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that petitioner’s status as the sole owner of Interactive Arts
subjects him to any and all tax liability associated with the
income earned by the business. Respondent did not, however,
offer evidence to rebut petitioner’s testimony, which this Court
finds credible, that both petitioner and Ms. Peet actively
participated in the affairs of Interactive Arts that produced
income for the business during the years at issue. Furthermore,
this Court has held that the income and losses of a business are
not blindly attributed to the person listed as proprietor of that
business on the joint return. See, e.g., Rowe v. Commissioner,
T.C. Memo. 2001-325. Accordingly, this factor weighs in favor of
granting relief.
Petitioner appears to have done everything within his power
to settle amicably the tax liabilities for the years at issue and
made a good faith attempt to comply with the tax laws and satisfy
his obligations with the IRS. Barring Ms. Peet’s deception, the
Court is convinced that the outstanding liabilities would have
been paid. Upon consideration of all of the facts and
circumstances, the Court finds that respondent’s determination to
deny relief under section 6015(f) to petitioner was an abuse of
discretion. Weighing all of the factors in this case both
supporting and opposing granting relief to petitioner, the Court
is satisfied that it would be inequitable to deny petitioner
relief under section 6015(f).
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Last modified: May 25, 2011