- 12 - differences between the former provision and the new one, cases interpreting old section 6013(e) remain instructive as to our analysis of whether a taxpayer "knew or had reason to know" of an understatement pursuant to new section 6015(b). Of the several elements necessary for innocent spouse relief listed in new section 6015(b)(1), the parties in the instant case have presented only the issue of whether petitioner had reason to know of the understatement on petitioners' 1992 tax return. Cases arising pursuant to former section 6013(e) provide that the spouse seeking relief has reason to know of an understatement if a reasonably prudent taxpayer in his or her position, at the time he or she signed the return, could be expected to know that the return contained an understatement or that further investigation was warranted. See Kistner v. Commissioner, 18 F.3d 1521, 1524 (11th Cir. 1994),5 revg. and remanding T.C. Memo. 1991-463; Stevens v. Commissioner, 872 F.2d 1499, 1505 (11th Cir. 1989), affg. T.C. Memo. 1988-63. The spouse seeking relief has a "duty of inquiry". Stevens v. Commissioner, supra at 1505. In deciding whether a spouse "has reason to know" of an understatement, we undertake a subjective inquiry, and we recognize several factors that are relevant to our analysis, including: (1) The alleged innocent spouse's level of education; 5 The instant case, absent stipulation to the contrary, is appealable to the Court of Appeals for the Eleventh Circuit.Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011