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Furthermore, the notice of deficiency asserts a delinquency
penalty for the tax years 1992, 1993, and 1994. The explanation
indicates that the 1992 return, due October 15, 1993, was not
filed until January 7, 1994; the 1993 return, due October 15,
1994, was not filed until October 19, 1995; and the 1994 return,
due October 15, 1995, was not filed until November 27, 1995.
Phillip was charged on March 30, 1995, with grand theft from the
operation of his Ponzi scheme. On April 28, 1995, having entered
a guilty plea to the charges, the State court sentenced Phillip
to 2 years in prison and ordered him to pay $468,834 in
restitution. Absent more than Cyndie's mere assertion of
eligibility for relief under section 6015, it seems highly
unlikely that Cyndie did not know about Phillip's Ponzi scheme
when she signed the returns for the tax years 1993 and 1994 after
Phillip was sentenced by the State court.
Given the information available to respondent, including the
fact that Phillip deposited funds received from his criminal
activity into petitioners' joint checking accounts throughout the
years in issue, and the joint returns for 1993 and 1994 were
filed after Phillip was convicted on the State theft charges, we
find respondent's position reasonable and substantially
justified. It is inappropriate to award petitioners litigation
costs attributable to Cyndie's section 6015 claim for relief
under these circumstances. See Krafsky v. Commissioner, T.C.
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