Charles R. and Dru L. Haggart - Page 11

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                    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.                 
               These requirements are expressed in the conjunctive, and a             
          requesting spouse must satisfy all the requirements of section              
          6015(b)(1).  Subparagraph (C) requires that the requesting spouse           
          “did not know, and had no reason to know, that there was * * *              
          [an] understatement” of tax.  Sec. 6015(b)(1)(C).9  Mrs. Haggart            
          seeks relief from the self-employment taxes imposed as a result             
          of Mr. Haggart’s business because, according to the Form 12507,             
          Innocent Spouse Statement, she submitted to respondent, she                 
          “maintained separate employment” and “had no role in the                    
          operation or control” of Mr. Haggart’s “self-employment and                 
          business.”10  But, section 6015(b)(1)(C) requires an analysis of            

          9  As part of the RRA, supra, sec. 3201(a), 112 Stat. 734,                  
          Congress repealed sec. 6013(e) and enacted sec. 6015(b).  The               
          language of sec. 6015(b)(1)(C) is similar to the language in                
          former sec. 6013(e)(1)(C).  Both provisions require that the                
          requesting spouse “did not know, and had no reason to know” that            
          there was an understatement of tax.  H. Conf. Rept. 105-599,                
          supra at 249, 1998-3 C.B. at 1003.  Accordingly, the case law               
          interpreting the language under sec. 6013(e) will be applied in             
          interpreting the same language under sec. 6015(b).  Butler v.               
          Commissioner, 114 T.C. 276, 283 (2000).                                     
          10  It is important to note that Mrs. Haggart’s position as to              
          whether she understood Mr. Haggart to be self-employed or an                
          employee of Roman is inconsistent.  On Form 12507, Innocent                 
          Spouse Statement, and the petition filed with this Court, she               
          indicated that Mr. Haggart was self-employed.  At trial, however,           
          she testified that she understood Mr. Haggart was an employee of            
          Roman because he got “a paycheck every two weeks * * *.  He just            
          went from one job, and I always thought he was an employee.”  In            
          any event, Mrs. Haggart’s belief as to Mr. Haggart’s employment             
          classification has no bearing on our analysis of sec. 6015(b).              

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