Judith A. Madden - Page 19

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         weighing in favor of granting relief.  Rev. Proc. 2000-15, sec.              
         4.03(1)(d), 2000-1 C.B. at 449.  By contrast, the fact that the              
         requesting spouse knew or had reason to know that the reported               
         liability would be unpaid is a strong factor weighing against                
         relief.  Id. sec. 4.03(2)(b).                                                
              When petitioner signed the 2000 joint return in August 2001,            
         $13,000 remained in the Paine Webber account.  Petitioner knew               
         that she and Mr. Sturges did not have funds available at that                
         time to pay the $141,302 tax liability shown as unpaid on the                
              We do not think that petitioner honestly believed that Mr.              
         Sturges could pay the tax from proceeds from the Tiburon options.            
         The section 83(b) election attached to the return states that Mr.            
         Sturges paid $57,050.10 (30 cents per share) for 190,167 shares              
         of Tiburon restricted stock on October 23, 2000.  Petitioner                 
         produced no evidence that the stock had increased in value since             
         the purchase date.  Petitioner testified that by October 2001                
         Tiburon was failing and that in November 2001 Mr. Sturges left               
              Petitioner and Mr. Sturges attached to the return a                     
         statement signed by Mr. Sturges that he would be filing an offer-            
         in-compromise.  Petitioner and Mr. Sturges filed their first                 
         offer-in-compromise offering to compromise their 2000 tax                    
         liability for $1 on October 22, 2001.  We conclude that                      

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