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spouse to the extent the liability is attributable to
the portion of an understatement of tax which such
spouse did not know of and had no reason to know of.
The bill specifically provides that the Tax Court
has jurisdiction to review any denial (or failure to
rule) by the Secretary regarding an application for
innocent spouse relief. * * * [Id.]
The House bill then passed to the Senate. As was true in
the case of the House committee, the Senate Committee on Finance
viewed the then-present law on relief from joint liability for
tax, interest, and penalties as “inadequate”. S. Rept. 105-174,
supra at 55, 1998-3 C.B. at 591. The Senate committee believed,
however, that an approach different from that taken by the House
was necessary to address this concern. The Senate committee
believed that “a system based on separate liabilities will
provide better protection for innocent spouses than the current
system * * *[,] that an electing spouse’s liability should be
satisfied by the payment of the tax attributable to that spouse’s
income and that an election to limit a spouse’s liability to that
amount is appropriate.” Id. at 55, 1998-3 C.B. at 591. The
Senate Committee on Finance explained in its report that the
relevant parts of the Senate amendment were as follows:
The bill modifies the innocent spouse provisions
to permit a spouse to elect to limit his or her
liability for unpaid taxes on a joint return to the
spouse’s separate liability amount. In the case of a
deficiency arising from a joint return, a spouse would
be liable only to the extent items giving rise to the
deficiency are allocable to the spouse. * * *
* * * * * * *
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