- 5 -
individual liable for the deficiency in tax for
such taxable year attributable to such
understatement; and
(E) the other individual [makes a valid
election] * * *.
Respondent concedes that petitioner has satisfied the
requirements under subparagraphs (A), (B), and (E) of section
6015(b)(1). At issue are the requirements under subparagraphs
(C) and (D) of section 6015(b)(1).
Under section 6015(b)(1)(C), the requesting spouse must
establish that in signing the return, he or she did not know or
had no reason to know of the understatement. A requesting spouse
has knowledge or reason to know of an understatement if he
actually knew of the understatement, or if a reasonably prudent
taxpayer in his position, at the time he signed the return, could
be expected to know that the return contained an understatement
or that further investigation was warranted. Mora v.
Commissioner, 117 T.C. 279, 287 (2001); Butler v. Commissioner,
supra at 283; see sec. 1.6015-2(c), Income Tax Regs.
Petitioner agrees that he knew Ms. Valentine received a
distribution from her 401(k) account in 1999. Petitioner,
however, contends that he did not know that there was an
understatement of tax on the 1999 return, because he was not
aware that the distribution would be subject to a 10-percent
additional tax under section 72(t).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011