Francine Edwards - Page 8




                                        - 7 -                                         
               Therefore, the Court has no basis for limiting petitioner’s            
          liability to “50 percent” as she requests.  This is especially              
          true in the light of the fact that petitioner does not qualify              
          for innocent spouse relief in her own right since she admits to             
          receiving and failing to report the items of income.  Petitioner            
          does not qualify for relief under section 6015(b) because she               
          cannot establish that she did not know or had no reason to know             
          that there was an understatement of tax when she signed the                 
          return.  See sec. 6015(b)(1) and (2).  Because the items giving             
          rise to the deficiency were directly allocable to petitioner,               
          section 6015(c) does not provide any avenue for relief.  See also           
          sec. 1.6015-3(d)(2)(iii), Income Tax Regs. (stating that                    
          erroneous items of income are allocated to the spouse who was the           
          source of the income).  Finally, it is not inequitable to hold              
          petitioner liable for the deficiency since she fails one of the             
          threshold conditions for relief; i.e., “The income tax liability            
          from which the requesting spouse seeks relief is attributable to            
          an item of the * * * [other spouse]”.  Rev. Proc. 2003-61, sec.             
          4.01(7), 2003-2 C.B. 296, 297; see also id. sec.                            
          4.03(2)(a)(iii)(B), 2003-2 C.B. at 298 (stating that actual                 
          knowledge of the item giving rise to the deficiency weighs                  












Page:  Previous  1  2  3  4  5  6  7  8  9  Next 

Last modified: March 27, 2008