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joint returns for those years, she did not know or have reason to
know of the embezzled funds or of the understatements for 1981 or
1982, she did not significantly benefit from the embezzled funds
omitted from income in 1981 and 1982, and it would have been
inequitable to hold her liable for the 1981 and 1982
deficiencies. Petitioner’s standard of living was the same in
1983 as it was in 1981 and 1982, and she has never received any
significant benefit from the embezzlement. However, we held in
Ferrarese I that she was not entitled to relief from joint
liability for 1983 because she knew or had reason to know of the
understatement for 1983 before her husband (with her permission)
signed her name to their 1983 return.
C. Petitioner’s Request for Relief From Joint Liability for Tax
Under Section 6015
On February 19, 2000, petitioner filed Form 8857, Request
for Innocent Spouse Relief (And Separation of Liability and
Equitable Relief), in which she sought relief from joint and
several liability for 1983. Respondent denied petitioner’s
request by determination letter dated October 10, 2000.
Respondent’s only stated reason for denying relief to petitioner
was:
Your request for Relief from Joint and Several
Liability has been disallowed because information
contained in your case indicates that you had knowledge
and reason to know of the items that gave rise to the
tax deficiency. Therefore, your claim is being denied
under Internal Revenue Code Section 6013(e), 6015(b),
6015(c) and 6015(f).
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