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Relief under section 6015(b) or (c) is premised on the
existence of an understatement or deficiency. Because the
liabilities at issue in this case derive from unpaid taxes
reported on the 1997 and 1999 returns, petitioner is not eligible
for relief under subsection (b) or (c). Accordingly, there is no
dispute that petitioner satisfies the criterion for equitable
relief codified in section 6015(f)(2). The instant dispute thus
centers on the facts and circumstances inquiry of section
6015(f)(1).
As directed by section 6015(f), the Secretary has
promulgated guidance to structure the relevant facts and
circumstances analysis, the applicable version of which is set
forth in Rev. Proc. 2003-61, 2003-2 C.B. 296. Rev. Proc. 2003-
61, sec. 4.01, 2003-2 C.B. at 297, first lists seven threshold
conditions that must be met before the IRS will consider a
request for relief under section 6015(f): (1) The requesting
spouse filed a joint return for the year for which relief is
sought; (2) relief is not available under section 6015(b) or (c);
(3) the application for relief is made no later than 2 years
after the date of the IRS’s first collection activity; (4) no
assets were transferred between the spouses as part of a
fraudulent scheme; (5) the nonrequesting spouse did not transfer
disqualified assets to the requesting spouse; (6) the requesting
spouse did not file or fail to file the return with fraudulent
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