- 21 - On July 18, 2002, the Commissioner published final regulations under section 6015.20 Section 1.6015-3(d)(2), Income Tax Regs., of the final regulations provides in part: (2) Allocation of erroneous items. For purposes of allocating a deficiency under this section, erroneous items are generally allocated to the spouses as if separate returns were filed, subject to the following four exceptions: (i) Benefit on the return.--An erroneous item that would otherwise be allocated to the nonrequesting spouse is allocated to the requesting spouse to the extent that the requesting spouse received a tax benefit on the joint return. While the above-quoted portion of the regulations does not specifically address the situation at issue, where an erroneous item of deduction of the electing individual offsets income of the nonelecting individual, it does not purport to preclude application of section 6015(d)(3)(B) to that situation. Indeed, the final regulations provide an example which supports our application of the alternative allocation method in section 6015(d)(3)(B). In section 1.6015-3(d)(5), Example (5), Income Tax Regs., both individuals who filed a joint return elect relief under section 6015(c). The erroneous deduction is initially H’s item; however, in the example, only a portion of 20These regulations are applicable for all elections or requests for relief filed on or after July 18, 2002. Washington v. Commissioner, 120 T.C. 137, 154 n.9 (2003); sec. 1.6015-9, Income Tax Regs. Petitioner’s election was filed on May 24, 1999, before the effective date of the regulations.Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Next
Last modified: May 25, 2011