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respondent in denying equitable relief to petitioner (that
petitioner “had knowledge of the unreported income”) is described
in Rev. Proc. 2000-15, sec. 4.03(2)(b), 2000-1 C.B. at 449, in
pertinent part, as follows:
(b) Knowledge or reason to know. A requesting spouse
knew or had reason to know of the item giving rise to a
deficiency * * * at the time the return was signed.
Respondent argues that “petitioner had knowledge or reason
to know” of the IRA distribution when she filed the amended 1996
return on November 22, 1998. But that is not the return that
failed to reflect “the item” (in this case, the IRA distribution)
with respect to which petitioner seeks equitable relief under
section 6015(f). Rather, the return omitting the IRA
distribution (and which may be said to have reflected an
understatement in tax) is the original 1996 return, and
petitioner’s undisputed testimony, also reflected in a July 25,
1999, letter from her to the Internal Revenue Service requesting
innocent spouse relief, is that she did not learn of that
distribution until it was discovered by her husband’s accountant
in connection with his preparation of the 1997 joint return in
April 1998. That was some 14 months after the original 1996
return was filed. It is unpersuasive to argue, as does
respondent, that petitioner’s voluntary filing of an amended 1996
return and her attendant payment of the delinquent taxes
attributable to the omission of income from the original 1996
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