Even If You’re in CNC

CNC is not a slam dunk for innocent spousery. STJ Peter (“HB”) Panuthos has that lesson for Ahmed Maregn Mohamed, T. C. Sum Op. 2023-6, filed 3/7/23.

Ahmed’s troubles are 97% his own, because he failed to report his unemployment insurance receipt and $15K of his wages when he was working. His 1040 MFJ with ex-spouse Zemzem also failed to include her qualified dividends. Ahmed “… indicated that he had not reviewed the tax return before it was filed and that a mistake had been made by the preparer. Petitioner also indicated that he had knowledge of Ms. Bedada’s income as a ‘W–2’ and a ‘health-related benefit.’” T. C. Sum. Op. 2023-6, at p. 3.

STJ Panuthos rules out hardship, because Ahmed is in CNC. ” Petitioner has been granted currently not collectible status for tax year [at issue]…. There is nothing in the record from which to conclude that denying relief would cause economic hardship. This factor is neutral.” T. C. Sum. Op[. 2023-6, at p. 7.

And knowledge defeats everything else.

“After weighing the factors and considering the facts and circumstances, the Court is unable to conclude that it would be inequitable to hold petitioner liable for the tax liability. Petitioner had knowledge of the item giving rise to the unreported income before signing the return. Therefore, petitioner is not entitled to relief under section 6015(b), (c), or (f).” T. C. Sum. Op. 2023-6, at p. 9.