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being audited. He also knew that he was signing the 1993 return
more than a year late. This was enough to trigger his “duty of
inquiry,” because a reasonable person in his position would have
gotten suspicious that Manns was no longer behaving as expected.
See Feldman v. Commissioner, T.C. Memo. 2003-201, affd. 152 Fed.
Appx. 622 (9th Cir. 2005) (knowledge of an ex-spouse’s
deteriorating mental condition should have caused the taxpayer to
inquire into whether his ex-spouse had paid their taxes).
Instead of taking a closer look at what was going on, however,
Motsko continued to have nothing to do with the finances. This
was not reasonable.
By the time he signed the 1996 return, we find that he
actually knew that the tax would not be paid. Manns had already
been indicted on 13 counts of tax evasion and pleaded guilty to 5
of them. He knew that she was on her way to jail, and he
testified that she had told him that there was nothing that she
could do about the taxes due on the 1996 return until after she
was released. See Kleinman v. Commissioner, T.C. Memo. 1994-19
(wife charged with knowledge after husband indicted).
This leaves the balancing test--eight factors to consider in
deciding whether relief would be “equitable.” Rev. Proc. 2000-
15, sec. 4.03, 2000-1 C.B. at 448. These factors are not the
only ones that the Commissioner and we can look at, but they are
where we start. Rev. Proc. 2000-15, sec. 4.03, 2000-1 C.B. at
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