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To qualify for relief under section 66(c), petitioner must
satisfy the following provisions: (1) She must not have filed a
joint return with Mr. Thompson for any of the years at issue; (2)
she must not have included in her gross income for any of the
years in issue an item of community income properly includable
therein which, in accordance with the rules contained in section
879(a), would be treated as the income of Mr. Thompson; (3) she
must establish that she did not know, and had no reason to know,
of the item of community income; and (4) taking into account all
facts and circumstances, it is inequitable to include such item
of community income in her gross income. Under section 66(c),
all four of the above requirements must be met before relief can
be granted. Roberts v. Commissioner, 860 F.2d 1235, 1238 (5th
Cir. 1988), affg. T.C. Memo. 1987-391.
The first requirement is satisfied since petitioner did not
file a return during the years at issue. In addition, the first
portion of the second requirement is satisfied since petitioner
did not include items of community property in her gross income
which were properly includable therein.
With respect to the second portion of section 66(c)(2),
section 879(a) attributes (1) earned income to the spouse who
performed the services and (2) trade or business income in
accordance with section 1402(a)(5). The income earned from
Trucking constitutes income derived from a trade or business.
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Last modified: May 25, 2011