Elsie R. Garza - Page 9

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          tax if she knew every fact necessary to determine the legal                 
          consequences of the income or if such facts are reasonably within           
          her reach; ignorance of the attendant tax consequences is not a             
          defense.  Mitchell v. Commissioner, 292 F.3d 800, 804-804 (D.C.             
          Cir. 2002), affg. T.C. Memo. 2000-332; Price v. Commissioner, 887           
          F.2d 959, 964 (9th Cir. 1989); McCoy v. Commissioner, 57 T.C.               
          732, 734-735 (1972).                                                        
               In the instant case, the Court finds that petitioner knew or           
          had reason to know of the understatements of tax at the time the            
          returns for 2002 and 2003 were filed.  The Court is satisfied               
          that petitioner was aware that Mr. Garza received renewal income            
          during the years at issue.  Petitioner admitted in her testimony            
          that she was aware that Mr. Garza received renewal income in 1999           
          because she discussed with him the receipt of such income when              
          she received in the mail a Form 1099-MISC, Miscellaneous Income,            
          from AILIC for that year.  Additionally, Mr. Garza’s receipt of             
          renewal income, as well as the tax consequences arising                     
          therefrom, were the subject of an audit examination conducted by            
          agents of respondent sometime in 2002 for taxable years 1999-               
          2001.  At trial, when asked whether she participated in the audit           
          examination, petitioner testified:  “Yes, that’s when I got my              
          education on what was going on.”  Moreover, petitioner admitted             
          on her Form 12510, Questionnaire for Requesting Spouse, that she            
          questioned Mr. Garza about the renewal income he received during            

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