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T.C. Memo. 2002-249.
5. Conclusion
We find that, of the factors listed in Rev. Proc. 2000-15,
section 4.03, four are favorable, three are neutral, and only one
is unfavorable. Thus, a reasonable balancing of those factors
strongly suggests that petitioner is entitled to equitable relief
under section 6015(f), and that respondent’s contrary conclusion
constitutes an abuse of discretion. The following factors
provide additional support for that conclusion:
(a) Respondent’s denial of relief, as recited in the notice
of determination, was based upon his application of two of the
eight separate and distinct factors listed in Rev. Proc. 2000-15,
section 4.03. Therefore, it is not apparent whether respondent
complied with that section’s requirement that “all factors * * *
be considered and weighed appropriately.”
(b) Respondent erroneously concluded that the two factors he
did expressly consider (knowledge or reason to know and
significant benefit) were unfavorable when, in fact, both were
favorable.
(c) Respondent failed to take into account the fact that the
understatement of income on the original 1996 return resulted
from Louis’s concealment of that income. Both this Court and the
Court of Appeals for the Second Circuit (the court to which an
appeal of this case most likely would lie) have treated as a
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