Timothy and Barbara Kosinski - Page 31




                                        - 31 -                                        
          offered therein.  Alt v. Commissioner, 119 T.C. 306, 313 (2002),            
          affd. 101 Fed. Appx. 34 (6th Cir. 2004).                                    
               Respondent argues that Mrs. Kosinski has failed to meet the            
          requirements of subparagraphs (C) and (D) of section 6015(b)(1).            
          Petitioners argue that Mrs. Kosinski meets the requirements of              
          section 6015(b)(1)(C) because she had no actual knowledge of                
          improper deductions taken on petitioners’ tax return and because            
          she did not benefit from the improper deductions “because of the            
          volume of income on the tax return.”  Petitioners urge the Court            
          to consider “how a reasonable person would react to a 1997 tax              
          return where $1,392,874.00 of taxable income is reported and                
          $521,305.00 of tax is paid, knowing that her spouse had withdrawn           
          large amounts of cash from the bank.”  We understand petitioners’           
          argument to be that Mrs. Kosinski was not capable of                        
          understanding that excessive costs of good sold and deductions              
          were improperly claimed on their tax return for 1997 because                
          there was too much money involved overall for her to notice the             
          discrepancy.  Given Mrs. Kosinski’s education and employment                
          history, as well as her substantial and active role in the cash             
          structuring transactions, we are not persuaded by this argument.            
               Petitioners also argue that Mrs. Kosinski was unaware of any           
          necessary increase in petitioners’ income due to the $21,252 of             
          expenses related to improvements to petitioners’ home that was              
          paid out of T.J. Construction’s account and deducted as business            







Page:  Previous  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  Next 

Last modified: November 10, 2007