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between spouses, unless the evidence shows that a
different allocation is appropriate. For example, a
charitable contribution normally would be allocated
equally to both spouses. However, if the wife provides
evidence that the deduction relates to the contribution
of an asset that was the sole property of the husband,
any deficiency assessed because it is later determined
that the value of the property was overstated would be
allocated to the husband.
Items of loss or deduction are allocated to a
spouse only to the extent that income attributable to
the spouse was offset by the deduction or loss. Any
remainder is allocated to the other spouse.
Income tax withholding is allocated to the spouse
from whose paycheck the tax was withheld. Estimated
tax payments are generally expected to be allocated to
the spouse who made the payments. If the payments were
made jointly, the payments are expected to be allocated
equally to each spouse, in the absence of evidence
supporting a different allocation.
The allocation of items is to be made without
regard to the community property laws of any
jurisdiction.
If the electing spouse establishes that he or she
did not know, and had no reason to know, of an item
and, considering all the facts and circumstances, it is
inequitable to hold the electing spouse responsible for
any unpaid tax or deficiency attributable to such item,
the item may be equitably reallocated to the other
spouse. In cases where the IRS proves fraud, the IRS
may distribute, apportion, or allocate any item between
spouses. [S. Rept. 105-174, supra at 56-57, 1998-3
C.B. at 592-593.]
On January 17, 2001, the Secretary issued proposed
regulations under section 6015.8 Sec. 1.6015-1, Proposed Income
8On Mar. 29, 2001, minor corrections were made to the
proposed regulations. Sec. 1.6015-1, Proposed Income Tax Regs.,
66 Fed. Reg. 17130 (Mar. 29, 2001). The proposed regulations
provide that erroneous items are generally allocated between
spouses as if separate returns are filed, subject to four
exceptions. Sec. 1.6015-3(d)(2), Proposed Income Tax Regs., 66
Fed. Reg. 3888, 3898 (Jan. 17, 2001). The exceptions cover
situations where: (1) One spouse receives a tax benefit on the
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