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petitioner’s basic living expenses, income, and net worth,
petitioner has not demonstrated that she would suffer an economic
hardship if she were denied relief from joint and several
liability. This factor weighs to some degree in favor of denying
equitable relief.
3. Knowledge or Reason To Know
In a situation where a liability has not been paid and the
requesting spouse did not know or had no reason to know that the
nonrequesting spouse would not pay the liability, this factor
would weigh in favor of granting relief. Rev. Proc. 2003-61,
sec. 4.03(2)(a)(iii). When petitioner and Mr. Magee separated,
petitioner stated that she left all her tax information and
records with Mr. Magee for him to file their joint return.
Petitioner was thus aware of the need to file the return, but she
did not participate in the preparation of the joint return. In
1996, petitioner was self-employed as a newspaper carrier and did
not make any estimated tax payments, nor did she have any tax
withheld for 1996.
Since petitioner and her then husband had a tax liability
resulting from his and her earned income, and petitioner did not
have any withholding or pay any estimated taxes for 1996,
petitioner knew or should have known that she could owe tax on
the joint return for at least her portion of the earned income.
While she testified that she did not think any tax would be due,
that assumption was not justified. Petitioner did not offer any
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