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from her own assets. See sec. 301.6343-1(b)(4)(i), Proced. &
Admin. Regs. We find respondent’s assertion without any evidence
to be nonpersuasive in overcoming the prima facie case made by
petitioner in Appeals.
6. Knowledge or Reason To Know
Petitioner admits she knew the tax liabilities would not be
paid. She was in a disadvantageous position to cause the payment
of the liabilities, however. Her husband completely controlled
the income from his business, and we find petitioner’s testimony
that she had no direct access to the business receipts to be
credible. Accordingly, while this factor is disadvantageous to
petitioner, under the limited circumstances of this case we do
not find this determination to be fatal to petitioner’s claim for
relief.
7. Whether the Underpayment of Tax Is Attributable to
the Ex-Spouse
Respondent finds this factor favorable to petitioner, and we
agree.
8. Legal Obligation To Pay
Because there is no such obligation, this factor is neutral.
D. Conclusion
Because we find economic hardship and a lack of significant
benefit from the income subject to tax, we are compelled to
conclude respondent has abused his discretion in denying relief
on the facts of this case.
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