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petitioner had actual knowledge of the items giving rise to the
deficiencies in this case. Consequently, respondent concedes
that petitioner is entitled to section 6015(c) relief.
Section 6015(d) allocates a deficiency between a taxpayer
entitled to section 6015(c) relief and the other individual
filing the joint return. The general rule for the allocation of
the deficiency provides that:
The portion of any deficiency on a joint return
allocated to an individual shall be the amount which
bears the same ratio to such deficiency as the net
amount of items taken into account in computing the
deficiency and allocable to the individual under
paragraph (3) bears to the net amount of all items
taken into account in computing the deficiency.
Sec. 6015(d)(1). An item giving rise to a deficiency generally
is “allocated to individuals filing the return in the same manner
as it would have been allocated if the individuals had filed
separate returns for the taxable year.” Sec. 6015(d)(3)(A).
However, items giving rise to a deficiency that are otherwise
allocable to one individual must be allocated to the other
individual if she received a “tax benefit” from the items on the
joint return. Sec. 6015(d)(3)(B).
Respondent argues that the items giving rise to the
deficiencies in this case are allocable equally to petitioner and
Mr. Barnes. Petitioner argues that the items are allocable
solely to Mr. Barnes. Because we have found that petitioner and
Mr. Barnes were both investors in the partnership, as discussed
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