Kathleen Patricia Peters - Page 11




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          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.                      





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