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In support of her position that the knowledge or reason to
know element is present in the instant case, petitioner argues:
Intervenor [Mr. Krasner], who was solely and fully
responsible for making adequate withholdings from his
professional corporation “learned” in late 1998 that he
had underwithheld, and withheld this information from
Petitioner until the return for 1998 was prepared in
1999. Intervenor had sole authority and ability to
make the necessary transfers and deposits into the
Krasners’ joint personal checking account from his
business accounts. In addition, from late 1998 up
until the due date of the tax return in question,
Intervenor was experiencing over a fifty percent (50%)
increase in his income. The court in Levy v. Commis-
sioner, T.C. Memo. 2005-92 held in granting innocent
spouse relief that where a party “...earned substantial
income from which he had adequate funds to pay the
reported...balance due amounts” provided a basis for
Petitioner’s expectation that the taxes would be paid
in full. It is not credible to have Intervenor on the
one hand control the flow of funds into the Krasners’
account with which to pay the taxes, and on the other
have him instruct Petitioner to set aside money to pay
the outstanding delinquent taxes, with no access to
funds, with which to do so. Therefore, this factor
should weigh positively in favor of granting the relief
requested by Petitioner. [Reproduced literally.]
We turn first to petitioner’s reliance on Levy v. Commis-
sioner, T.C. Memo. 2005-92. Levy is materially distinguishable
from the instant case, and petitioner’s reliance on that case to
support her position with respect to the knowledge or reason to
know element is misplaced. In Levy, the (1) nonrequesting spouse
(a) did not discuss with the requesting spouse the preparation
and filing of the tax return in question or the payment of the
tax shown due in that return, (b) exercised complete control over
the household expenditures and the money that the requesting
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