-15-
be legally separated from, the individual with whom he or she
filed the joint return and must have elected the applicability of
section 6015(c) not later than 2 years after the date on which
collection activity began. See sec. 6015(c)(3).
An electing spouse bears the burden of proving how much of
any deficiency is allocable to him or her. See sec. 6015(c)(2).
An election is not valid if respondent shows that the individual
making the election had actual knowledge when signing the return
of any “item” giving rise to a deficiency (or portion thereof)
which is not allocable to the electing individual. See sec.
6015(c)(3)(C). The only Medi-Task item causing a deficiency in
this case is omitted income.
We have concluded that Charlton should have known of the
omitted income because he knew of and had access to correct
information about Medi-Task. See par. C-2, above. However, that
does not mean that he actually knew of the Medi-Task omitted
income. Charlton did not check Medi-Task’s bank records against
the lists of Medi-Task revenue that Hawthorne prepared and gave
him. The lists Hawthorne gave Charlton are not in the record.
Charlton testified that he did not know of the omitted income.
We have no reason not to believe him. We conclude that
respondent has not shown that Charlton had actual knowledge of
the item causing the deficiency, and that Charlton qualifies for
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