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(b) Procedures for Relief From Liability Applicable to All
Joint Filers.--
(1) In general.--Under procedures prescribed by the
Secretary, if--
(A) a joint return has been made for a taxable
year;
(B) on such return there is an understatement of
tax attributable to erroneous items of 1 individual
filing the joint return;
(C) the other individual filing the joint return
establishes that in signing the return he or she did
not know, and had no reason to know, that there was
such understatement;
(D) taking into account all the facts and
circumstances, it is inequitable to hold the other
individual liable for the deficiency in tax for such
taxable year attributable to such understatement; and
(E) the other individual elects (in such form as
the Secretary may prescribe) the benefits of this
subsection not later than the date which is 2 years
after the date the Secretary has begun collection
activities with respect to the individual making the
election,
then the other individual shall be relieved of liability for
tax (including interest, penalties, and other amounts) for
such taxable year to the extent such liability is
attributable to such understatement.
(2) Apportionment of relief.--If an individual who, but
for paragraph (1)(C), would be relieved of liability under
paragraph (1), establishes that in signing the return such
individual did not know, and had no reason to know, the
extent of such understatement, then such individual shall be
relieved of liability for tax (including interest,
penalties, and other amounts) for such taxable year to the
extent that such liability is attributable to the portion of
such understatement of which such individual did not know
and had no reason to know.
(3) Understatement.--For purposes of this subsection,
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Last modified: May 25, 2011