- 14 -
On the basis of the foregoing and petitioner’s $21,228.67
net worth (i.e., $28,238.61 (income and potential equity) less
$7009.94 (total living expenses)), the Court finds that
petitioner has not shown that she will suffer economic hardship
if she is not relieved of the tax liability. Consequently, this
factor weighs against granting relief. See Banderas v.
Commissioner, T.C. Memo. 2007-129 (stating that lack of economic
hardship weighs against relief under Rev. Proc. 2003-61); cf.
Butner v. Commissioner, T.C. Memo. 2007-136 (same under Rev.
Proc. 2000-15).
Knowledge or Reason To Know
The IRS will also consider whether the requesting spouse did
not know or had no reason to know that the nonrequesting spouse
would not pay the liability. Rev. Proc. 2003-61, sec.
4.03(2)(a)(iii)(A), 2003-2 C.B. at 298. In the case of a
reported but unpaid liability, the relevant knowledge is whether
the taxpayer knew or had reason to know when the return was
signed that the tax would not be paid. See Washington v.
Commissioner, 120 T.C. at 151; see also Feldman v. Commissioner,
T.C. Memo. 2003-201, affd. 152 Fed. Appx. 622 (9th Cir. 2005).
Petitioner must establish that: (1) At the time she signed the
return for each of the years at issue, she had no knowledge or
reason to know that the tax reported on each return would not be
paid; and (2) it was reasonable for her to believe that Mr.
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