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understatement of tax or that further investigation was
warranted. Petitioner has satisfied the section 6015(b)(1)(C)
requirement.
The final question is whether, taking into account all the
facts and circumstances, it would be inequitable to hold
petitioner liable for the deficiency attributable to the
understatement on the joint 1983 tax return. Sec. 6015(b)(1)(D).
Respondent argues that it would not be inequitable for
petitioner to be held liable for the understatement on the joint
1983 tax return because title to the remaining condominiums was
transferred in 1997 to her name alone. The Hendrickses acquired
the condominiums before Mr. Hendricks invested in Boulder Oil and
Gas. The condominiums were acquired by exchanging other property
the Hendrickses had previously owned and were not acquired from
proceeds made available through the investment in Boulder Oil and
Gas. Mr. Hendricks transferred his joint interest in the
remaining condominiums to petitioner nearly 3 years before
respondent assessed the deficiency for 1983 and began collection
action against the Hendrickses for that tax year. The
Hendrickses had paid the balances due for 1980-82 with moneys,
derived in part, from the sale of several of the condominiums,
and the Hendrickses mistakenly believed that they had settled the
1983 tax year and did not owe any more tax liabilities.
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