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any particular case, and the Commissioner will consider and weigh
all relevant factors regardless of whether or not the factor is
listed in Rev. Proc. 2003-61, sec. 4.03.
Rev. Proc. 2003-61, sec. 4.03(2)(a), provides the following
factors that may be relevant to whether the Commissioner will
grant equitable relief: (1) Marital status, (2) economic
hardship, (3) knowledge or reason to know of the item giving rise
to the deficiency, (4) the nonrequesting spouse’s legal
obligation, (5) significant benefit, (6) compliance with income
tax laws, (7) abuse, and (8) mental or physical health.
1. Marital Status
On July 27, 2000, the Superior Court of Arizona entered a
Decree of Dissolution finalizing the divorce between petitioner
and Ms. Valentine. This factor weighs in favor of granting
relief.
2. Economic Hardship
Economic hardship applies if satisfaction of the tax
liability in whole or in part “will cause an individual taxpayer
to be unable to pay his or her reasonable basic living expenses.
The determination of a reasonable amount for basic living
expenses will be made by the director and will vary according to
the unique circumstances of the individual taxpayer.” Rev. Proc.
2003-61, sec. 4.03(2)(a)(ii); sec. 301.6343-1(b)(4)(i),
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Last modified: May 25, 2011