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considerable economic hardship if relief from the liabilities
were not granted, given the Hendrickses’ current level of income
and assets. See Ewing v. Commissioner, 122 T.C. 32, 47 (2004).
We also consider the fact that the Hendrickses have made a
good faith effort to comply with Federal income tax laws in the
tax years following 1983. Except for the years they reported
loss activity from Boulder Oil and Gas, i.e., 1980-83, the
Hendrickses neither have had their Federal tax returns examined,
nor have they had taxes in excess of the amount reported on their
returns assessed. Furthermore, the Hendrickses have made an
honest attempt to pay their tax liabilities when they were able
and did so as quickly as possible. The Hendrickses paid in full
the balances due for 1980-82 by the end of 1993, and have already
paid more than $110,000 toward the balance due for 1983, $63,176
of which represents the underpayment attributable to Mr.
Hendricks’s investment in Boulder Oil and Gas.
Considering that petitioner did not receive significant
benefit from the understatements, that petitioner would suffer
considerable economic hardship if relief were denied, and that
the Hendrickses have complied with Federal tax laws at least
since 1983, we conclude that on the basis of all the facts and
circumstances it would be inequitable to hold petitioner liable
for the understatement of tax for 1983. Petitioner has satisfied
the section 6015(b)(1)(D) requirement.
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