- 10 -
tax consequences resulting from the factual circumstances is not
required. Id. at 203-204. Respondent bears the burden of
proving that the taxpayer requesting section 6015(c) relief had
the relevant actual knowledge. Sec. 6015(c)(3)(C); King v.
Commissioner, supra at 204.5
With respect to the disallowed rental loss deductions,
petitioner is not entitled to relief from joint and several
liability under section 6015(c). As discussed above, petitioner
was fully aware of all the underlying factual circumstances
concerning the rental of the condominium unit to her own
daughter. See King v. Commissioner, supra. Consequently,
petitioner had actual knowledge of the factual basis for the
denial of the deductions, and she cannot rely on ignorance of the
law for relief from liability. Id.; Mitchell v. Commissioner,
supra; Cheshire II, supra; Cheshire I, supra at 194-195; Price v.
Commissioner, supra.6
5See also sec. 1.6015-3(c)(2)(i)(B)(2), Income Tax Regs.
(“If a deduction is fictitious or inflated, the IRS must
establish that the requesting spouse actually knew that the
expenditure was not incurred, or not incurred to that extent.”).
This regulation does not apply in the present case because it is
effective only with respect to requests for section 6015 relief
made on or after July 18, 2002. Sec. 1.6015-9, Income Tax Regs.
6The requirement that a taxpayer not have actual knowledge
of an item is eliminated where the taxpayer signs the return
under duress. Sec. 6015(c)(3)(C). In her trial memorandum,
petitioner hints that she was under duress when signing the
returns. For the reasons discussed more fully below, we find
that petitioner did not sign the returns under duress.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011