- 28 -
the years in issue). Petitioner did not satisfy her duty to
inquire. Id. at 965-966; see also Mora v. Commissioner, supra at
289 (involving a Hoyt investment).
A reasonable person, faced with petitioner’s circumstances
and in petitioner’s position, would have had reason to know of
the understatement. We conclude that, under both the U.S. Court
of Appeals for the Sixth Circuit’s standard and the
Price approach, petitioner had reason to know of the
understatements.
4. Section 6015(b)(1)(D): Inequitable To Hold Liable
The requirement in section 6015(b)(1)(D), that it be
inequitable to hold the requesting spouse liable for an
understatement on a joint return, is virtually identical to the
same requirement of former section 6013(e)(1)(D); therefore,
cases interpreting former section 6013(e) remain instructive to
our analysis. Butler v. Commissioner, 114 T.C. at 283.
Whether it is inequitable to hold a spouse liable for a
deficiency is determined “taking into account all the facts and
circumstances”. Sec. 6015(b)(1)(D). The most often cited
material factors to be considered are (1) whether there has been
a significant benefit to the spouse claiming relief, and (2)
whether the failure to report the correct tax liability on the
joint return results from concealment, overreaching, or any other
wrongdoing on the part of the other spouse. Alt v. Commissioner,
119 T.C. at 314; Jonson v. Commissioner, 118 T.C. at 119.
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011