David Bruce Billings - Page 13




                                       - 13 -                                         
          ignorant of an understatement of tax that gives rise to a                   
          deficiency.  Indeed, the Commissioner argues here that:                     
                    Instead of filing an amended return,                              
                    [Rosalee] could have contacted respondent and                     
                    informed him of the unreported embezzlement                       
                    income.  Once informed, respondent could have                     
                    proceeded with examination procedures and                         
                    [Rosalee] could have agreed to respondent’s                       
                    determination of additional tax.                                  
                                                                                     
          Resp. Br. at 30.  This would have led to the determination of a             
          deficiency and presumably allowed David to file a successful                
          request for relief under section 6015(b).  See, e.g., Haltom v.             
          Commissioner, T.C. Memo. 2005-209 (ignorance of embezzlement                
          income).                                                                    
               It would seem a trap for the unwary--and an inefficient                
          requirement from the IRS’s perspective--to require spouses to go            
          through an audit whose outcome is preordained in a situation like           
          that faced by the widow Rosenthal or Mr. Billings, rather than              
          fess up by filing an amended return.                                        
               Tax law is of course filled with such traps and has never              
          been viewed as a garden of efficiency, but Congress itself has              
          directed the Commissioner--at least in this area--to take a                 
          somewhat more open-ended view of the law.  Section 6015(f)                  
          directs him to consider “all the facts and circumstances.”  The             
          revenue procedure likewise counsels the Commissioner’s employees            
          that, in weighing an application for relief, “No single factor              
          will be determinative of whether equitable relief will or will              







Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next 

Last modified: November 10, 2007