David C. Jonson and Estate of Barbara J. Jonson, Deceased - Page 32

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          the relief-seeking spouse (1) had knowledge or reason to know of            
          the items giving rise to the deficiency, (2) has significantly              
          benefited (beyond normal support) from those items, and (3) will            
          not experience economic hardship if relief from the liability is            
          not granted.  Barbara was aware of the Vulcan investment, of the            
          resulting reported losses, and of the risk of an IRS challenge to           
          the tax reductions claimed to result from those reported losses.            
          Clearly, then, she had reason to know of the items giving rise to           
          the deficiencies.  She benefited from the items in that the                 
          losses, among other things, reduced the Jonsons’ taxes and                  
          contributed to their ability to pay for their children’s college            
          educations, which Barbara admitted was important to her.  Because           
          Barbara is deceased, there can be no economic hardship to her               
          personally if equitable relief is denied.  We cannot conclude               
          that respondent acted arbitrarily, capriciously, or without sound           
          basis in fact in denying Barbara equitable relief.                          
                    3.  Conclusion                                                    
               Under the facts and circumstances of this case, we hold that           
          respondent did not abuse his discretion in denying equitable                
          relief to Barbara under section 6015(f).                                    

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