Patti Ann Ollestad - Page 7

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               For the years at issue, neither petitioner nor Mr. Thompson            
          filed an income tax return.                                                 
               Petitioner seeks relief as an innocent spouse from the                 
          revised deficiencies determined by respondent.  Because                     
          petitioner and Mr. Thompson were nonfilers during the years at              
          issue, petitioner is not entitled to relief as an innocent spouse           
          under the provisions of section 6013(e).5                                   
               Rather, we must examine the provisions of section 66(c) to             
          determine whether petitioner qualifies for relief as an innocent            
          spouse.  The purpose of section 66(c) is to provide relief from             
          unreported community income which, pursuant to the provisions of            
          section 879(a), is more appropriately attributable to the other             
          spouse.  Lucia v. Commissioner, T.C. Memo. 1991-77, affd. without           
          published opinion 962 F.2d 14 (9th Cir. 1992).                              

          5         If a husband and wife file a joint return, sec.                   
          6013(d)(3) provides that each spouse becomes jointly and                    
          severally liable for the tax due.  A spouse, however, may be                
          relieved of such liability if he or she proves entitlement to               
          innocent spouse protection under sec. 6013(e).  Sec. 6013(e)                
          provides relief if (1) a joint tax return has been filed for the            
          year at issue, (2) there is a substantial understatement of tax             
          attributable to grossly erroneous items of the other spouse on              
          the return, (3) the innocent spouse establishes that, in signing            
          the return, he or she did not know or have reason to know of the            
          substantial understatement, and (5) under all the facts and                 
          circumstances, it would be inequitable to hold the innocent                 
          spouse liable for the deficiency in tax resulting from the                  
          substantial understatement.                                                 

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