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general conditions a requesting spouse must meet in order to be
eligible for subsection (f) relief. One of these is the absence
of fraudulent transfers of assets between the spouses. As we
have already found, the Chens transferred assets back and forth
between Mrs. Chen, Mr. Chen, and PCTI in order to hide the trail
of fraud, and this enabled Mrs. Chen to give $50,000 to Mr. Chen
to cover some of his gambling losses. Moreover, Mrs. Chen
admitted that she acted with fraudulent intent. This means that
the Commissioner did not abuse his discretion in concluding that
she did not qualify for (f) relief.6
III. Amount of Deficiency
The only remaining issue is the amount of the deficiency,
which the Chens argue should not reflect the full amount of the
4(...continued)
subsection (f) relief stems from the existence of an assertion of
a deficiency in this case. Compare Commissioner v. Ewing, 439
F.3d 1009 (9th Cir. 2006) (no Tax Court jurisdiction when no
deficiency involved), revg. 122 T.C. 32 (2004) with Butler v.
Commissioner, 114 T.C. 276, 288 (2000) (Tax Court does have
jurisdiction when 6015(f) relief is sought as defense to
deficiency).
5 This new revenue procedure replaced Revenue Procedure
2000-15, 2000-1 C.B. 447, and became effective on November 1,
2003, for all pending or subsequently filed requests for relief.
The principal change in the new IRS guidance is revision of the
weight given to the knowledge factor. See Baumann v.
Commissioner, T.C. Memo. 2005-31.
6 The standard of review we apply differs between section
6015(b) and (f) cases. In section 6015(f) cases, we review the
Commissioner’s denial of relief for abuse of discretion. Butler
v. Commissioner, 114 T.C. 276, 292 (2000).
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