- 15 - prevents a taxpayer from qualifying for relief as an innocent spouse. Park v. Commissioner, supra at 1292; Purcell v. Commissioner, 826 F.2d 470, 473 (6th Cir. 1987), affg. 86 T.C. 228 (1986); Bokum v. Commissioner, 94 T.C. 126, 138 (1990), affd. 992 F.2d 1132 (11th Cir. 1993). In the instant case, the parties stipulated that petitioner filed a joint return with Ms. Dawson for 1988, notwithstanding that the signature on the return purporting to be petitioner’s is not in fact his.5 Respondent also concedes that there was a substantial understatement of tax attributable to grossly erroneous items of Ms. Dawson on the return. Respondent contends, however, that petitioner knew or had reason to know of the substantial understatement and that it is not inequitable to hold petitioner liable for the deficiency attributable to the substantial understatement. The knowledge test, as stated above, requires a taxpayer to show that, at the time of signing a joint return, he or she did not know and had no reason to know of the substantial understatement of tax on the return. The relevant knowledge is of the transaction giving rise to the income omitted from the return, rather than of the tax consequences of such transaction. 5 The failure of one spouse to sign a return does not prevent such return from being considered a joint return if the nonsigning spouse intended to file a joint return. See Shea v. Commissioner, 780 F.2d 561, 567 (6th Cir. 1986), affg. in part and revg. and remanding in part T.C. Memo. 1984-310; Estate of Campbell v. Commissioner, 56 T.C. 1, 12 (1971).Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011