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Petitioner’s husband passed away on November 19, 2000, and
petitioner’s request for relief was received on May 22, 2003.
Condition 1 is satisfied.
The Court has reviewed the evidence and concludes that
petitioner has not shown that, at the time she signed the returns
at issue, she had no knowledge or reason to know that her late
husband would not pay the liabilities reported on the joint
returns for 1996 and 1997.
When she signed the 1996 tax return, she knew that her
husband was unemployed and that he had told her he did not have
any money to pay the tax liability. Dr. Velez was also still
embroiled in a lawsuit brought by a patient, the threat of which
had caused him and petitioner to file for bankruptcy in January
of 1995. Although Dr. Velez told petitioner that he “was
attempting to work out a payment agreement” with the IRS, “a
reasonable belief that taxes would be paid must at minimum
incorporate a belief that funds would be on hand within a
reasonably prompt period of time.” See Banderas v. Commissioner,
T.C. Memo. 2007-129. Petitioner does not meet all of the
required conditions for relief under Rev. Proc. 2003-61, sec.
4.02(1).
Where the requesting spouse fails to qualify for relief
under Rev. Proc. 2003-61, sec. 4.02, the IRS may nevertheless
grant relief under Rev. Proc. 2003-61, sec. 4.03, 2003-2 C.B. at
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Last modified: March 27, 2008