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COLVIN, J., dissenting: Section 6015(c)(3)(C) provides that
the separate liability election is not available if the
Commissioner proves that the putative innocent spouse “had actual
knowledge * * * of any item giving rise to a deficiency”. The
majority holds that in omitted income cases:
Section 6015(c)(3)(C) does not require actual knowledge
on the part of the electing spouse as to whether the
entry on the return is or is not correct. [Majority op.
pp. 19-20.]
I respectfully dissent because the majority’s construction of
section 6015(c)(3)(C) squarely conflicts with the legislative
history of section 6015(c). I also dissent because the majority
fails to discuss Charlton v. Commissioner, 114 T.C. 333 (2000), and
relies on Wiksell v. Commissioner, 215 F.3d 1335 (9th Cir. 2000)
(unpublished), affg. T.C. Memo. 1999-32, which did not present the
issue we face here.
I. The Phrase “Item Giving Rise to a Deficiency” Is Ambiguous
Section 6015(c)(3)(C) provides in pertinent part that:
[i]f the Secretary demonstrates that an individual making
an election under this subsection had actual knowledge,
at the time such individual signed the return, of any
item giving rise to a deficiency (or portion thereof)
which is not allocable to such individual under
subsection (d), such election shall not apply to such
deficiency (or portion). * * * [Emphasis added.]
Sec. 6015(c)(3)(C).
Thus, section 6015(c) relief is not available if the
Commissioner proves that the putative innocent spouse had actual
knowledge of any “item giving rise to a deficiency”. That phrase
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