- 41 -
all the facts and circumstances, to hold petitioner liable for
the deficiencies and additions to tax in this case.
B. Section 6015(c)
Section 6015(c) allows a taxpayer to elect that her
liability for any deficiency with respect to the joint return be
limited to the portion of such deficiency which is “properly
allocable” to her under section 6015(d). A taxpayer is not
entitled to relief under section 6015(c) with respect to any
portion of any deficiency if the Commissioner shows that the
taxpayer “had actual knowledge, at the time such individual
signed the return, of any item giving rise” to that portion of
the deficiency. Sec. 6015(c)(3)(C). In the context of a
disallowed deduction, actual knowledge is present if the taxpayer
had actual knowledge of the factual circumstances which made the
item unallowable as a deduction; knowledge of the tax
consequences resulting from the factual circumstances is not
required. King v. Commissioner, 116 T.C. 198, 204 (2001).
Respondent bears the burden of proving that the taxpayer
requesting section 6015(c) relief had the relevant actual
knowledge. Sec. 6015(c)(3)(C); King v. Commissioner, supra. In
this case, respondent denied petitioner relief pursuant to
section 6015(c) solely on the grounds that petitioner had actual
knowledge within the meaning of section 6015(c)(3)(C).
Respondent, however, conceded on brief that he has not shown
Page: Previous 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 NextLast modified: May 25, 2011