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Although there is, under section 6015(b)(1)(B), an
understatement of tax attributable to the erroneous items1 of “one
individual”, petitioner, “the other individual”, her deceased
husband, would be the one entitled to make the election under
section 6015(b)(1)(E), not petitioner. In addition, under
section 6015(b)(1)(C), the requesting spouse must establish that
in signing the return, he or she did not know or have reason to
know of the understatement.
Petitioner agrees that she knew that she had received the
gambling winnings and omitted interest and dividend income.
Petitioner contends, merely, that she “forgot to include the
items on her return.”
Where a spouse seeking relief has actual knowledge of the
underlying transaction that produced the omitted income, innocent
spouse relief is denied. Cheshire v. Commissioner, 115 T.C. 183,
192-193 (2000), affd. 282 F.3d 326 (5th Cir. 2002).
Since the items that were omitted were the income items of
petitioner herself, it would not be inequitable to hold her
liable for the understatement under section 6015(b)(1)(D).
The Court finds that petitioner has failed to satisfy the
requirements of section 6015(b)(1)(C), (D), and (E). Therefore,
petitioner is not entitled to relief under section 6015(b).
1See sec. 1.6015-1(h)(4), Income Tax Regs., Erroneous Item.
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Last modified: November 10, 2007