-12-
for 1994, and section 6015(b)(1)(E) because he elected to seek
relief not later than 2 years after collection activities began.
Section 6015(b)(1)(C) requires that in signing the return
the individual seeking relief did not know and had no reason to
know of the understatement. Charlton contends that he did not
know and had no reason to know of the understatement attributable
to Medi-Task because he had no control over Medi-Task’s finances
and was busy with his other business interests. We disagree.
Under prior law (former section 6013(e)(1)(C)), in a case of
omitted income, a spouse seeking relief was not permitted to turn
a blind eye to facts that were available to him or her to avoid
liability as an innocent spouse. See McCoy v. Commissioner, 57
T.C. 732, 734 (1972). Similarly, a taxpayer who prepares a
return is not relieved of the duty to prepare an accurate return
if the taxpayer relies on summarized information provided by the
taxpayer’s spouse when information upon which the summary is
based is available to the taxpayer.
Charlton was generally familiar with Medi-Task. Hawthorne
gave him the bank statements respondent later used in determining
Medi-Task’s income for 1994, Forms 1099 and W-2, and a computer-
generated expense list. Charlton had unfettered access to Medi-
Task’s financial records. We conclude that Charlton had reason
to know of Medi-Task’s understatement of income. Thus, Charlton
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