- 13 -
signed. Wiest v. Commissioner, T.C. Memo. 2003-91 (citing Notice
98-61, sec. 3.03(2)(b), 1998-2 C.B. 756, 757); see also Rev.
Proc. 2000-15, sec. 4.03(1)(d), 2000-1 C.B. at 449. Petitioner
contends that she did not know or did not have reason to know
that the liability would not be paid. Petitioner asserted in
documentation submitted to the Appeals Office that she expected
the tax liability would be paid out of the sale of Dr.
Merendino’s business and that although a portion of the
outstanding liability was attributable to her, Dr. Merendino had
always paid the tax liabilities in previous years and she
expected him to do so again for the 1996 liability. At trial,
petitioner testified that she believed the funds to pay the tax
liability would come from the sale of Dr. Merendino’s business
and from the overpayment of $400,000 that Dr. Merendino made for
a previous year. Petitioner further stated that she relied on
Dr. Merendino to file the return and pay the taxes.
Petitioner’s reasons for believing that the tax liability
would be paid are not credible. The return was filed in December
1998. It was not reasonable for petitioner to rely on the funds
from the sale of Dr. Merendino’s business to pay for the tax
liability by the time the return was filed. The settlement of
the lawsuits against Dr. Merendino’s business occurred on June
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011