Kathleen Patricia Peters - Page 14




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          prevail, the taxpayer must demonstrate that in not granting                 
          relief, the Commissioner exercised his discretion arbitrarily,              
          capriciously, or without sound basis in fact or law.  Woodral v.            
          Commissioner, 112 T.C. 19, 23 (1999); Mailman v. Commissioner, 91           
          T.C. 1079, 1082-1084 (1988).                                                
               Because petitioner is entitled to section 6015(c) relief               
          with respect to the charitable contribution deductions, she is              
          not eligible for equitable relief with respect to the resulting             
          deficiencies.  Sec. 6015(f)(2).  We therefore only address                  
          equitable relief with respect to the rental loss deductions.                
               As directed by section 6015(f), respondent has prescribed              
          procedures in Revenue Procedure 2000-15, 2000-1 C.B. 447, that              
          the Commissioner will consider in determining whether an                    
          individual qualifies for relief under that section.  Section 4.03           
          of the revenue procedure lists several nonexclusive factors to be           
          considered in determining eligibility for relief.  In denying               
          equitable relief, respondent most heavily relied upon two of                
          these factors--petitioner’s knowledge of the facts underlying the           
          rental of the condominium unit to her daughter, and petitioner’s            
          receipt of a significant benefit from the understatement of tax.            
               As discussed above, petitioner had full knowledge of the               
          underlying facts concerning the rental of the condominium unit.             
          Furthermore, she made no effort to review the tax returns or                
          otherwise verify their accuracy prior to signing them.  She                 






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