Cheryl McKnight - Page 19

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          Section 6015(c) Relief                                                      
               As explained, respondent concluded that petitioner qualified           
          generally for relief under section 6015(c).  Respondent, however,           
          concluded that only 50 percent of the $6,452 deficiency was                 
          attributable to John and therefore granted relief to petitioner             
          from joint liability under section 6015(c) only as to 50 percent            
          (or $3,226) of the $6,452 tax deficiency.                                   
               The entire $6,452 deficiency, however, is attributable to              
          John.  John owned all of MGI beneficially, and whatever interest            
          in MGI petitioner may have held was only as a nominee.                      
          Petitioner has established that none of the income from MGI                 
          should be attributable to her.  Further, John, not petitioner,              
          owned the Castle Rock home to which the disallowed mortgage                 
          interest deductions relate.                                                 
               Petitioner therefore qualifies under section 6015(c) for               
          relief from joint liability as to the entire $6,452 deficiency.5            

               5  Sec. 6015(g)(3), however, provides that no credit or                
          refund will be allowed as a result of sec. 6015(c) relief.                  
          Herein, the entire $6,452 deficiency has been paid, and therefore           
          petitioner is not entitled to a refund of any amounts that                  
          petitioner paid on the deficiency.  If, however, we were to hold            
          that petitioner did not qualify for relief from the deficiency              
          under sec. 6015(c), and then grant petitioner equitable relief              
          from the deficiency under sec. 6015(f), under Rev. Proc. 2003-61,           
          sec. 4.04(1), 2003-2 C.B. 296, 299, petitioner apparently still             
          would be disallowed a refund of amounts petitioner has paid on              
          the deficiency (i.e., payments petitioner made on the deficiency            
          prior to her request for sec. 6015(f) equitable relief relating             
          thereto would not be refundable).                                           

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