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Examiner based her determination on the rationale that
Petitioner “should have known something was going on”,
referring only to the liability itself. * * * there is
no evidence that Petitioner had actual knowledge of the
underpayment.
* * * it is not reasonable for Petitioner to have
known that the tax would not be paid. All of the
Petitioner’s relevant evidence indicates that Peti-
tioner never even inquired about the tax prior to
receiving Respondent’s notice of unpaid liability.
Further, Respondent has produced no evidence that
Petitioner inquired about the tax.
Knowledge of the liability, whether actual or
constructive, is not equal to knowledge of whether
Petitioner knew or should have known whether the tax
would be paid. It is not reasonable for Petitioner to
inquire about payment of an unknown underpayment if
Petitioner did not actually know about the underpayment
itself.
* * * * * * *
The facts in this case are similar to those in
Wiest v. Commissioner, T.C. Memo 2003-91. In Wiest,
* * * As to equitable relief under �6015(f), the deter-
mination letter provided that “underpayment was evident
at the signing of the joint return. The taxpayer would
have had knowledge/reason to know of the underpayment
at the time of signing the tax return.” * * * The Court
held [in Wiest] that Respondent abused his discretion
in denying relief under �6015(f) with respect to an
amount of tax reported on petitioner’s joint return but
not paid. [Reproduced literally.]
Respondent argues that the knowledge or reason to know
positive factor is not present in the instant case. In support
of that argument, respondent asserts on brief:
Despite the fact that the text “AMOUNT YOU OWE
[$]12443” was an inch above petitioner’s signature on
the [1998] return * * *, she claimed ignorance that any
tax was owed. If petitioner was unaware that tax was
due, she had a duty to inquire whether tax was owed.
* * *
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