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opportunity to challenge her tax liability before her
administrative hearing, we review petitioner’s underlying tax
liability de novo.
In a trial de novo, our findings and conclusions concerning
a taxpayer’s liability must be based on the merits of a case
without deference to the determination reached at the
administrative level. See Ewing v. Commissioner, 122 T.C. 32,
37-38 (2004); Jones v. Commissioner, 97 T.C. 7, 18 (1991).
Although petitioner resided in a community property State and
filed her return as “married filing separate”, respondent did not
determine or assess a tax based upon petitioner’s share of
community income and, consequently, there was no consideration of
the issue in the notice of determination. Since our task in a
trial de novo is to arrive at a conclusion of the correct amount
of a taxpayer’s underlying tax liability, we apply Federal income
tax principles as they relate to the taxpayer’s share of
community income.
II. De Novo Review of Petitioner’s Underlying Tax Liability
A. Community Property--General Rules
Generally, a spouse residing in a community property State
has a vested interest in and is owner of one-half of both
spouses’ community property. United States v. Mitchell, 403 U.S.
190, 196 (1971). California law defines community property as
all property, real or personal, wherever situated, acquired by a
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