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a requesting spouse needs to satisfy the following five elements
of section 6015(b)(1):
(A) a joint return has been made for a taxable
year;
(B) on such return there is an understatement of
tax attributable to erroneous items of 1 individual
filing the joint return;
(C) the other individual filing the joint return
establishes that in signing the return he or she did
not know, and had no reason to know, that there was
such understatement;
(D) taking into account all the facts and
circumstances, it is inequitable to hold the other
individual liable for the deficiency in tax for such
taxable year attributable to such understatement; and
(E) the other individual [timely] elects (in such
form as the Secretary may prescribe) the benefits of
this subsection * * *.
The requesting spouse’s failure to meet any one of these
requirements prevents him or her from qualifying for
full/apportioned relief. Alt v. Commissioner, supra at 313.
Respondent focuses on subparagraphs (C) and (D) of section
6015(b)(1) and argues that petitioner meets neither of these
requirements. We consider only the first of these two
subparagraphs in that we agree with respondent that it has not
been met. As to that first subparagraph, subparagraph (C), the
Court of Appeals for the Ninth Circuit, the court to which an
appeal of this case lies, has held that a spouse such as
petitioner has “reason to know” of an understatement if a
reasonably prudent taxpayer in her position when she signed the
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Last modified: May 25, 2011