- 5 -
We next addressed in our Opinion Mr. Gordon's contention
that respondent is equitably estopped from claiming that peti-
tioners are not entitled to the claimed 1988 NOL deduction
(equitable estoppel issue). We rejected Mr. Gordon's contention
because we found on the record presented to us that Mr. Gordon
failed to show that the doctrine of equitable estoppel should be
applied against respondent.
The final matter we addressed in our Opinion was Ms.
Gordon's contention that she qualifies for innocent spouse relief
under section 6013(e)(1) with respect to the portion of petition-
ers' understatement of tax for 1988 that is attributable to the
claimed 1988 NOL deduction (innocent spouse issue). In rejecting
her contention, we stated:
Ms. Gordon does not even claim that Mr. Gordon did not
hold the options in question for the purposes specified
in section 1256(f)(3)(B), let alone that there was no
substantial argument that can be made that he so held
any of those options. Ms. Gordon could have developed
the record in order to attempt to establish that Mr.
Gordon did not hold the options that generated his 1986
net trading loss for the purposes specified in section
1256(f)(3)(B). However, she failed to do so. [Gordon
v. Commissioner, T.C. Memo. 1997-193.]
We found on the record presented to us that Ms. Gordon failed to
show (1) that there is no basis in fact or in law within the
meaning of section 6013(e)(2)(B) for the claimed 1988 NOL deduc-
tion and (2) that that item constitutes a grossly erroneous item
within the meaning of that section. We held that therefore Ms.
Gordon is not entitled to innocent spouse relief under section
6013(e)(1).
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