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THORNTON, J., concurring: No relief is available under
section 6015(c)(3)(C) if the Commissioner shows that the spouse
seeking relief had “actual knowledge * * * of any item giving rise
to a deficiency (or portion thereof)”. Majority op. p. 17. The
majority opinion appropriately construes this statutory language to
require, in the case of omitted income, “actual and clear awareness
of the omitted income.” Thus, I believe, the majority opinion
inherently rejects respondent’s argument that actual knowledge of
an “item” means actual knowledge merely of the event or transaction
giving rise to the deficiency. This result comports with the
ameliorative purposes of section 6015(c). It is also consistent
with the statutory framework. In particular, if a spouse qualifies
under section 6015(c), the relief provided under section 6015(d) is
an allocation between spouses of the “items” giving rise to the
deficiency. In this context, “item” clearly signifies the item of
omitted income, not the underlying event or transaction.
The majority opinion harmonizes with the legislative history.
The relevant Senate and conference reports state that section
6015(c) provides no relief if the Commissioner proves that the
spouse seeking relief had “actual knowledge that an item on a
return is incorrect.” What does it mean for an “item on a return”
(as opposed to the tax treatment of such an item) to be
“incorrect”? In the context of omitted income, and in the light of
the section 61 provisions defining gross income by reference to
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