Russell Whiting Packer - Page 12

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         Proced. & Admin. Regs.  Unique circumstances do not include the              
         maintenance of an affluent or luxurious standard of living.                  
              There is no indication on the record that petitioner lives              
         an extravagant lifestyle.  Petitioner, however, has offered no               
         evidence that payment of the deficiency, in part or in full,                 
         would cause him financial hardship.  This is a neutral factor.               
              3.   Knowledge or Reason To Know                                        
              Actual knowledge of the item giving rise to the deficiency              
         is a strong factor weighing against relief.  Rev. Proc. 2003-61,             
         sec. 4.03(2)(a)(iii)(B).  Petitioner agrees that he had actual               
         knowledge of the distribution.                                               
              4.   Nonrequesting Spouse’s Legal Obligation                            
              This factor weighs in favor of the requesting spouse where              
         the nonrequesting spouse has a legal obligation to pay the                   
         outstanding income tax liability pursuant to a divorce decree or             
         an agreement.  Id. sec. 4.03(2)(a)(iv).  The Decree of                       
         Dissolution of Marriage entered by the Superior Court of Arizona             
         is silent as to the treatment of any potential income tax                    
         deficiency from joint returns filed by petitioner and Ms.                    
         Valentine.  Petitioner has offered no evidence to show that Ms.              
         Valentine has a legal obligation, pursuant to other agreement, to            
         pay the 1999 tax deficiency.  This is a neutral factor.                      

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Last modified: May 25, 2011