- 16 -
Tax Regs., 66 Fed. Reg. 3888 (Jan. 17, 2001). To date, no final
regulations have been issued.
2. Actual Knowledge
If the Commissioner demonstrates that an individual making
the election under section 6015(c) had “actual knowledge”, at the
time such individual signed the return, of any item giving rise
to a deficiency (or portion thereof) which is not allocable to
such individual under section 6015(d), the election under section
6015(c) will not apply to such deficiency (or portion). Sec.
6015(c)(3)(C). In the context of omitted income, the
Commissioner must show that the electing spouse had an “actual
and clear awareness of the omitted income.” Cheshire v.
Commissioner, 115 T.C. 183, 195 (2000). In the context of a
disallowed deduction, the Commissioner must show that the
electing spouse had “actual knowledge of the factual
circumstances which made the item unallowable as a deduction.”
King v. Commissioner, 116 T.C. 198, 204 (2001). In either
context, actual knowledge on the part of the electing spouse as
8(...continued)
joint return, (2) one or both spouses commit fraud, (3) erroneous
items of income are present, and (4) erroneous deduction items
are present. Sec. 1.6015-3(d)(2)(i)-(iv), Proposed Income Tax
Regs., supra. With respect to situations involving omitted
income and erroneous deduction items, the proposed regulations
provide language similar to that contained in the legislative
history. Sec. 1.6015-3(d)(2)(iii), (iv), Proposed Income Tax
Regs., supra. The proposed regulations omit Congress’s reference
to the equitable reallocation of an item where the electing
spouse did not know, or have reason to know, of an item.
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011