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In general, section 6015(d) provides that any item giving
rise to a deficiency on a joint return shall be allocated to each
spouse as though they had filed separate returns, and the
requesting spouse shall be liable only for her proportionate
share of the deficiency that results from such allocation. Sec.
6015(d)(1), (3)(A). To the extent that the item giving rise to
the deficiency provided a tax benefit on the joint return to the
other spouse, the item shall be allocated to the other spouse in
computing his or her proportionate share of the deficiency.8
Sec. 6015(d)(3)(B); Hopkins v. Commissioner, 121 T.C. 73, 83-86
(2003).
An election under section 6015(c) is invalid, however, if
the Secretary demonstrates that the requesting spouse had actual
knowledge, when signing the return, of any item giving rise to a
deficiency that is otherwise allocable to the nonrequesting
spouse.9 Sec. 6015(c)(3)(C). In cases involving erroneous
deductions, an individual is deemed to have actual knowledge of
an item giving rise to a deficiency if she has actual knowledge
of the factual basis for the denial of the deductions. King v.
8In addition, the requesting spouse’s proportionate share of
the deficiency shall be increased by the value of any
disqualified asset transferred to her by the nonrequesting
spouse. Sec. 6015(c)(4).
9An election under sec. 6015(c) is also invalid if the
Secretary demonstrates that assets were transferred between the
individuals filing the joint return as part of a fraudulent
scheme. Sec. 6015(c)(3)(A)(ii).
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