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activity began. Sec. 6015(c)(3). Furthermore, relief under
section 6015(c) is not available to a taxpayer if it is shown
that the taxpayer had actual knowledge when signing the return of
any “item” giving rise to a deficiency. Sec. 6015(c)(3)(C).
As previously discussed, petitioner is divorced from
intervenor, and the divorce was finalized before she requested
relief from joint and several liability. Also, she filed a
timely Form 8857 to request relief. Therefore, the remaining
requirement petitioner is required to meet to be eligible for
relief under section 6015(c) is to prove she had no actual
knowledge of the income item leading to the underpayment.
The Court has held that petitioner not only had reason to
know of the understatement, but also she had actual knowledge of
at least part of the “item”, intervenor’s early IRA withdrawals,
giving rise to the understatement. Because petitioner had actual
knowledge of intervenor’s IRA withdrawals, she is precluded from
claiming relief under section 6015(c).
Because petitioner is not eligible for relief under section
6015(b) and (c), she falls under the equitable relief provision
of section 6015(f). Section 6015(f) provides, in part, that a
taxpayer may be relieved from joint and several liability if it
is determined that, taking into account all the facts and
circumstances, it is inequitable to hold the taxpayer liable for
the unpaid tax, and relief is not available under section 6015(b)
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Last modified: May 25, 2011