Julian O. Von Kalinowski and Penelope J. Von Kalinowski - Page 14

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          reason to know, of the substantial understatement; and (4) under            
          the circumstances it is inequitable to hold the relief-seeking              
          spouse liable for the substantial understatement.                           
               For many taxpayers, relief under section 6013(e) was                   
          difficult to obtain.  In order to make such relief more                     
          accessible, Congress repealed section 6013(e) and enacted a new             
          provision (section 6015) in 1998 as part of the Internal Revenue            
          Service Restructuring and Reform Act of 1998, Pub. L. 105-206,              
          sec. 3201(a), 112 Stat. 734.  See H. Conf. Rept. 105-599, at 249            
          (1998).  The newly enacted section provides three avenues of                
          relief, one of which is section 6015(b)(1).  See Cheshire v.                
          Commissioner, 115 T.C. 183, 189 (2000).  While section 6015(b)(1)           
          is a modified version of former section 6013(e), none of the                
          differences are relevant to the present litigation.  Accordingly,           
          in analyzing the provisions of section 6015(b)(1) in the present            
          context, we shall make use of case law interpreting identical               
          provisions under former section 6013(e).  See Butler v.                     
          Commissioner, 114 T.C. 276, 283 (2000) (noting that cases                   
          interpreting former section 6013(e) remain instructive as to the            
          analysis of whether a taxpayer knew or had reason to know of an             
          understatement pursuant to section 6015(b)).                                
          C.   Actual or Constructive Knowledge–-Sec. 6015(b)(1)(C)                   
               Pursuant to section 6015(b)(1)(C), petitioner must establish           
          that she did not know and further had no reason to know of the              

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