Marianne Hopkins - Page 19

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          relief.  Indeed, under section 6015(c), either or both of the               
          individuals who filed a joint return may elect relief.19                    
               The Senate report discussing the allocation rule in section            
          6015(d)(3)(B) states:  “Items of loss or deduction are allocated            
          to a spouse only to the extent that income attributable to the              
          spouse was offset by the deduction or loss.  Any remainder is               
          allocated to the other spouse.”  S. Rept. 105-174, at 57 (1998),            
          1998-3 C.B. 537, 593.  The conference report likewise states:               
               If the deficiency arises as a result of the denial of                  
               an item of deduction * * *, the amount of the                          
               deficiency allocated to the spouse to whom the item of                 
               deduction * * * is allocated is limited to the amount                  
               of income * * * allocated to such spouse that was                      
               offset by the deduction * * *.  The remainder of the                   
               liability is allocated to the other spouse to reflect                  
               the fact that income * * * allocated to that spouse was                
               originally offset by a portion of the disallowed                       
               deduction * * *  [H. Conf. Rept. 105-599, at 252                       
               (1998), 1998-3 C.B. 747, 1006.]                                        
          See Mora v. Commissioner, 117 T.C. at 293.  The examples in the             
          Senate and conference reports illustrate the application of                 
          section 6015(d)(3)(B) and divide the liability for a deficiency             
          in proportion to the amount of income offset for each individual.           
          S. Rept. 105-174, supra at 58, 1998-3 C.B. at 594; H. Conf. Rept.           

               19The final regulations issued under sec. 6015 provide that            
          “Relief may be available to both spouses filing the joint return            
          if each spouse is eligible for and elects the application” of               
          sec. 6015(c).  Sec. 1.6015-3(a), Income Tax Regs.  However, only            
          a requesting spouse may receive relief under sec. 6015(c); a                
          spouse who does not also elect relief under sec. 6015(c) remains            
          liable for the entire amount of the deficiency.  Sec. 1.6015-               
          3(d)(1)(ii), Income Tax Regs.                                               

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