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the threshold condition that the tax liability be attributable to
an item of the nonrequesting spouse.
Although petitioner has not met the threshold requirements
for relief found in section 4.01 of the applicable guidelines, we
consider other factors to be taken into consideration when the
threshold requirements are met, because respondent, applying the
superseded guidelines, conceded that petitioner had met the
threshold conditions and denied petitioner’s claim for innocent
spouse relief on other bases.
The applicable guidelines specify, in section 4.02, three
other conditions (assuming that the threshold conditions were met,
which respondent erroneously assumed was the case) that, if met,
will normally entitle the spouse to relief. Rev. Proc. 2003-61,
sec. 4.02, 2003-2 C.B. at 298. To qualify, petitioner must show
that: (a) She is no longer married; (b) it was reasonable for her
to believe that Mr. Meadows would pay the reported tax liability;
and (c) she will suffer economic hardship if she is not granted
innocent spouse relief. Economic hardship generally means that
the individual is unable to pay reasonable basic living expenses.2
Petitioner showed that she and Mr. Meadows are divorced,
thereby satisfying the first condition. However, we cannot find
2See sec. 301.6343-1(b)(4), Proced. & Admin. Regs., referred
to in the revenue procedure in making the determination of
whether economic hardship is present.
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