Craig A. Penfield - Page 7




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               the term "understatement" has the meaning given to such term           
               by section 6662(d)(2)(A).                                              
               (c) Procedures To Limit Liability for Taxpayers No Longer              
          Married or Taxpayers Legally Separated or Not Living Together.--            
                    (1) In general.--Except as provided in this subsection,           
               if an individual who has made a joint return for any taxable           
               year elects the application of this subsection, the                    
               individual's liability for any deficiency which is assessed            
               with respect to the return shall not exceed the portion of             
               such deficiency properly allocable to the individual under             
               section (d).                                                           
                    (2) Burden of proof.--Except as provided in                       
               subparagraph (A)(ii) or (C) of paragraph (3), each                     
               individual who elects the application of this subsection               
               shall have the burden of proof with respect to establishing            
               the portion of any deficiency allocable to such individual.            
                    (3) Election.--                                                   
                         (A) Individuals eligible to make election.--                 
                              (i) In general.--An individual shall only be            
                         eligible to elect the application of this                    
                         subsection if–                                               
                                   (I) at the time such election is filed,            
                              such individual is no longer married to, or             
                              is legally separated from, the individual               
                              with whom such individual filed the joint               
                              return to which the election relates; or                
          *         *         *         *         *         *         *               
                         (C) Election not valid with respect to certain               
                    deficiencies.--If the Secretary demonstrates that an              
                    individual making an election under this subsection had           
                    actual knowledge, at the time such individual signed              
                    the return, of any item giving rise to a deficiency (or           
                    portion thereof) which is not allocable to such                   
                    individual under subsection (d), such election shall              
                    not apply to such deficiency (or portion). This                   
                    subparagraph shall not apply where the individual with            
                    actual knowledge establishes that such individual                 
                    signed the return under duress.                                   






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