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such spouse knows of the transaction that gave rise to the
understatement. E.g., Jonson v. Commissioner, 118 T.C. 106, 115
(2002).
Relief is available under section 6015(c) only with respect
to a joint tax deficiency relating to taxpayers who are divorced,
legally separated, or otherwise living apart. A taxpayer’s
election under section 6015(c) is not valid, however, upon a
showing by respondent that the taxpayer had actual knowledge of
an item giving rise to the tax deficiency. Also under section
6015(e)(3)(A)3 no credit or refund is available under section
6015(c) with respect to amounts paid. Therefore, a taxpayer who
qualifies for relief under section 6015(c) can be relieved of
liability only with respect to an unpaid liability.
Lastly, under section 6015(f) respondent is granted
discretion to award relief where relief is otherwise unavailable
under section 6015(b) or (c) if the facts and circumstances
indicate that it would be inequitable to hold the spouse seeking
relief liable for the deficiency. Respondent’s denial of
equitable relief under section 6015(f) is reviewable under an
abuse of discretion standard. See Cheshire v. Commissioner, 115
T.C. 183, 198 (2000), affd. 282 F.3d 326 (5th Cir. 2002); Butler
v. Commissioner, 114 T.C. 276, 292 (2000).
3 Sec. 6015(e)(3)(A) was redesignated in 2000 as sec.
6015(g)(3). Consolidated Appropriations Act, 2001, Pub. L.
106-554, App. G, sec. 313, 114 Stat. 2763A-641.
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Last modified: May 25, 2011