Robert L. Beck - Page 19

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               Respondent does not dispute that Mrs. Beck meets the                   
          requirements of section 66(c)(1) and (2).  Respondent contends,             
          however, that she fails to meet the requirements of section                 
          66(c)(3) and (4).  For the reasons discussed below, we agree with           
               Mrs. Beck has failed to establish that she did not know of             
          the subject items of community income, within the meaning of                
          section 66(c)(3).  Whether a taxpayer has knowledge of an item of           
          community income is determined by reference to knowledge of a               
          particular income-producing activity, rather than of the exact              
          amount of community income.  See McGee v. Commissioner, 979 F.2d            
          66, 70 (5th Cir. 1992) (and cases cited therein), affg. T.C.                
          Memo. 1991-510; Roberts v. Commissioner, 860 F.2d 1235, 1239-1240           
          (5th Cir. 1988), affg. T.C. Memo. 1987-391.  Here, Mrs. Beck                
          clearly was aware that Dr. Beck’s dental practice was an income-            
          producing activity.  Mrs. Beck occasionally worked in Dr. Beck’s            
          office, often called the office to determine how much money Dr.             
          Beck earned on a given day, and during the last 2 years in issue            
          made substantial deposits of income from the dental practice into           
          her separate bank account and into petitioners’ joint bank                  
          account.  After Dr. Beck’s dental license was revoked, she was              
          actively involved in seeking to have the board dissolved, thus              
          demonstrating engagement in his business affairs.                           

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