- 15 -
issue. Therefore, petitioner knew when she signed her joint
return for each of the years at issue that there was an
understatement of tax. Rev. Proc. 2003-61, supra, specifically
states that actual knowledge by the requesting spouse of the item
giving rise to the deficiency is a strong factor weighing against
relief. This strong factor may only be overcome if the factors
in favor of equitable relief are particularly compelling.
The fourth and sixth factors are neutral. There was no
legal obligation on either side to pay for the liability for the
years at issue and there is no evidence that petitioner either
failed to comply with or fully complied with tax obligations.6
Petitioner also fails to satisfy the fifth factor, because
although the gross income and claimed deductions from which the
liability arises is directly attributable to Mr. Clark,7
petitioner received a significant benefit from the items giving
rise to the deficiency. This benefit goes beyond that of normal
support. Part of Mr. Clark’s unreported income was deposited
6In determining whether petitioner complied or failed to
comply with tax obligations, the Court notes that petitioner did
not allege she suffered any abuse, mental or physical, from Mr.
Clark. In addition, petitioner presented no evidence that she
was in poor mental or physical health either when she signed the
return or when she filed her request for relief.
7The liability for the years at issue consisted of
unreported nonemployee compensation to Mr. Clark, a claimed
deduction for unreimbursed employee expenses for Mr. Clark, a
claimed deduction for moving expenses for Mr. Clark, and Schedule
C losses attributed to Mr. Clark’s business.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011