- 9 - point, the Court stated: In our opinion, the knowledge requirement of section 6015(c)(3)(C) does not require the electing spouse to possess knowledge of the tax consequences arising from the item giving rise to the deficiency or that the item reported on the return is incorrect. Rather, the statute mandates only a showing that the electing spouse actually knew of the item on the return that gave rise to the deficiency (or portion thereof). * * * [Id. at 194.] See also Martin v. Commissioner, supra, where this Court stated: “Thus, in Cheshire v. Commissioner, supra, we concluded that ignorance of the applicable tax law is no excuse and that respondent had met his burden of proving knowledge of the omitted income.”4 The Cheshire case involved taxable retirement income distributions received by the taxpayer’s spouse that were not reported on the taxpayers’ joint income tax return. The Court held that the “knowledge standard” for purposes of section 6015(c)(3)(C) “is an actual and clear awareness (as opposed to reason to know) of the existence of an item which gives rise to the deficiency (or portion thereof).” Cheshire v. Commissioner, supra at 195. The Court further stated: “In the case of omitted income (such as the situation involved herein), the electing spouse must have an actual and clear awareness of the omitted 4The quoted statement relates to sec. 6015(c)(3)(C), where the Commissioner has the burden of proof with respect to knowledge of the item giving rise to the deficiency.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
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