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The Court first examines the Appeals officer’s
determination that petitioner had actual knowledge of the
unreported pension distribution. If petitioner had actual
knowledge, she cannot be afforded relief under section 6015(b) or
(c). Under section 6015(b), the taxpayer must not have known or
had any reason to know that the other spouse understated that
spouse’s tax liability on the return. Sec. 6015(b)(1)(C), (2).
Relief under section 6015(c) is not available to a taxpayer if it
is shown that the taxpayer had actual knowledge when signing the
return of any “item” giving rise to a deficiency. Sec.
6015(c)(3)(C).3
The Appeals officer met with petitioner before issuing a
notice of determination. Because the Appeals officer was unable
to retrieve the case file of petitioner’s settlement hearing
resulting from her March 1999 petition for relief from joint
liability, petitioner was afforded time to provide information to
the Appeals officer to support her claim. In the notice of
determination, the Appeals officer stated:
3Although, generally, the burden is on the Commissioner to
prove that a taxpayer had “actual knowledge” under sec. 6015(c),
the Court is evaluating this case under an abuse of discretion
standard; therefore, the issue before the Court is not whether
petitioner had actual knowledge as to the pension distribution,
but whether the Appeals officer abused her discretion in deter-
mining such. As a result, petitioner need not prove she had no
actual knowledge; rather, petitioner need only show the Appeals
officer abused her discretion in determining petitioner had actu-
al knowledge and thereby denying relief.
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Last modified: May 25, 2011