David Bruce Billings - Page 43

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          law.  The Commissioner “determines that there is a deficiency” in           
          a document known as a “notice of deficiency” that the                       
          Commissioner sends or issues to the taxpayer.  See sec. 6212(a).            
          An “assessment” is the procedure by which the Commissioner                  
          officially records a tax liability.  See sec. 6203.  However,               
          there are limitations on the authority of the Commissioner to               
          assess a “deficiency” that the Commissioner has “determined”.               
          See, e.g., secs. 6213, 6215.  An “assessment” by the Commissioner           
          is required before the Commissioner may proceed to collect a tax            
          liability.  See sec. 6502.                                                  

               examined. * * * Congress did not intend that taxpayers                 
               be prohibited from seeking innocent spouse relief until                
               after an assessment has been made; Congress intended                   
               the proper time to raise and have the IRS consider a                   
               claim to be at the same point where a deficiency is                    
               being considered and asserted by the IRS.  This is the                 
               least disruptive for both the taxpayer and the IRS                     
               since it allows both to focus on the innocent spouse                   
               issue while also focusing on the items that might cause                
               a deficiency. * * * The bill clarifies the intended                    
               time by permitting the election under [section 6015]                   
               (b) and (c) to be made at any point after a deficiency                 
               has been asserted by the IRS.  A deficiency is                         
               considered to have been asserted by the IRS at the time                
               the IRS states that additional taxes may be owed.  Most                
               commonly, this occurs during the Examination process.                  
               It does not require an assessment to have been made,                   
               nor does it require the exhaustion of administrative                   
               remedies in order for a taxpayer to be permitted to                    
               request innocent spouse relief.                                        
          H. Conf. Rept. 106-1033, at 1022-1023 (2000), 2000-3 C.B. 304,              

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