Robby Goodale Gilbert - Page 9

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          does not dispute that petitioner has satisfied the seven                    
          threshold conditions.9                                                      
               Where, as here, the requesting spouse satisfies the                    
          threshold conditions, Rev. Proc. 2000-15, sec. 4.02, 2000-1 C.B.            
          at 448, lists factors to be considered in determining whether to            
          grant equitable relief for underpayments of tax.  Equitable                 
          relief under section 6015(f) for an underpayment of tax on a                
          joint return will ordinarily be granted by the Commissioner if              
          all three of the following criteria are met:  (1) The requesting            
          spouse is divorced, is legally separated, or has been physically            
          separated for 1 year from the nonrequesting spouse at the time              
          relief is requested; (2) the requesting spouse did not know or              
          have reason to know that the income tax liability would not be              
          paid at the time the joint return was signed; and (3) the                   
          requesting spouse will, absent relief, suffer economic hardship.            
               Although he was divorced from his wife at the time relief              
          was requested, petitioner was aware that the income tax liability           
          for 2001 would not be paid at the time he signed the return.  As            
          explained by him, the recent divorce settlement and Ms. Peet’s              

               9Although an underpayment of tax may be attributable to                
          income earned by the requesting spouse, Rev. Proc. 2003-61, sec.            
          4.01(7)(c), 2003-2 C.B. at 297, allows equitable relief to be               
          considered in cases, such as this one, where funds intended for             
          the payment of tax were misappropriated by the nonrequesting                
          spouse for the nonrequesting spouse’s benefit.  Because the                 
          guidelines found in Rev. Proc. 2000-15, supra, apply in the                 
          instant case, however, this provision has no bearing on the                 
          outcome of this case.                                                       

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