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determination letter denied relief under section 6015(f).4 We
consider whether respondent’s determination was an abuse of
discretion.
A. Knowledge or Reason To Know
The determination letter found that petitioner had knowledge
or reason to know of the underpayment, based solely on the fact
that he signed the 1994 return.5 While there is no longer any
dispute that petitioner signed the return, as he conceded the
signature was his upon seeing the return again in connection with
these proceedings, the fact that he signed the return does not
establish the actual or constructive knowledge that is relevant
in the case of a liability that is reported on a return but not
paid.6 The relevant knowledge in the case of a reported but
unpaid liability, as respondent’s own published guidance points
out, is whether the taxpayer knew or had reason to know “that the
4 The determination letter in addition considered certain
factors supportive of relief (namely, petitioner’s divorced
status and the fact that there was no known significant benefit
from the underpayment beyond normal support), as well as factors
weighing against relief (namely, the absence of hardship or
marital abuse). The determination letter also identified a
neutral factor; namely, the failure of the couple’s divorce
decree to address tax debts.
5 The determination letter states: “His signature on the
return appears good. Therefore, he knew of the underpayment at
one time.” (Emphasis added.)
6 If signing a joint return that reports a liability is
sufficient to establish actual or constructive knowledge of an
underpayment, then no taxpayer signing such a joint return would
ever lack knowledge or reason to know of the underpayment.
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Last modified: May 25, 2011