- 19 -
Section 6015(d) expressly requires that the allocation of the
deficiency be proportionate to the items taken into account in
determining the deficiency; i.e., proportionate to the erroneous
items allocated to the spouse, not to the spouse’s share of
taxable income. A spouse’s taxable income is relevant for
purposes of allocating the erroneous items between the spouses
only where one spouse receives a tax benefit on the joint return
from the other spouse’s erroneous items.
B. Alternative Allocation Method
Section 6015(h) directs the Secretary to prescribe
regulations providing methods for allocation of items other than
the methods under section 6015(d)(3).5 Petitioner argues that
her liability should be limited to 15 percent of her taxable
income pursuant to section 1.6015-3(d)(6)(i) and (ii) Income Tax
Regs., which provides the following alternative method for
allocating a deficiency that arises from erroneous items that are
5Sec. 1.6015-3(d)(4)(i)(B), Income Tax Regs., requires
application of the proportionate allocation method to any portion
of the deficiency other than any portion of the deficiency (1)
attributable to erroneous items allocable to the nonrequesting
spouse of which the requesting spouse had actual knowledge, (2)
attributable to separate treatment items (as defined in sec.
1.6015-3(d)(4)(ii), Income Tax Regs.), (3) relating to the
liability of a child (as defined in sec. 1.6015-3(d)(4)(iii),
Income Tax Regs.) of the requesting spouse or nonrequesting
spouse, (4) attributable to alternative minimum tax under sec.
55, (5) attributable to accuracy-related or fraud penalties, or
(6) allocated pursuant to alternative allocation methods
authorized under sec. 1.6015-3(d)(6), Income Tax Regs.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011