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“an item of income, deduction, or credit”. Cheshire v.
Commissioner, supra at 337.
In the case of omitted income, knowledge of the item
includes knowledge of the receipt of the income. Sec. 1.6015-
3(c)(2)(i)(A), Income Tax Regs. This Court has reviewed the
record and finds that there is insufficient evidence to establish
that petitioner had actual knowledge that intervenor received the
omitted income.
The IRS may rely upon all of the facts and circumstances to
demonstrate that a requesting spouse had actual knowledge of an
erroneous item at the time the spouse signed the return. Sec.
1.6015-3(c)(2)(iv), Income Tax Regs. Respondent argues that
petitioner had actual knowledge of the omitted income, at the
time that the return was signed, because: (1) Petitioner had
access to a bank account that she held jointly with intervenor
during 2000, and (2) petitioner picked up and opened mail at the
address where the Forms 1099 for the omitted income were sent.
Petitioner admits that she had access to one of intervenor’s
bank accounts. Petitioner contends, however, that intervenor
maintained bank accounts held solely in his name, of which she
had no knowledge and to which she had no access to during their
marriage. According to petitioner, the money from these secret
accounts was used to finance intervenor’s “secret life” with
other women. Petitioner suggests that it is possible that
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