Wayne Payne and Dorene J. Payne - Page 22

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          requesting spouse.  Mrs. Payne had reason to know in each year at           
          issue that HRDC’s returns understated its taxes.  Mrs. Payne                
          worked in HRDC’s offices and was responsible, with Ms. Enerson,             
          for maintaining HRDC’s books and records.  Mrs. Payne was aware             
          that the money from the extras was not deposited into HRDC’s bank           
          account, and Mrs. Payne testified that at some point she knew the           
          tax returns were based upon bank deposit records.  She also                 
          helped Ms. Enerson compile information for Mr. Gunderson to                 
          complete the returns.  In addition, petitioners owned HRDC in               
          approximately equal shares in 1993 and 1994.  Mr. and Mrs. Payne            
          both worked for HRDC, and together they were involved in all                
          aspects of the business.  Because of their involvement, it is               
          difficult to conclude that the unreported income received by                
          petitioners through HRDC in 1993 and 1994 was not attributable to           
          one spouse or the other.  Therefore, Mrs. Payne is not entitled             
          to relief under section 6015(b).                                            
               Section 6015(f) gives the Commissioner discretion to grant             
          innocent spouse relief to a requesting spouse if relief is not              
          available under subsection (b) or (c) and, taking into account              
          all the facts and circumstances, it is inequitable to hold the              
          requesting spouse liable for any unpaid tax or deficiency.   We             
          review the Commissioner’s denial of relief under subsection (f)             
          for an abuse of discretion.  Washington v. Commissioner, 120 T.C.           
          137, 146 (2003).  Rev. Proc. 2000-15, 2000-1 C.B. 447, contains             

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