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Commissioner, 116 T.C. at 204. Although the requesting spouse
bears the burden of proving the portion of the deficiency that is
properly allocable to her, see sec. 6015(c)(2), respondent bears
the burden of proving that the requesting spouse had actual
knowledge of any items giving rise to the deficiency, sec.
6015(c)(3)(C).
2. Reasonableness of Respondent’s Position
Respondent contends that the position taken in the notice of
determination was substantially justified because the information
available to the Appeals officer at the time led him to believe
that “petitioner had actual knowledge of the items giving rise to
the deficiencies”. In arguing that the Appeals Office’s position
was reasonable, respondent explains that because the Appeals
officer determined that petitioner had actual knowledge, he did
not have to consider whether disqualified assets had been
transferred to petitioner, whether assets had been transferred
between petitioner and Mr. Owen as part of a fraudulent scheme,
or how the deficiencies in issue could be allocated under section
6015(d).
Respondent further contends that the position in the answer
was substantially justified because (1) the information available
to him at the time showed that petitioner had knowledge of and
had been involved with the Hoyt organization, and (2) without
further factual development, it was impossible to determine
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