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Whether it is inequitable to hold a spouse liable for a
deficiency is determined “taking into account all the facts and
circumstances”. Sec. 6015(b)(1)(D). Most often cited as
material factors to be considered are (1) whether there has been
a significant benefit to the spouse claiming relief, and
(2) whether the failure to report the correct tax liability on
the joint return results from concealment, overreaching, or any
other wrongdoing on the part of the other spouse. See, e.g.,
Hayman v. Commissioner, 992 F.2d at 1262. Normal support is not
considered a significant benefit. Id.
As noted in connection with our discussion of the
application, to Barbara, of the lack of knowledge requirement of
section 6015(b)(1)(C), it is clear that the tax savings were
immensely beneficial to both David and Barbara, in that the
savings contributed to their ability to pay for their children’s
college educations and still maintain their standard of living.
In Barbara’s own words, the tax savings enabled her and David “to
make ends meet”. Without the tax savings generated by the Vulcan
investment, David and Barbara would not have had a sufficient
cashflow to cover their family expenditures, including their
children’s educations.
It is also clear that there was no “concealment” on David’s
part. As noted supra p. 20, Barbara had access to David’s files
and to his office, and he never tried to deceive her with respect
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