Carlos R. and Maria L. Menendez - Page 4




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          collection activity relating to the liability; and the requesting           
          spouse did not have actual knowledge, at the time of signing the            
          joint return, of the item giving rise to the deficiency.  Sec.              
          6015(c)(3)(A)-(C).                                                          
               Ms. Menendez contends that she meets all requirements of               
          section 6015(c) and respondent agrees.  Mr. Menendez, however,              
          contends that relief is not available because Ms. Menendez signed           
          the inventory list indicating the IRA funds had been withdrawn,             
          and, therefore, she had actual knowledge of the item giving rise            
          to the deficiency.                                                          
               Although she signed the inventory list that noted a                    
          withdrawal of the IRA funds, the list was based on information as           
          of January 8, 2004.  Pursuant to the inventory list, Mr. Menendez           
          could have withdrawn his IRA funds at any time between October 1,           
          2003 and January 7, 2004.  Moreover, there is no other evidence             
          in the record to establish that Ms. Menendez had actual knowledge           
          of the withdrawal in 2003.  Cf. Cheshire v. Commissioner, 115               
          T.C. 183, 194 (2000) (taxpayer had actual knowledge when she knew           
          of the amount, the source, and the date of receipt of the                   
          retirement distribution), affd. 282 F.3d 326 (5th Cir. 2002).               
          Thus, she is entitled to relief pursuant to section 6015(c).                












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