Linda K. Haltom - Page 19

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         already found that she had no reason to know of either the                   
         embezzlement or its omission from their return.                              
              The Commissioner asks us to consider a few other factors,               
         including the Haltoms’ still being married and whether Linda                 
         would be subject to economic hardship if she were to remain                  
         liable.  See Alt, 119 T.C. at 314-315; sec. 301.6343-1(b)(4),                
         Proced. & Admin. Regs.  While the endurance of the marriage is               
         relevant, we do not think it outweighs her not having a reason to            
         know of the understatement or her not receiving any significant              
         benefit from her husband’s embezzlement.                                     
              As for economic hardship, the Haltoms’ combined AGI was                 
         $109,000 in 2002.  Linda currently earns around $25,000 per year,            
         with Jerry earning the remainder.  At trial, however, Jerry                  
         credibly testified that his commission rate was scheduled to                 
         decrease from three percent to one percent in November 2004.                 
         Since most of Jerry’s income is commission-based, this will have             
         a major effect on the Haltoms’ total income.  As such, we find               
         Linda would be subject to economic hardship should she be liable,            
         which supports our overall conclusion that holding her liable                
         would be inequitable.                                                        
              This leaves only the income from Dela's Demos.  Any                     
         understatement caused by the failure to report that comparatively            
         tiny income is obviously attributable to Linda, not Jerry; thus,             
         she cannot be relieved under section 6015(b) from the tax                    

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