Robby Goodale Gilbert - Page 12

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          paid at the time the return was filed; however, the Court                   
          disagrees.  In essence, respondent contends that, notwithstanding           
          the absence of factors to intimate financial infidelity on the              
          part of Ms. Peet, petitioner should have known that the money he            
          designated for the 2000 tax liability was instead siphoned into a           
          private account in her name.  There is nothing in the record to             
          indicate that petitioner had reason to suspect the financial                
          deception from Ms. Peet that gave rise to the underpayment of tax           
          for 2000.  The Court, thus, finds that petitioner did not know or           
          have reason to know that the tax liability for 2000 would not be            
          paid at the time the return was filed.                                      
               Rev. Proc. 2000-15, sec. 4.03(1)(e), 2000-1 C.B. at 449,               
          considers whether the nonrequesting spouse had a legal obligation           
          pursuant to a divorce decree or other agreement to pay the                  
          liability for which relief is sought.  According to the terms of            
          the divorce decree, Ms. Peet was obligated to pay $7,508.08 for             
          her share of the tax liability for 2000 and $1,462.50 for her               
          portion of the tax liability for 2001.10  This factor supports              
          granting relief to petitioner because, by making continued                  
          payments on his installment agreements, he paid in excess of what           

               10The return for 2001 reflected an underpayment of tax in              
          the amount of $5,850.  Because Ms. Peet was liable under the                
          divorce decree for one-fourth of the reported tax liability for             
          2001, she is obligated to pay $1,462.50 of the total liability              
          for that year.                                                              

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