b. Inequitable to Hold Petitioner Liable
To be entitled to relief as an innocent spouse, petitioner
wife must show that it would be inequitable to hold her liable
for the deficiencies in tax for the years in issue. Sec.
6013(e)(1)(D).
In deciding whether it is inequitable to hold a spouse
liable for a deficiency, we consider whether the purported
innocent spouse significantly benefited beyond normal support,
13 Respondent also points out that respondent disallowed
some of petitioners' deductions for lack of substantiation, and
deductions disallowed merely for lack of substantiation are not
grossly erroneous items.
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