Elsie R. Garza - Page 11

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          1998, Mr. Garza continued to annually receive renewal income when           
          customers renewed life insurance policies he had sold them.  For            
          these reasons, petitioner is not entitled to relief under section           
               Section 6015(c) affords proportionate relief to the                    
          requesting spouse through allocation of the tax items to the                
          responsible party.  Generally, this avenue of relief allows a               
          spouse to elect to be treated as if a separate return had been              
          filed.  Rowe v. Commissioner, T.C. Memo. 2001-325.  To be                   
          eligible for relief under section 6015(c), the requesting spouse            
          must no longer be married to, be legally separated from, or have            
          lived at least 12 months apart from the individual with whom the            
          tax return was filed.  Sec. 6015(c)(3)(A)(i).  Relief under                 
          section 6015(c) is not available, however, to a taxpayer if it is           
          shown that the taxpayer had actual knowledge when signing the               
          return of any “item” giving rise to the deficiency.  Sec.                   
               As previously discussed, petitioner was in divorce                     
          proceedings and was legally separated from Mr. Garza in July                
          2004.  However, as noted above, petitioner not only had reason to           
          know of the understatements at the time the returns were signed,            
          but she also had actual knowledge of the items giving rise to the           
          deficiencies.  Because petitioner had actual knowledge of the               

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