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then, for purposes of this title, such item of community
income shall be included in the gross income of the other
spouse (and not in the gross income of the individual). * * *
Section 66(c) pertains to items of community income, and that
is one component of respondent’s calculations that led to his
determination that petitioner is liable for a deficiency in income
tax for 2001. According to respondent, the amount of income,
including community income, that petitioner should have reported
in her 2001 return was $215,647.66. Petitioner reported gross
income of $165,463.20, which is $50,184.46 less than respondent
determined, giving rise to a deficiency in tax of $5,921.
Petitioner may be relieved of liability for the tax associated
with this community income if she meets all four of the criteria
of section 66(c). We find that she does not.
The parties agree that petitioner meets the first and second
conditions of section 66(c). Respondent contends that petitioner
does not satisfy the third condition, which relates to
petitioner’s knowledge of the community income. Petitioner
contends that she did not have access to Dr. Geaccone’s books and
records, which would have shown the amount of his earnings, and
therefore she had no knowledge of his earnings as an item of
community property. Petitioner testified that her divorce was not
amicable and that by the time she filed her 2001 tax return in
2002, her relationship with Dr. Geaccone had deteriorated to the
point that they were no longer in direct communication.
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