Donna G. Faircloth, f.k.a. Donna G. Murray - Page 6

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          In April 2003, petitioner filed an amended return for the 2000              
          taxable year reporting, as she had for taxable years 2001 and               
          2002, that she was entitled to head-of-household filing status.             
          The amended return was accepted by the IRS, which resulted in the           
          abatement of most of the section 6651 additions to tax, the                 
          corresponding interest, and $977 of the tax assessed for the 2000           
          taxable year.  Because the liability for taxable year 2000 had              
          been paid in full by the application of refunds from taxable                
          years 2001 and 2002, there was an overpayment for the year 2000.            
          A small portion of this overpayment was applied to pay fully the            
          remainder of the 1995 joint liability, and the balance was                  
          applied to the 1996 joint liability.                                        
               On May 15, 2003, petitioner filed with the IRS a Form 8857,            
          Request for Innocent Spouse Relief, seeking relief from the 1995            
          and 1996 joint tax liabilities.  Respondent issued a notice of              
          determination granting petitioner partial relief under section              
          6015(c) of the joint 1995 and 1996 tax liabilities.3  The notice            
          also stated that refunds are not allowed with respect to relief             
          from joint liability granted under section 6015(c).                         


               3Petitioner was denied relief with respect to the 1996 tax             
          attributable to her $25 in unreported income and the recapture of           
          the earned income credit because an allocation of the latter is             
          not permitted.  Sec. 1.6015-3(d)(2)(i), Income Tax Regs.  The               
          liabilities generated from the earned income credits had been               
          paid by her overpayments from the delinquent returns, so                    
          application of sec. 6015(c) relieved petitioner of all remaining            
          unpaid balances.                                                            





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