Wendlyn H. Albin - Page 7

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          a requesting spouse needs to satisfy the following five elements            
          of section 6015(b)(1):                                                      
                    (A) a joint return has been made for a taxable                    
               year;                                                                  
                    (B) on such return there is an understatement of                  
               tax attributable to erroneous items of 1 individual                    
               filing the joint return;                                               
                    (C) the other individual filing the joint return                  
               establishes that in signing the return he or she did                   
               not know, and had no reason to know, that there was                    
               such understatement;                                                   
                    (D) taking into account all the facts and                         
               circumstances, it is inequitable to hold the other                     
               individual liable for the deficiency in tax for such                   
               taxable year attributable to such understatement; and                  
                    (E) the other individual [timely] elects (in such                 
               form as the Secretary may prescribe) the benefits of                   
               this subsection * * *.                                                 
          The requesting spouse’s failure to meet any one of these                    
          requirements prevents him or her from qualifying for                        
          full/apportioned relief.  Alt v. Commissioner, supra at 313.                
               Respondent focuses on subparagraphs (C) and (D) of section             
          6015(b)(1) and argues that petitioner meets neither of these                
          requirements.  We consider only the first of these two                      
          subparagraphs in that we agree with respondent that it has not              
          been met.  As to that first subparagraph, subparagraph (C), the             
          Court of Appeals for the Ninth Circuit, the court to which an               
          appeal of this case lies, has held that a spouse such as                    
          petitioner has “reason to know” of an understatement if a                   
          reasonably prudent taxpayer in her position when she signed the             





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