Debra Anne Banderas - Page 13

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          intent; and (7) absent enumerated exceptions, the liability from            
          which relief is sought is attributable to an item of the                    
          nonrequesting spouse.  Respondent here concedes that petitioner             
          meets these seven conditions.                                               
               Rev. Proc. 2003-61, sec. 4.02, 2003-2 C.B. at 298, then                
          gives three circumstances under which, if all are satisfied, the            
          IRS “ordinarily will grant relief” with respect to underpayments            
          on joint returns.  The first of these elements requires that, on            
          the date of the request for relief, the requesting spouse be no             
          longer married to, be legally separated from, or not have been a            
          member of the same household as the nonrequesting spouse at any             
          time during the preceding 12-month period.  Id. sec. 4.02(1)(a),            
          2003-2 C.B. at 298.  The death of Dr. Banderas in November of               
          1999 preceded petitioner’s request by more than 12 months, and              
          this element therefore raises no barrier.  The remaining two                
          elements, however, which address knowledge and economic hardship,           
          are at the crux of the instant controversy.                                 
               The second, or knowledge, element requires that:                       
               On the date the requesting spouse signed the joint                     
               return, the requesting spouse had no knowledge or                      
               reason to know that the nonrequesting spouse would not                 
               pay the income tax liability.  The requesting spouse                   
               must establish that it was reasonable for the                          
               requesting spouse to believe that the nonrequesting                    
               spouse would pay the reported income tax liability.  If                
               a requesting spouse would otherwise qualify for relief                 
               under this section, except for the fact that the                       
               requesting spouse’s lack of knowledge or reason to know                
               relates only to a portion of the unpaid income tax                     
               liability, then the requesting spouse may receive                      

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