Phillip A. O'Bryon and Cyndie W. O'Bryon - Page 21

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          provided the taxpayer meets the requirements of section 6015(b).            
          The requirements of section 6015(b) that must be met are as                 
                    (A) a joint return has been made for a taxable                    
                    (B) on such return there is an understatement of                  
               tax attributable to erroneous items of 1 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, * * *                                                        
               Thus, as pertinent here, Cyndie would not be relieved from             
          joint and several liability under section 6015(b) to the extent             
          she had actual knowledge, or reason to know, that there was                 
          income from Phillip's Ponzi scheme that was omitted from the                
          1992, 1993, and 1994 joint returns.  Where relief is requested              
          with respect to the omission of income (the situation involved              
          herein), this Court has concluded that, where a spouse seeking              
          relief has actual knowledge of the underlying transaction that              
          produced the omitted income, section 6015 relief is denied.  See            

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