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options provided an arguably colorable--albeit incorrect--basis
for the position taken on the joint returns.
There is no evidence that the deductions were frivolous,
fraudulent, phony, or otherwise so groundless as to be grossly
erroneous. Accordingly, the substantial understatements for the
taxable years at issue were not attributable to grossly erroneous
items. We need not consider the other requirements for
innocent spouse relief.9
In view of the foregoing,
Decision will be entered
under Rule 155 in docket No.
28233-91, and decision will be
entered for respondent in
docket No. 7795-94.
9After the reply briefs in these cases had been filed, the
Court of Appeals for the Seventh Circuit decided Resser v.
Commissioner, 74 F.3d 1528 (7th Cir. 1996), revg. and remanding
T.C. Memo. 1994-241. By letter, counsel for Mrs. Kelly called
the decision to our attention in the belief that the facts were
in some respects similar to those of these cases. Since neither
this Court nor the Court of Appeals for the Seventh Circuit
decided whether the understatement in that case resulted from
grossly erroneous items, and the case has been remanded to this
Court for further findings on that issue, we leave for another
day any discussion of the opinion of the Court of Appeals for the
Seventh Circuit in Resser.
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