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was deceptive in that he told petitioner she had to file joint
Federal income tax returns with him and that the Hoyt
partnerships would be his responsibility. Finally, there
occurred no unusual or lavish family expenditures that would have
notified petitioner of the understatement.
Respondent contends that the size of the deductions on the
tax returns was sufficient to instill in petitioner a duty to
inquire. Even if such a duty arose, petitioner satisfied the
duty of inquiry by confronting Glenn each year and questioning
the Hoyt partnership-related items.
Because petitioner did not know or have a reason to know
that the deductions were erroneous, and because she satisfied her
duty of inquiry, petitioner satisfies section 6015(b)(1)(C).
Section 6015(b)(1)(D): Inequity
Whether it would be inequitable to hold a spouse liable for
a tax deficiency is determined by “taking into account all the
facts and circumstances.” Sec. 6015(b)(1)(D).4 The two most
often cited factors to be considered are: (1) Whether there has
been a significant benefit to the spouse claiming relief, and
(2) whether the failure to report the correct tax liability on
4“The requirement in sec. 6015(b)(1)(D) * * * is virtually
identical to the same requirement of former sec. 6013(e)(1)(D);
therefore cases interpreting former sec. 6013(e) remain
instructive to our analysis.” Doyel v. Commissioner, T.C. Memo.
2004-35.
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