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that petitioner had “actual knowledge * * * of any item giving
rise to a deficiency (or portion thereof) which is not allocable
to [petitioner]”.2
The concept of actual knowledge under section 6015(c) has
been addressed by this Court in Charlton v. Commissioner, 114
T.C. 333, 341-342 (2000), where relief was granted, and Cheshire
v. Commisioner, 115 T.C. __, __ (2000) (slip op. at 17-23), where
relief was denied.
In Charlton v. Commissioner, supra, a recent application of
the innocent spouse rule, we explained that a section 6015(c)
election “is not valid if respondent shows that the individual
making the election had actual knowledge when signing the return
of any ‘item’ giving rise to a deficiency (or portion thereof)
which is not allocable to the electing individual.” Id. at 341.
In Charlton, the taxpayer seeking relief was aware that the
source of income was his wife’s business, but he did not compare
records provided him by his wife with other business records to
determine whether his wife had accounted for all of the income.
Although Mr. Charlton had actual knowledge of income from a
particular source and knew generally of his spouse’s source of
income, he had no knowledge that all income from that source had
2 Respondent, has agreed that petitioner is entitled to sec.
6015(c) relief with respect to three items other than the Primera
transaction. The only question we consider here is whether
petitioner had “actual knowledge” within the meaning of sec.
6015(c).
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