- 13 - Respondent contends that petitioner knew or had reason to know that the tax liability would not be paid. In support of his contention, respondent asserts: (1) Petitioner and Mr. Puckett filed for bankruptcy 1 week before signing their return; (2) when petitioner signed the return, she had constructive knowledge of the tax liability shown on the return; and (3) because of their financial difficulties, petitioner knew that Mr. Puckett would not pay the tax liability. Having observed petitioner’s appearance and demeanor at trial, we find her testimony to be honest, forthright, and credible. We conclude, however, that petitioner had reason to know that Mr. Puckett would not pay the liability reported on the 2000 return. Petitioner testified at trial that she knew when she signed the return that it reported a balance due and that no payment was remitted with the return. She asserts, however, that she was urged by her accountant to execute the return because “it makes for better divorce relations if I [petitioner] sign jointly and it will reduce the amount he [Mr. Puckett] owes”. Petitioner further asserts that if she had known she would be liable for Mr. Puckett’s unpaid tax liability, she would not have filed a joint return. Notwithstanding, however, petitioner admitted that she probably knew that there was a good chance Mr. Puckett was not going to pay the tax liability and that she “definitely didn’t care how he was going to pay it.” Indeed, petitioner admittedPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011