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received by Mr. Lathrop and $9,250 of nonemployee compensation he
had earned. On June 12, 2002, a notice of deficiency was issued
to petitioner and Mr. Lathrop in which respondent determined a
deficiency of $3,603 in Federal income tax for 2000 based on
their failure to include these items of income on the return.2
Neither petitioner nor Mr. Lathrop petitioned this Court in
response to the notice of deficiency. Accordingly, the
deficiency was assessed.
On December 9, 2002, respondent applied a $2,012 overpayment
of tax from petitioner’s individual return for taxable year 2001
to the unpaid tax liability for the year at issue. Petitioner,
thereafter, filed a Form 8857, Request for Innocent Spouse
Relief, on July 7, 2003. She alleges that Mr. Lathrop prepared
their 2000 tax return, that the omitted items of income were his
income, and that she signed the return without reviewing its
contents. On April 14, 2004, respondent issued a Final Notice to
petitioner determining that she was not entitled to relief from
joint and several liability under section 6015(b), (c), or (f)
for taxable year 2000 because she was aware and knew that the tax
shown on the return would not be paid at the time of filing; she
had actual knowledge of the omitted income giving rise to the
2The omitted income enabled petitioner and Mr. Lathrop to
qualify for an earned income credit of $406. As a result of the
inclusion of the unreported income, the earned income credit was
not allowable due to the limitation of sec. 32(a)(2).
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