Nora Aranda - Page 6

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                         (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 of 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.                      
          Our jurisdiction to review petitioner’s claim for relief is                 
          conferred by section 6015(e), which allows a spouse who has                 
          requested relief from joint and several liability to contest the            
          Commissioner’s denial of relief by filing a timely petition in              
          this Court.                                                                 
               There is no dispute that petitioner satisfies subparagraphs            
          (A) and (E) of section 6015(b)(1).  Petitioner filed joint                  
          returns for 1985 and 1986 with Mr. Aranda, as required by section           
          6015(b)(1)(A), and made a qualifying election on Form 8857 for              
          taxable years 1985 and 1986, as required by section                         
          6015(b)(1)(E).  However, respondent contends that petitioner has            





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