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II. Statutory Context and Legislative History Make Section
6015(c) Clear
A. Section 6015(c) Compared to Former Section 6013(e)(1)(C)
In an unreported income case, a taxpayer failed to qualify for
innocent spouse relief under former section 6013(e)(1)(C) if the
taxpayer had knowledge of the transaction which led to the
understatement. See Reser v. Commissioner, 112 F.3d 1258, 1267
(5th Cir. 1997). The instant case is also an unreported income
case, and respondent contends we should apply the same standard
here. See majority op. at 18.
Congress enacted sweeping changes to the innocent spouse
provisions in 1998. In addition to liberalizing section
6013(e)(1)(C) in new section 6015(b), Congress also provided two
additional forms of innocent spouse relief: the separate liability
election (section 6015(c)) and authority for the Secretary to grant
relief on equitable grounds (section 6015(f)). Congress also
enacted a different knowledge requirement in section 6015(c)(3)(C)
than had applied in former section 6013(e)(1)(C). First, section
1(...continued)
similar items;
(2) Gross income derived from business;
As an example of the latter, sec. 57(a) refers to various “items
of tax preference”, all of which are defined by reference to tax
consequences. Thus, the phrase “item giving rise to a
deficiency” in sec. 6015(c)(3)(C), actual knowledge of which
causes a putative innocent spouse to fail to qualify under sec.
6015(c), is reasonably subject to more than one interpretation.
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