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attributable to an omission of income from the joint return, the
spouse’s knowledge or reason to know of the underlying
transaction which produced the income is sufficient to preclude
relief under section 6015(b)(1). Cheshire v. Commissioner, 115
T.C. 183, 192-193 (2000), affd. 282 F.3d 326 (5th Cir. 2002). In
Cheshire, the taxpayer knew about the entire amount of retirement
distributions even though she did not know the distributions were
taxable.
Petitioner and Mrs. Parker met with a financial adviser from
U.S. Bank regarding their pension accounts. Petitioner testified
that he “had always had that concern [that their pension assets
were not insured by the Federal Deposit Insurance Corporation
(FDIC)]”. Petitioner talked about this subject frequently. Mrs.
Parker testified that petitioner requested that the pension
distributions be made because the pension funds were “not
protected by the FDIC”. He persisted in pressing the point
until, as Mrs. Parker stated, he “bugged” her to make the pension
withdrawals even though there was no other reason to do so. Yet,
petitioner claims he did not know about the pension fund in
question, when Mrs. Parker’s pension funds were withdrawn at his
insistence. Petitioner’s knowledge of Mrs. Parker’s pension
distributions is bolstered by the fact that, like the pension
distribution made in the taxable year from petitioner’s own
pension fund, Mrs. Parker’s pension distributions were deposited
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