Beverly Gordon - Page 5

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               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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