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Relief under section 6015(c) is not available if the
Commissioner demonstrates that the requesting spouse had actual
knowledge, at the time the return was signed, of any item giving
rise to a deficiency (or portion thereof) that is not allocable
to such individual. Sec. 6015(c)(3)(C); Hopkins v. Commissioner,
121 T.C. 73, 86 (2003); Culver v. Commissioner, 116 T.C. 189, 194
(2001). Petitioner has the burden of proving which items would
not have been allocated to her if the spouses had filed separate
returns. See Mora v. Commissioner, supra at 290; Levy v.
Commissioner, T.C. Memo. 2005-92.
Both this Court and the Court of Appeals for the Fifth
Circuit have defined culpable knowledge in an omitted income
case, for purposes of section 6015(c)(3)(C), as the “actual and
clear awareness” of the item, as distinguished from mere reason
to know of the item. Cheshire v. Commissioner, supra at 337
n.26; Cook v. Commissioner, T.C. Memo. 2005-22. While the
taxpayer generally has the burden of proof, in order to preclude
relief under section 6015(c) the Commissioner must carry the
burden of demonstrating by a preponderance of the evidence that
the requesting spouse had actual knowledge of “any item giving
rise to a deficiency”. Rule 142(a)(1); Culver v. Commissioner,
supra at 196; Charlton v. Commissioner, 114 T.C. 333, 341-342
(2000); sec. 1.6015-3(c)(2)(i), Income Tax Regs. “Item” means
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Last modified: May 25, 2011