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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.
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