Marianne Hopkins - Page 24

                                       - 24 -                                         
                    b.  Actual Knowledge Exception Does Not Apply to                  
               As previously indicated, if the Commissioner demonstrates              
          that an individual making the election under section 6015(c) had            
          “actual knowledge”, at the time such individual signed the                  
          return, of any item giving rise to a deficiency (or portion                 
          thereof) which is not allocable to such individual under section            
          6015(d), the election under section 6015(c) will not apply to               
          such deficiency (or portion).  Sec. 6015(c)(3)(C).  The                     
          Commissioner must prove actual knowledge by a preponderance of              
          the evidence.  Culver v. Commissioner, 116 T.C. 189, 196 (2001).            
          Actual knowledge in the case of disallowed deductions consists of           
          “actual knowledge of the factual circumstances which made the               
          item unallowable as a deduction.”  King v. Commissioner, 116 T.C.           
          198, 204 (2001).  Actual knowledge of the tax laws or legal                 
          consequences of the operative facts are not required.  Id.;                 
          Cheshire v. Commissioner, 115 T.C. 183, 196-197 (2000), affd. 282           
          F.3d 326 (5th Cir. 2002).                                                   
               Respondent concedes that he has not proven actual knowledge            
          with respect to the Far West Drilling adjustments that are                  
          allocable to Mr. Hopkins.  Respondent makes no argument on brief            
          with respect to petitioner’s actual knowledge of the NOL                    
          carryforward deductions for 1982 and 1984 attributable to the               

Page:  Previous  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  Next

Last modified: May 25, 2011