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1999. At the time petitioner signed the 1999 return, she knew
that Collins’s business was in financial difficulty and had been
unable to cover expenses. She also was aware that Collins
personally spent more money than he made in 1999. Petitioner
testified that, at the time she signed the 1999 return, she did
not know how Collins could afford to pay the outstanding tax
liability reported on the return. Petitioner has not shown that
it was reasonable to rely on Collins to pay the tax due for 1999.
The third criterion under section 4.02 of Rev. Proc. 2003-61
is that the requesting spouse will suffer economic hardship if
relief is not granted. Economic hardship for these purposes is
defined as the inability to pay reasonable basic living expenses
if the requesting spouse is held liable for the tax owed. See
sec. 301.6343-1(b)(4), Proced. & Admin. Regs. On the Form 12510,
she reported monthly income in excess of monthly expenses.
Petitioner has not shown that she will suffer economic hardship
if relief is not granted; thus, the third criterion is not met.
Rev. Proc. 2003-61, section 4.03, 2003-2 C.B. at 298,
provides an alternative test for equitable relief if a taxpayer
does not meet the requirements of Rev. Proc. 2003-61, section
4.02. Rev. Proc. 2003-61, section 4.03, lists several relevant
factors that the Commissioner considers and weighs in making a
determination about whether section 6015(f) relief should be
granted. Those factors include:
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Last modified: March 27, 2008