- 28 -
selective avoidance of tax liabilities. Nonetheless, the Court
is also cognizant that, while the bankruptcy establishes reason
to know that the taxes would not be paid at the time of filing,
its pendency could have engendered a degree of confusion in
petitioner’s mind as to responsibility for the taxes and the
eventual source of funds for their payment. The Court therefore
is unconvinced that the substantial benefit prong weighs strongly
either for or against relief.
The compliance with income tax laws factor addresses the
good faith efforts of the requesting spouse in subsequent years.
Rev. Proc. 2003-61, sec. 4.03(2)(a)(vi), 2003-2 C.B. at 299. The
record indicates that petitioner’s 2000 return was not timely
filed and that amounts due remained outstanding until at least
February of 2004. The 2001 and 2002 returns were timely filed,
but the balance due for 2001 was not paid until January of 2003.
The 2002 taxes were timely paid. As of the time of trial, IRS
records did not reflect that petitioner had filed her 2003 or
2004 returns. Petitioner testified that she believed she timely
filed the 2003 return but refiled it, in response to IRS
inquiries, shortly before the trial in November of 2005, at which
time she also filed her initial return for 2004. Petitioner also
explicitly conceded at trial and on brief that various of her
returns and related payments were delinquent on account of
financial difficulties, moves, misplaced documents, etc.
Page: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Next
Last modified: November 10, 2007