Elsie R. Garza - Page 14

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          Petitioner bears the burden of proving that there was an abuse of           
          discretion.  Abelein v. Commissioner, T.C. Memo. 2004-274.                  
               In the case of an income tax liability that arises from a              
          deficiency, as exists in this case, a finding that the requesting           
          spouse had actual knowledge of the item giving rise to the                  
          deficiency is an extremely strong factor weighing against relief.           
          Rev. Proc. 2003-61, sec. 4.03(2)(a)(iii)(B).  Thus, petitioner              
          must establish that she did not know about Mr. Garza’s renewal              
          income during 2002 and 2003.                                                
               As discussed earlier, petitioner had actual knowledge of Mr.           
          Garza’s renewal income.  In the 2002 audit examination, the sole            
          issue was Mr. Garza’s receipt of renewal income in taxable years            
          1999-2001.  Petitioner was present during the audit examination             
          and testified that the audit examiner made her aware that Mr.               
          Garza, even though retired, continued to receive renewal income             
          from AILIC.  Further, petitioner does not dispute that the Forms            
          1099-MISC for Mr. Garza’s renewal income for the years at issue             
          were sent directly to her at her mother’s address.  Petitioner              
          testified that Mr. Garza checked the mail at her mother’s address           
          while petitioner was working and took the Forms 1099-MISC without           
          her knowledge.  On her Form 12510, however, petitioner stated               
          that she inquired many times about the omitted renewal income and           
          was told not to worry about it.  The Court finds that petitioner            
          had actual knowledge of the items giving rise to the                        

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