- 14 -
of section 701 of Pub.L. 104-168, 110 Stat. 1452, 1463 (1996),
Taxpayer Bill of Rights 2.)
Respondent contends: the Commissioner’s position was
substantially justified. In particular, respondent contends:
(1) It was reasonable to take the position that petitioners “did
not have a valid matrimonial agreement under Louisiana law”; (2)
it was reasonable “to take whipsaw or inconsistent positions to
protect the revenue”; and (3) it was reasonable to charge Sandra
(as well as Michael) with civil tax fraud.
Sandra contends that “Respondent had no reasonable basis in
fact or law to conclude [(1)] that the Marital Agreement did not
exist, was invalid, or was not timely filed in St. Tammany
Parish”; (2) that Louisiana law required a second filing; (3)
that a 1991 Jefferson Parish filing would not satisfy any second
filing requirement that there might be under Louisiana law; and
(4) “that any fraud penalty existed on Petitioner’s [Sandra’s]
tax return for either year in question.”
The justification for each of respondent’s positions must be
separately determined. Foothill Ranch Co. Partnership v.
Commissioner, 110 T.C. 94, 97 (1998).
We agree with respondent as to income-splitting. We agree
with Sandra as to civil fraud penalties, to the extent they
exceeded negligence penalties.
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011