- 19 -
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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