Gwendolyn A. Ewing - Page 54




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                    Timing of request for relief.--Confusion currently                
               exists as to the appropriate point at which a request                  
               for innocent spouse relief should be made by the                       
               taxpayer and considered by the IRS.  Some have read the                
               statute to prohibit consideration by the IRS of                        
               requests for relief until after an assessment has been                 
               made, i.e., after the examination has been concluded,                  
               and if challenged, judicially determined.  Others have                 
               read the statute to permit claims for relief from                      
               deficiencies to be made upon the filing of the return                  
               before any preliminary determination as to whether a                   
               deficiency exists or whether the return will be                        
               examined.  The consideration of innocent spouse relief                 
               requires that the IRS focus on the particular items                    
               causing a deficiency; until such items are identified,                 
               the IRS cannot consider these claims.  Congress did not                
               intend that taxpayers be prohibited from seeking                       
               innocent spouse relief until after an assessment has                   
               been made; Congress intended the proper time to raise                  
               and have the IRS consider a claim to be at the same                    
               point where a deficiency is being considered and                       
               asserted by the IRS.  This is the least disruptive for                 
               both the taxpayer and the IRS since it allows both to                  
               focus on the innocent spouse issue while also focusing                 
               on the items that might cause a deficiency.  It also                   
               permits every issue, including the innocent spouse                     
               issue, to be resolved in single administrative and                     
               judicial process.  The bill clarifies the intended time                
               by permitting the election under (b) and (c) to be made                
               at any point after a deficiency has been asserted by                   
               the IRS.  A deficiency is considered to have been                      
               asserted by the IRS at the time the IRS states that                    
               additional taxes may be owed.  Most commonly, this                     
               occurs during the Examination process.  It does not                    
               require an assessment to have been made, nor does it                   
               require the exhaustion of administrative remedies in                   
               order for a taxpayer to be permitted to request                        
               innocent spouse relief.  [H. Conf. Rept. 106-1004, at                  
               386-387 (2001); emphasis added.]                                       
               For the foregoing reasons, I dissent.                                  
               WHALEN and FOLEY, JJ., agree with this dissenting opinion.             










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