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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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