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B. Application of the Factors to Petitioner
1. Respondent’s Notice of Determination
Respondent based his denial of equitable relief on a finding
that petitioner “failed to show” that she (1) lacked knowledge of
the IRA distribution and (2) did not benefit from that
distribution. We interpret that finding as a finding that
petitioner did have knowledge of the IRA distribution and did
significantly benefit from that distribution. Knowledge or
reason to know of “the item giving rise to a deficiency” and the
existence of a significant benefit “(beyond normal support) from
the unpaid tax liability or items giving rise to the deficiency”
are both negative factors weighing against relief pursuant to
Rev. Proc. 2000-15, section 4.03(2)(b) and (c). In his notice of
determination respondent characterized the presence of those
negative factors as a failure on petitioner’s part “to meet the
centralized factors for relief.”
Petitioner’s burden is to demonstrate that respondent’s
denial of equitable relief under section 6015(f) was an abuse of
discretion; i.e., that respondent acted arbitrarily,
capriciously, or without sound basis in fact. Ewing v.
Commissioner, 122 T.C. at 36-37; Jonson v. Commissioner, 118 T.C.
106, 125 (2002), affd. 353 F.3d 1181 (10th Cir. 2003).
2. Petitioner Did Not Have Knowledge or Reason To Know
of the Unreported Income
The first of the two negative factors relied upon by
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