David C. Jonson and Estate of Barbara J. Jonson, Deceased - Page 3

                                        - 3 -                                         
                    Tax Year Ending                    Sec. 6659                      
                   Dec. 31              Deficiency     Addition                       
                    1981                $32,998         $9,862                        
                    1982             33,504         10,038                            
               On account of concessions made by the parties (which we                
          accept),2 the sole issue for our decision is whether Barbara is             
          relieved of any liability for tax pursuant to the provisions of             
          section 6015.3                                                              
               Unless otherwise noted, all section references are to the              
          Internal Revenue Code in effect for the years at issue, and Rule            

               2  Petitioners have conceded the underlying deficiencies;              
          respondent has conceded that there are no additions to tax; and             
          petitioners have conceded that the deficiencies constitute                  
          substantial underpayments attributable to tax-motivated                     
          transactions for purposes of computing deficiency interest under            
          sec. 6621(c).                                                               
               3  By amendment to petition filed Jan. 6, 1994, the Jonsons            
          raised the affirmative defense that Barbara should be relieved of           
          liability as a so-called innocent spouse under sec. 6013(e).  In            
          1998, sec. 6013(e) was repealed and replaced with sec. 6015.                
          Internal Revenue Service Restructuring and Reform Act of 1998               
          (RRA 1998), Pub. L. 105-206, sec. 3201, 112 Stat. 685, 734.  The            
          RRA 1998 generally revised and expanded the relief available to             
          joint filers.  Moreover, the RRA 1998 gave sec. 6015 retroactive            
          effect in that it was made applicable to any liability for tax              
          arising after July 22, 1998, and to any liability for tax arising           
          on or before such date that remained unpaid as of July 22, 1998.            
          RRA 1998 sec. 3201(g)(1), 112 Stat. 740; Corson v. Commissioner,            
          114 T.C. 354, 359 (2000).  Sec. 6015 is thus the proper section             
          under which petitioners should be claiming relief for Barbara.              
          Petitioners, however, did not amend the petition to claim relief            
          from liability under sec. 6015 (rather than sec. 6013(e)).                  
          Nevertheless, the trial of this case proceeded on the basis that            
          Barbara’s claim was for relief under sec. 6015 rather than for              
          relief under sec. 6013(e).  We shall treat that claim as if it              
          had been made in the pleadings.  See Rule 41(b)(1).                         

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