- 8 -
However, we cannot say that petitioner had no reason to know
that the liabilities listed on the returns would not be paid. On
the 1987 return, the liability was over $40,000, and only $475
had been withheld. For the other 3 years at issue, the returns
petitioner signed showed lesser but still significant amounts due
of $12,789, $20,133, and $5,958, and withholding, at the most, of
$1,969. We believe that it was reasonable for respondent to
conclude that petitioner had reason to know that Mr. Sjodin would
not pay these amounts. See Morello v. Commissioner, T.C. Memo.
2004-181.
Respondent argues that petitioner received significant
benefit, beyond normal support, from the unpaid liabilities.
Petitioner testified that in 1987, two of her children were in
high school, and two were in college. The funds available for
household expenses were augmented over the years in issue because
the tax was not paid. There is no evidence that petitioner or
her family lived an extravagant lifestyle or that Mr. Sjodin
spent the extra money in any way other than in providing for his
family. The money was likely used for normal household expenses
and college tuition. This does not qualify as significant
benefit to petitioner.
The primary factor weighing in favor of granting petitioner
relief is economic hardship. In contrast, petitioner’s reason to
know of the unpaid liabilities is “an extremely strong factor
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011