Did Kay know about the Sollozzo incident?

I caught a short piece of GF1 on TV today. The scene where Kay brings the letter to Tom to give to Michael, Tom replies with something to the effect: "If I accept this letter, they could prove in a court of law that I knew of his whereabouts...".

Was Tom being sarcastic, or was he really concerned about what the court would think? Unless Kay knew about the Sollozzo murder, it seems like her response should have been: "why do you care what the court thinks?".

It alway seemed like a peculiar line to me.

Kay undoubtedly read about the Sollozzo/McCluskey murders in the newspapers, just like millions of other readers. She might have connected Michael's sudden and unexplained disappearance to the murders, though I doubt it, given her (later) tendency to deny or overlook Michael's worst aspects.
You can explain Tom's reaction to Kay by imagining what happened right after the murder. Police called to the scene would have made a connection between the shootings and McCluskey breaking Michael's jaw (he did it in public, in front of a bunch of cops, at least some of whom would be at the restaurant to help track down the murderer of their boss). They'd have circulated a description, photo or drawing of Michael, and at that point, at least some of the witnesses would have helped them. But when they came looking for Michael at the Mall, Tom would have met them and told them that Michael had departed for parts unknown before the shooting. The police may even have put out an APB on Michael, or gotten a judge to issue a bench warrant for his arrest.
So, when Kay arrived with a letter for Michael, Tom had no idea what was in the letter--could she have said, "I know you did it but I still love you?" He didn't know if she was pissed at Michael for dumping her without explanation, and may have been working with the cops to set up Tom. She might have been wearing a wire, or could have been watched by the cops. So, his safest course of action--the only one, really--was to refuse to accept the letter.

But I do believe in the novel, (I know these threads are about the movie) Mamma Corleone scolds Tom, accepts the letter herself, and shows hospitality to Kay.

Puzo answers that himself (in the novel)... women can afford to be foolish, men can't.

Remember what Sonny tells Michael: "I'll get a message to that girlfriend when I think the time is right." Well, I suppose the time turned out to be right and that's what prompted Kay to eventually drive to the mall. As she said to Tom, I've tried calling. So, she knew that Mike had left unexpectedly and, unless she's a real dunce, she could have figured out that his disappearance had an illegal tinge to it even if she wasn't aware of the murders.

Since Mama took the letter, is it possible that the Feds got to her and she became an informer, even the "drapes" lady?

Kay also felt that was Mama's way of telling her that Michael was indeed the killer.

Also in the novel, the police show up at Kay's house, looking for Michael and questioning her about his whereabouts, sure that he has been in touch with her or told her where he was going. When she says that she doesn't know, and wouldn't tell if she did, they threaten to tell her parents that she and Michael were sleeping together (rather frowned upon in the 1940's).

If the police suspected Kay of knowing Michael's whereabouts and went so far as to travel to New Hampshire to check her out, Tom's course of action was the wisest one, for Michael's safety.

Kay undoubtedly had read about the Sollozzo incident. We can see from that Vito wanted to clear Micheal's 'false' accusations, that Micheal must have been said to be the murder. And later Kay asked Mike 'Is it true', at the end of the film. We can see Kay found it hard to believe Micheal had killed anyone,either in the Sollozzo incident or the Great Massacre.