Donna G. Faircloth, f.k.a. Donna G. Murray - Page 3

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               The issue for decision is whether, under section 6015(g),              
          petitioner is entitled to a credit or refund by virtue of having            
          been granted relief from joint liability under section 6015(c)              
          for taxable years 1995 and 1996.2                                           
               Some of the facts were stipulated.  Those facts, with the              
          annexed exhibits, are so found and are made part hereof.                    
          Petitioner’s legal residence at the time the petition was filed             
          was Perry, Florida.                                                         
               The relevant facts in this case are not in dispute.  On a              
          joint Federal income tax return for 1995, petitioner and her                
          husband, Rory A. Murray, claimed a refund of $2,060.  That refund           
          was based on excess withholdings and a $1,091 earned income                 
          credit.  They failed to report as income taxable wages of $564              
          and nonemployee compensation of $7,593 earned by Mr. Murray.  On            
          September 30, 1997, a notice of deficiency for the taxable year             
          1995 was issued to petitioner and her husband that adjusted their           
          income to include the two items of unreported income.  As a                 
          result of this additional income, the earned income credit was              
          not allowable due to the limitation of section 32(a)(2).  The               
          deficiency determined in the notice of deficiency was $3,263.               



               2Sec. 6015 applies to liabilities that arose “after July 22,           
          1998, and to liabilities that arose prior to July 22, 1998, that            
          were not paid on or before July 22, 1998,” making petitioner                
          eligible for relief under sec. 6015.  Sec. 1.6015-8, Income Tax             
          Regs.                                                                       




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