Craig A. Penfield - Page 10




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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 Parker’s pension funds were withdrawn at his            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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