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Furthermore, intervenor had already made an estimated tax payment
of $1,400 to cover the self-employment taxes for the year 1998.
Petitioner had no reason to believe that there were insufficient
funds to cover the income tax liability, or that there were
insufficient funds for intervenor to pay the tax.
Petitioner contends she relied on intervenor’s assurance
that he would pay the 1998 tax liability. Absent any conflicting
evidence or testimony, the Court finds petitioner’s testimony
credible and holds that it was reasonable for her to believe that
intervenor would pay the reported liability. Wiest v.
Commissioner, supra. Therefore, petitioner has satisfied the
second element and qualifies for relief under section 6015(f).8
Respondent abused his discretion in denying her claim for relief,
and petitioner, therefore, is relieved of the entire amount of
the liability.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for petitioner.
8Rev. Proc. 2000-15, sec. 4.03, 2000-1 C.B. at 447, 448,
provides a facts and circumstances test whereby a taxpayer may
also qualify for relief under sec. 6015(f) (facts and
circumstances test). Although respondent and petitioner
addressed at trial many of the factors discussed in the facts and
circumstances test, it is not necessary for the Court to address
them because they are examined only when a taxpayer fails to
satisfy the three-element test.
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