Ruthe G. Ohrman - Page 26

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               Petitioner’s use of State family law as a vehicle to lend              
          legitimacy to Mr. Ohrman’s transfer of assets and income to her             
          is the type of abuse that Congress expressly intended to stop by            
          adding paragraph (4) to section 6015(c).  While the State of                
          Oregon’s equitable distribution rules provided the mechanism for            
          the transfer of Mr. Ohrman’s assets and income to petitioner,               
          they do not negate the principal purpose for which the transfer             
          occurred, the avoidance of tax.  As discussed in detail above,              
          the separation agreement was a way for petitioner to enjoy the              
          benefits of the family assets and income without satisfying the             
          1999 tax deficiency.  Accordingly, we hold that petitioner                  
          received a transfer of disqualified assets under section                    
               The next step in the section 6015(c) analysis is to decide             
          the amount by which petitioner’s liability for the 1999 tax                 
          deficiency should be increased because of the transfer of                   
          disqualified assets.  Under section 6015(c)(4)(A), the portion of           
          the deficiency for which petitioner is liable is increased by the           
          value of the disqualified assets that were transferred to her.              
          In this case, petitioner’s portion of the 1999 tax deficiency               
          would have been zero absent the transfer of disqualified assets             
          because of her eligibility to make an election to limit her                 
          liability under section 6015(c)(3).  The value of the                       
          disqualified assets petitioner received, however, far exceeds               

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