- 14 -
cases interpreting former section 6013(e) remain instructive to
our analysis. Butler v. Commissioner, supra at 283.
Whether it is inequitable to hold a spouse liable for a
deficiency is determined “taking into account all the facts and
7(...continued)
Cases.--
(1) In general.--Under regulations prescribed by
the Secretary, if--
(A) a joint return has been made under this
section for a taxable year,
(B) on such return there is a substantial
understatement of tax attributable to grossly
erroneous items of one spouse,
(C) the other spouse establishes that in
signing the return he or she did not know, and had
no reason to know, that there was such substantial
understatement,
(D) taking into account all the facts and
circumstances, it is inequitable to hold the other
spouse liable for the deficiency in tax for such
taxable year attributable to such substantial
understatement,
then the other spouse shall be relieved of liability
for tax (including interest, penalties, and other
amounts) for such taxable year to the extent such
liability is attributable to such substantial
understatement.
In order to make relief from joint and several liability more
accessible, Congress repealed sec. 6013(e) and enacted a new
provision (sec. 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; H. Conf. Rept. 105-599, at 249
(1998), 1998-3 C.B. 747, 1003.
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