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circumstances giving rise to the substantial understatement and,
thus, does not qualify as an innocent spouse under section
6013(e)(1)(C).
Moreover, we find that Mrs. Hall failed to meet the inequity
requirements of section 6013(e)(1)(D). Whether it is inequitable
to hold a spouse liable is to be determined on the basis of all
the facts and circumstances. Sec. 6013(e)(1)(D); sec. 1.6013-
5(b), Income Tax Regs. Although section 6013(e), as amended, no
longer specifically requires us to determine whether a spouse
significantly benefited from the omitted income, this factor is
still to be taken into account in determining whether it is
inequitable to hold a spouse liable. Estate of Krock v.
Commissioner, 93 T.C. 672, 678 (1989). Mrs. Hall bears the
burden of proving that she did not significantly benefit from the
omitted income. Id.
Mrs. Hall argues that it would be inequitable to hold her
liable, because she did not receive any benefit from the
distribution in the form of better day-to-day living conditions.
Mrs. Hall's day-to-day living conditions do not appear to have
improved as a result of the distribution. However, of the cash
distributed from the Plan in 1988, $474,768.81 was transferred to
an account held jointly by Mr. and Mrs. Hall. Both Mr. and Mrs.
Hall executed the deposit agreement for the account. In
addition, a certificate of deposit held by the Plan was redeemed
and the proceeds were used to purchase a money market certificate
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