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during the 12-month period ending on the date relief was
requested (first element);
(b) At the time the return was signed, the requesting
spouse had no knowledge or reason to know that the tax would
not be paid. The requesting spouse must establish that it
was reasonable for the requesting spouse to believe that the
nonrequesting spouse would pay the reported liability. If a
requesting spouse would otherwise qualify for relief under
this section, except for the fact that the requesting spouse
had no knowledge or reason to know of only a portion of the
unpaid liability, then the requesting spouse may be granted
relief only to the extent that the liability is attributable
to such portion (second element); and
(c) The requesting spouse will suffer economic hardship
if relief is not granted. For purposes of this section, the
determination of whether a requesting spouse will suffer
economic hardship will be made by the Commissioner or the
Commissioner's delegate, and will be based on rules similar
to those provided in �301.6343-1(b)(4) of the Regulations on
Procedure and Administration (third element).
Respondent concedes that petitioner satisfied the first element
because her divorce from intervenor was finalized before she
filed her petition for relief from joint and several liability.
In addition, respondent concedes that petitioner would suffer
economic hardship if she were required to pay the remaining
liability and, therefore, satisfies the third element. The
parties, however, dispute whether petitioner has satisfied the
second element, whether petitioner did not know or have reason to
know when the requesting spouse signed the return that the tax
would not be paid. Accordingly, the issue for the Court is
whether petitioner established that it was reasonable for her to
believe that intervenor would pay the reported liability. Wiest
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Last modified: May 25, 2011