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zero taxable income. Given the nature of Mr. Skoller’s business,
such a large operating loss would be unusual. A reasonable
taxpayer in Ms. Skoller’s situation would further inquire into
the explanation behind the claimed loss. Ms. Skoller knew that
Mr. Skoller operated a professional business and that petitioners
held numerous partnership investments, but, as far as we can
tell, the two were not interrelated. With those sources of
income, a reasonably prudent taxpayer would be suspicious of
reporting no taxable income.
In a remarkably similar situation, where the nonrequesting
spouse was an accountant and prepared the joint return, we
observed that the antecedent of section 6015(b)(1) “is designed
to protect the innocent, not the intentionally ignorant. Thus,
even though petitioner had no business background and was married
to an accountant, we do not think that her ‘ostrich imitation’
was reasonable.” Cohen v. Commissioner, supra (fn. ref.
omitted.)
Consequently, we find that Ms. Skoller had reason to know of
the understatement of tax under section 6015(b)(1)(C) and is not
entitled to relief under section 6015(b)(1).
However, as already stated, respondent concedes that Ms.
Skoller is entitled to relief under section 6015(c). While Mr.
Skoller originally opposed that relief, he abandoned that
position by not filing a brief. In accordance with the positions
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