- 16 -
116 T.C. 189, 194-195 (2001); Cheshire v. Commissioner, 115 T.C.
183, 193-194 (2000), affd. 282 F.3d 326 (5th Cir. 2002).
Respondent argues that petitioner had actual knowledge of
the unreported 10-percent additional tax under section 72(t)
since he received the check for the distribution, personally used
the proceeds to pay off debts for which he and Ms. Glenn were
jointly responsible, and signed the joint Federal income tax
return without making any inquiry as to whether the tax reported
was correct.
In the present case, as in the case of a disallowed
deduction, we find that actual knowledge is present if the
taxpayer had actual knowledge of the factual circumstances which
led to the 10-percent additional tax. See King v. Commissioner,
116 T.C. 198, 204 (2001). Knowledge of the tax consequences
resulting from the factual circumstances is not required. Id. at
203-204. The Commissioner bears the burden of proving that the
taxpayer requesting section 6015(c) relief had the relevant
actual knowledge. Sec. 6015(c)(3)(C); King v. Commissioner,
supra at 204.
Petitioner is not entitled to relief from joint and several
liability under section 6015(c). As discussed above, petitioner
was fully aware of all the underlying factual circumstances
concerning the distribution from his own section 401(k) plan.
See King v. Commissioner, supra. Consequently, petitioner had
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