- 15 - then the other individual shall be relieved of liability for tax (including interest, penalties, and other amounts) for such taxable year to the extent such liability is attributable to such understatement. The requirements of section 6015(b)(1) are stated in the conjunctive. Accordingly, a failure to meet any one of them prevents a requesting spouse from qualifying for the relief offered therein. Alt v. Commissioner, 119 T.C. 306, 313 (2002). Respondent argues, and we agree, that petitioner has failed to satisfy the requirements of subparagraphs (C) and (D) of section 6015(b)(1). Petitioner was well aware of the business activities of Trupin and was a participant in the expenditure of funds far exceeding any amounts ever reported on a joint tax return with Trupin. Petitioner also knew that she had significant earnings during the years in issue and that no income tax was withheld from her earnings. Petitioner’s response is that, although she does not recall specifically what occurred, she may have been shown only the signature page of the tax returns, and told to sign, and the returns were too complicated for her to understand. Taxpayers seeking to prove that they had no knowledge or reason to know of an item giving rise to an understatement of tax must demonstrate, at a minimum, that they have fulfilled a “duty of inquiry” with respect to determining whether their correct tax liability was reported on the return for the year for which theyPage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011