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election will not apply to the extent any deficiency is
attributable to such item”).
As we have held, the relevant statutory language of section
6015(c)(3)(C) (namely, “If the Secretary demonstrates * * *
actual knowledge”) constitutes an intended shift of the burden of
proof from the electing spouse to respondent with regard to
whether the spouse had actual knowledge of the item in question.
We also hold that the quantity or level of respondent’s burden is
a “preponderance” of the evidence, the traditional quantity or
level of proof required under Rule 142(a) and the case law
thereunder. This is the same standard to which we and other
courts have, for many years, held taxpayers on questions of
general tax liability, and we believe that this is the standard
that Congress intended be placed on respondent under section
6015(c) with regard to the actual knowledge element. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933); American
Pipe & Steel Corp. v. Commissioner, 243 F.2d 125, 126-127 (9th
Cir. 1957) (“* * * [the taxpayer], having invoked the
jurisdiction of the Tax Court, entered the hearing burdened with
the duty of establishing by at least a preponderance of the
evidence that the determination made by the Commissioner was
erroneous”), affg. 25 T.C. 351 (1955); Estate of Simplot v.
Commissioner, 112 T.C. 130, 149-150 (1999).
Accordingly, in this case, Michael will qualify for relief
from joint and several liability under section 6015(c) with
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