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Petitioner and her husband testified that petitioner was
aware of the investment in the Hoyt partnerships, she had access
to all of the files/information regarding the Hoyt investment,
and that Christopher made no effort to deceive petitioner
regarding the family’s financial affairs. This further supports
a finding that petitioner had reason to know of the
understatement. Jonson v. Commissioner, supra at 118.
Petitioner claims that Mr. Hoyt’s deceit is relevant to the
determination of “reason to know”. Although Mr. Hoyt’s deceit
may be relevant, it does not lead to the result petitioner seeks.
The purpose of section 6015 relief is to protect one spouse
from the overreaching or dishonesty of the other. Purcell v.
Commissioner, 826 F.2d at 475. Relief is inappropriate where it
would allow the requesting spouse to escape liability for
apparently legitimate claims that are later disallowed. See
Bartlett v. Commissioner, T.C. Memo. 1997-413.
As was the case in Mora v. Commissioner, 117 T.C. 279, 288
(2001), where we denied relief under section 6015(b) in a case
involving Hoyt investments, neither petitioner nor Christopher
knew the facts that made the flowthrough losses from the Hoyt
partnerships unallowable as deductions on their joint returns and
both petitioner and Christopher put their trust in the Hoyt
organization to determine the basis for, propriety of, and amount
of their deductions.
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