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liability, respondent pointed out that the earlier determination
erroneously computed petitioner’s liability under the community
property rules. Section 6015(a) provides that a determination
under this section is to be made without regard to community
property rules.
Petitioner is divorced.
On the 1994 return, $65,580 is income from Schedule E,
Supplemental Income and Loss, from intervenor’s S corporation,
Construction Planning & Management, Inc. The rest of the income
is from petitioner’s wages as a fitness instructor of $4,434, an
annuity distribution to her of $1,076, and unemployment
compensation to her of $3,510. Petitioner also had a loss of
$2,610 as reported on her Schedule C, Profit or Loss From
Business. Petitioner had withholding of $688 and intervenor made
estimated payments of $883. Respondent concluded that the
underpayment of tax was due to intervenor’s failure to make
estimated payments on his income.
Intervenor strictly controlled the family finances and had
total control over the moneys. He also prepared all the tax
returns and presented a completed return to petitioner and told
her to “sign this.” Petitioner stated that she had no reason to
believe that intervenor was not paying taxes on moneys he earned.
She also stated that she did not have any knowledge or belief
that the taxes had not been paid. Respondent gave petitioner the
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Last modified: May 25, 2011