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i.e., Mr. Munsinger, unless one of the enumerated exceptions
applies, which none do.
As to the omitted wage income attributable to Mr. Munsinger,
Ms. Lewallen does satisfy the seven threshold conditions. The
inquiry then turns to whether any circumstances are present under
which relief would normally be granted. See id., sec. 4.02,
2003-2 C.B. at 298. Ms. Lewallen testified at trial that she
would not suffer economic hardship if relief were not granted,
and no special circumstances are present in this case.
Consequently, we must examine whether, taking into account
all the facts and circumstances, it is inequitable to hold Ms.
Lewallen liable for all or part of the deficiency stemming from
the omission of Mr. Munsinger’s wage income. See id., sec. 4.03,
2003-2 C.B. at 298. We hold that it is not.
Petitioners’ divorce decree is silent on the allocation of
outstanding Federal tax debts, and, as noted above, Ms. Lewallen
would not suffer economic hardship if relief were not granted.
Most importantly, however, Rev. Proc. 2003-61, sec. 4.03,
specifically states that actual knowledge by the requesting
spouse of the item giving rise to the deficiency is a strong
factor weighing against relief and may be overcome only if the
factors in favor of equitable relief are particularly compelling.
Unfortunately for Ms. Lewallen, no compelling factors present
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