Deborah Ann Puckett - Page 14

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               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 admitted              






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