- 13 - The parties have stipulated that joint returns were filed for the years in issue. Respondent contends, however, that petitioner does not meet the remaining section 6013 requirements. Thus, the controversy herein focuses on three issues: (1) Whether the substantial understatements are attributable to grossly erroneous items of petitioner's then-husband, Emmens; (2) whether petitioner did not know, and had no reason to know, of the substantial understatements when she signed the return in each of the years in issue; and (3) whether it would be inequitable to hold petitioner liable for the income tax deficiencies attributable to such substantial understatements. Based on the entire record, we find that the omissions from income are not grossly erroneous items attributable to Emmens alone, that petitioner knew or had reason to know of the understatements when she signed the returns, and that it is not inequitable to hold her liable for tax. Grossly Erroneous Items Petitioner must establish that there was a substantial understatement of tax attributable to grossly erroneous items of her then-husband, Emmens. Sec. 6013(e)(1)(B). "Understatement" is defined as the amount of tax required to be shown on the return less the amount of tax shown on the return, reduced by any rebate. Sec. 6661(b)(2)(A). A substantial understatement is any understatement that exceeds $500. Sec. 6013(e)(3). Any itemPage: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011