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2. Held, further, knowledge of the “item giving
rise to a deficiency” for purposes of sec. 6015(c)(3)(C),
I.R.C., does not mean knowledge of the tax consequences
of the item or that the entry on the return is incorrect.
3. Held, further, after taking into account all
the facts and circumstances presented in this case, R’s
denial of equitable relief to P under sec. 6015(f),
I.R.C., as it relates to the sec. 6662(a), I.R.C.,
penalty applicable to the omitted retirement distribution
proceeds, constitutes an abuse of his discretion.
John Edward Leeper, for petitioner.
Sheila R. Pattison and Gerald L. Brantley, for respondent.
JACOBS, Judge: Respondent determined a $66,069 deficiency in
Kathryn and David Cheshire’s 1992 Federal income tax, a $16,518
section 6651(a)(1) addition to tax, and a $13,214 section 6662(a)
accuracy-related penalty. Only Kathryn Cheshire has contested this
determination; she does so claiming innocent spouse relief under
section 6015(b), (c), and/or (f).
After concessions by respondent, see infra, the issue to be
resolved is whether Mrs. Cheshire is entitled to innocent spouse
relief with respect to: (1) The taxation of an omitted portion of
the distributions Mr. Cheshire received upon his retirement from
Southwestern Bell Telephone Co., and omitted interest income from
a joint bank account, and (2) the section 6662(a) accuracy-related
penalty.
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