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In the context of a disallowed deduction, “actual knowledge”
is present if the taxpayer had actual knowledge of the factual
circumstances which made the item unallowable as a deduction.
King v. Commissioner, 116 T.C. 198, 204 (2001). Knowledge of the
tax consequences resulting from the factual circumstances is not
required. Id. at 203-204.
Petitioner admitted that she prepared the tax return and
calculated the dependent care credit. The dependent care credit
petitioner claimed on the return was almost seven times greater
than the amount she actually paid for child care. At trial,
petitioner conceded that her calculation was incorrect and that
the amount of the deduction she claimed did “not sound normal”.
Additionally, petitioner admitted that she reviewed the return
before signing it.
The Court finds that petitioner had actual knowledge of the
item giving rise to the deficiency. The Court concludes that
petitioner is not entitled to relief under section 6015(b) or
(c).
Section 6015(f)
Section 6015(f) grants the Commissioner discretion to
relieve from joint and several liability an individual who files
a joint return. Section 6015 provides, in pertinent part, as
follows:
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Last modified: May 25, 2011