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and she represented that she made the estimated tax payments.
Petitioner further argues that “equity demands that the tax
deficiency not be attributable to a spouse who does not know or
have reason to know that the other spouse misused funds intended
to pay a reported tax”. Respondent argues, and we agree, that
the liability is allocable to petitioner because he earned the
income reported on the returns for both 1996 and 1997. Cf. Wiest
v. Commissioner, T.C. Memo. 2003-91. Petitioner’s remaining
arguments regarding attribution focus on his purported lack of
knowledge of the unpaid liability.
Knowledge of Unpaid Liability
Under Rev. Proc. 2000-15, sec. 4.02, 2000-1 C.B. at 448, the
relevant knowledge in the case of a reported but unpaid liability
is whether the taxpayer knew or had reason to know “that the tax
would not be paid” when the return was signed or filed. Further,
a taxpayer has a “duty of inquiry” to determine the amount of his
or her tax liabilities. See Price v. Commissioner, 887 F.2d 959,
965 (9th Cir. 1989), revg. an Oral Opinion of this Court; Butler
v. Commissioner, 114 T.C. 276, 284 (2000).
Petitioner testified that Ms. Trevino told him that the 1996
return was prepared by an accountant. Yet, there are several
obvious errors on the face of the return that should have been
discovered, even after a cursory review. It appears that the
1996 return was an altered copy of a 1995 return. On its face,
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