Cheryl Kunsman - Page 10
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convinced that petitioner did not understand the business and
have a sense of the profit therefrom.
The IRA distribution was reflected on the 1999 Form 1040,
which the Court has found to be a joint return. Petitioner was
certainly aware of Mr. Kunsman’s age in 1999. Thus, petitioner
shared with Mr. Kunsman the legal responsibility to ensure the
proper reporting of the additional tax on an early distribution
pursuant to section 72(t).
“A taxpayer is presumed to have knowledge of the tax
consequences of a transaction”. Cheshire v. Commissioner, 115
T.C. 183, 197 (2000), affd. 282 F.3d 326 (5th Cir. 2002).
Ignorance of the law is no defense. Id. at 196. In fact,
petitioner acknowledged that both she and her former spouse were
aware that a 10-percent additional tax was imposed on early
Based on the entire record, the Court finds that petitioner
had actual knowledge of the income from the 1999 IRA
distribution(s). She also had actual knowledge that an
additional tax is imposed by section 72(t). Accordingly, she has
failed to establish that “she did not know, and had no reason to
know, that there was [an] understatement”. Sec. 6015(b)(1)(C).
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Last modified: November 10, 2007