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(B) on such return there is an understatement of
tax attributable to erroneous items of one individual
filing the joint return;
(C) the other individual filing the joint return
establishes that in signing the return he or she did
not know, and had no reason to know, that there was
such understatement;
(D) taking into account all the facts and
circumstances, it is inequitable to hold the other
individual liable for the deficiency in tax for such
taxable year attributable to such understatement; and
(E) the other individual elects (in such form as
the Secretary may prescribe) the benefits of this
subsection not later than the date which is 2 years
after the date the Secretary has begun collection
activities with respect to the individual making the
election,
then the other individual shall be relieved of liability for
tax (including interest, penalties, and other amounts) for
such taxable year to the extent such liability is
attributable to such understatement.
The requirements of subparagraphs (A) through (E) are stated in
the conjunctive; that is, a taxpayer must satisfy all of them to
be entitled to relief under section 6015(b)(1). There is no
dispute in the instant case that petitioner satisfies (A) and
(E); that is, that she made a joint return with her husband and
that an appropriate election for relief has been made.
Respondent, however, contends that petitioner fails to satisfy
subparagraphs (B), (C), and (D). In accordance with Cheshire v.
Commissioner, supra, we find that she does not satisfy
subparagraph (C).
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