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prepare or file the joint returns. On the contrary, petitioner
had access to the couple’s records and directed the preparation
of the joint returns prior to her signing them. Because Mr.
George was deceased at the time petitioner signed the returns in
2000, petitioner at that time could not have relied on her spouse
to pay the liability. Furthermore, as the personal
representative of Mr. George’s estate, petitioner had reason to
know that the liability had not been paid by the estate of Mr.
George.
After petitioner already had learned that Mr. George’s
statements to her with regard to his filing the returns were
false, petitioner could not have reasonably relied on statements
made by Mr. George that he had paid the tax liabilities.
Petitioner had significant education and access to the couple’s
financial records. Additionally, petitioner could have but
apparently did not inquire with respondent as to whether Mr.
George had in fact made estimated tax payments.
Based on the foregoing, we believe that petitioner knew or
had reason to know that the liability would not be paid.
The third element is satisfied if the requesting spouse will
suffer economic hardship if relief is not granted. The Secretary
is directed to base the determination of whether a requesting
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