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Petitioner suspected that David was not telling her the truth,
but she would not contradict him or press him further on the
matter. David had in the past frequently evaded giving answers
to questions about his business and finances, and when Margaret
or others "probed", he would often "fly into a rage" and
occasionally throw things.
OPINION
The United States Court of Appeals for the Ninth Circuit
remanded this case to allow the Tax Court to apportion relief
under the "innocent spouse" provisions of section 6013(e).
Wiksell v. Commissioner, 90 F.3d 1459, 1464 (9th Cir. 1996). The
Court of Appeals noted that one of the showings that a spouse
seeking innocent spouse relief must make is that in signing the
return the spouse did not know, and had no reason to know, of the
substantial understatement. Id. at 1461. The Court of Appeals
agreed that petitioner had reason to know of the substantial
understatement, but observed that it was not clear that she
should have known of the magnitude of the understatement. The
Court of Appeals stated that "Application of the statute * * *
potentially generates inequitable results", Id. at 1463, and
remanded the case so that we could reevaluate our previous
decision "with the knowledge that apportionment is both available
and proper in this case." Id. at 1464. (Emphasis added).
We have reevaluated our prior decision, as directed, and
have also evaluated the record generated by the further hearing.
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Last modified: May 25, 2011