- 7 - In the instant case, petitioner knew or had reason to know of the omitted item giving rise to the deficiency. A requesting spouse has a duty of inquiry. Butler v. Commissioner, 114 T.C. 276, 284 (2000). A requesting spouse has reason to know of an understatement if a “reasonably prudent person with knowledge of the facts possessed by the person claiming * * * [relief] should have been alerted to the possibility of a substantial understatement.” Flynn v. Commissioner, 93 T.C. 355, 365 (1989). There is no question that petitioner was aware intervenor was employed by Greenwood Mills throughout 1997. The top line of page two of the Easlers’ 1997 tax return shows an adjusted gross income of $12,030.78. A few inches above where petitioner signed her name on page two, line 29a shows total tax withholdings from Forms W-2 of just $444.24. Such circumstances should have alerted a reasonably prudent person that there was an understatement of tax. Section 6015 relief was not intended for spouses who simply did not look at the amount of income reported on the return, unless it is clearly established that the spouse was forced under duress to sign the return without looking at it. Frederick v. Commissioner, T.C. Memo. 1981-602. The record in the instant case does not support a conclusion that petitioner was forced to sign the return under duress. Even though petitioner did not have a college degree or any businessPage: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011