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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accessible, Congress repealed section 6013(e) and enacted a new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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