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Petitioner must meet all of the requirements of the innocent
spouse provision to qualify for relief, as Congress framed the
statute in the conjunctive. Rule 142(a); Hayman v. Commissioner,
supra at 1260. Furthermore, petitioner must prove all of the
elements of the innocent spouse test by a preponderance of the
evidence. Rule 142(a); Friedman v. Commissioner, 53 F.3d 523,
528 (2d Cir. 1995), affg. in part, revg. in part and remanding
T.C. Memo. 1993-549. Respondent concedes that petitioner
satisfies the section 6013(e)(1)(A), section 6013(e)(3), and
section 6013(e)(4) elements of the innocent spouse requirements
for the relevant year. (Section 6013(e)(3) states the numerical
prerequisite to determine if a substantial understatement exists.
Section 6013(e)(4) concerns whether such understatements exceed a
specified percentage of the putative innocent spouse's income.)
Three elements of the innocent spouse requirement remain in
dispute: (1) Whether the understatement was attributable to
grossly erroneous items of petitioner's husband alone; (2)
whether petitioner possessed the knowledge referred to in
subparagraph (C); and (3) whether under the facts of this case
there exists the type of inequity referred to in subparagraph
(D). In reaching our conclusion as to Mrs. Meyer's liability,
guidelines provided by recent decisions of the U.S. Court of
Appeals for the Second Circuit (to which an appeal of this case
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