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Petitioner’s Request For Relief
On October 19, 1998, petitioner filed Form 8857, Request for
Innocent Spouse Relief, and requested relief from joint and
several liability for the interest resulting from a “1989 Amended
Tax Return”. Petitioner asserted on Form 8857 that the erroneous
item on that return was a “One Time Tax Exclusion on the Gain of
a Home Sale” in the amount of $125,000.
On February 7, 2002, respondent sent a Notice of
Determination Concerning Your Request for Relief from Joint and
Several Liability under Section 6015 (notice of determination) to
petitioner denying her request for relief from joint and several
liability. Respondent determined that petitioner was not
eligible for relief from joint and several liability for the
unpaid interest because there was no joint liability as a result
of Apostle’s not signing the second amended joint return.
Alternatively, respondent determined that, even if Apostle were
found to be jointly and severally liable, petitioner did not
qualify for relief from joint and several liability under section
6015(b), (c), or (f) for the unpaid interest because (1) the gain
realized on the sale of the New York apartment and the unpaid
interest resulting from that gain’s treatment on the original
joint return were entirely attributable to her; (2) she had
knowledge or reason to know of the underpayment; (3) she would
not suffer economic hardship after paying the unpaid interest, as
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