- 16 -
petitioner husband’s 1990 understatement should be reduced by
$65,000.
We also conclude that respondent’s determination of
petitioners’ 1990 understatement should be reduced by the $7,523
in settlement proceeds that petitioners and Itesha received from
their automobile accident.8
Petitioner Wife’s Innocent Spouse Claim
In her original petition, petitioner wife sought innocent
spouse relief under former section 6013(e). On May 21, 1998, a
trial was held in this case. On July 22, 1998, section 6015 was
enacted, replacing former section 6013(e), which was repealed
generally as of the same date. See Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206, sec.
3201(a), (e)(1), 112 Stat. 734. On August 3 and 18, 1998,
petitioner wife filed administrative elections pursuant to
section 6015(b) and (c), respectively. On January 13, 1999,
respondent notified petitioner wife that she is entitled to
relief pursuant to section 6015(c) and mailed her a proposed
8 The 1990 criminal net worth analysis did in fact reflect
an offset of $6,856 for petitioners’ settlement of their own (but
not Itesha’s) injury claims from the automobile accident.
Respondent has offered no satisfactory explanation why he
departed from this approach in failing to include any offset in
the civil net worth analysis. Furthermore, in light of the fact
that the entire $7,523 of settlement proceeds appears to have
been included in petitioners’ assets in both the criminal and
civil net worth computations, it is appropriate to include an
offset for the entire amount.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011