- 33 - Construction in 1997 for the home improvements were addressed to petitioners’ personal residence. Petitioners shared a joint checking account for personal finances, Mrs. Kosinski’s name was on the account, and she wrote checks on that account. Even if her husband was responsible for balancing their joint checking account, as Mrs. Kosinski testified, it is implausible that Mrs. Kosinski was not aware that the expenses for improvements to petitioners’ home were paid out of T.J. Construction’s bank account and not from petitioners’ personal account. We do not believe Mrs. Kosinski’s implausible testimony and conclude that she was an active participant in a fraudulent scheme to understate petitioners’ income and tax liability. She has not met the requirement of section 6015(b)(1)(C), nor has she established, pursuant to section 6015(b)(1)(D), that it would be inequitable to hold her liable for the deficiency in petitioners’ tax for 1997. Statute of Limitations As a general rule, section 6501 provides that any tax must be assessed within 3 years of the date on which the pertinent tax return was filed. Sec. 6501(a). However, an exception exists in the case of a “false or fraudulent return”, under which exception tax may be assessed at any time. Sec. 6501(c)(1). Respondent bears the burden of proving fraud in this context. Sec. 7454(a); Rule 142(b). Because respondent has done so here for the reasonsPage: Previous 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 NextLast modified: November 10, 2007