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deficiencies.8 Petitioner’s actual knowledge is a strong factor
weighing against relief, which can be overcome only if the
factors in favor of equitable relief are particularly compelling.
Petitioner contended at trial that she would experience
economic hardship if she were forced to pay the tax liabilities
for the years at issue. A taxpayer might experience economic
hardship if he or she is unable to pay basic reasonable living
expenses. Sec. 301.6343-1(b)(4)(i), Proced. & Admin. Regs. It
is the taxpayer’s burden to show both that the expenses qualify
and that they are reasonable. Monsour v. Commissioner, T.C.
Memo. 2004-190. Despite her assertion that paying the tax
liabilities would cause her to experience economic hardship,
petitioner provided no evidence at trial that she would be unable
to pay basic living expenses if she were held liable for the
deficiencies. As noted earlier, petitioner was and remains
gainfully employed. The Court fails to see, and petitioner has
not established, that she would suffer economic hardship if her
request for relief were denied. This factor weighs against
granting relief to petitioner.
On the basis of the facts and circumstances in this case,
including the factors set forth in Rev. Proc. 2003-61, supra, the
8Rev. Proc. 2003-61, sec. 4.03(2)(a)(iii)(c), provides
factors to consider in determining whether the requesting spouse
had reason to know of the item giving rise to the deficiency.
Because the Court is convinced that petitioner had actual
knowledge of the omitted items of income, consideration of these
factors is superfluous.
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