- 11 -
Commissioner, supra at 443; Price v. Commissioner, supra at 961-
962. Petitioner has the burden of proving each element of
section 6013(e) by a preponderance of the evidence. Rule 142(a);
Price v. Commissioner, supra at 962; Bokum v. Commissioner, 94
T.C. 126, 138 (1990), affd. 992 F.2d 1132 (11th Cir. 1993).
Since the elements are conjunctive, the failure to prove any one
of the elements will preclude petitioner from relief. Stevens v.
Commissioner, 872 F.2d 1499, 1504 (11th Cir. 1989), affg. T.C.
Memo. 1988-63.
Respondent and petitioner stipulated that joint returns were
filed for the years in issue and that the returns contain
substantial understatements of tax attributable to grossly
erroneous items of Mr. Aude. Therefore, the controversy, arising
from the erroneous deduction of the Magnum loss, focuses on the
third and fourth requirements: (1) Whether the petitioner, in
signing the return, knew or had reason to know of the substantial
understatement and (2) whether it would be inequitable to hold
petitioner liable for the deficiency.
Section 6013(e)(1)(C) Knowledge or Reason To Know
Section 6013(e)(1)(C) requires that the petitioner establish
"that in signing the return he or she did not know, and had no
reason to know, that there was such substantial understatement".
which the Internal Revenue Code of 1954 applies. Therefore, sec.
6013(e), as so amended, governs the tax years at issue in the
instant proceeding.
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