- 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 NextLast modified: May 25, 2011