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the overpayment to be a credible basis to show that petitioner
had reason to believe that the tax would be paid.
The evidence also points to the conclusion that petitioner
actually knew that the liability would not be paid when the
return was filed. The record demonstrates that petitioner was
extremely concerned about the filing of the 1996 tax return and
had sought the advice of accountants to file a separate return.
The most prominent indicator of petitioner’s knowledge that the
liability would not be paid when the return was filed was her own
attorney’s statement after the joint return was filed. Acting on
petitioner’s behalf, he informed Mr. Swartz that the Merendinos
were discussing a joint offer-in-compromise arrangement with the
IRS in Baltimore to pay for the joint liability. Therefore, the
circumstances reveal that petitioner was aware of a large tax
liability due and problems associated with the payment of that
tax when the return was filed in December 1998. We believe any
testimony of petitioner to the contrary is based upon
misunderstandings as to her knowledge at the time the return was
actually filed.
3. Economic Hardship
Petitioner contends that she will suffer economic hardship
if respondent does not grant relief under section 6015(f).
Petitioner cites her age (she was 65 at the time she requested
relief), her inability to work, her health problems, and the
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