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In the prior proceeding, petitioner and Mr. Pacheco were
represented by Arthur Leiba (Mr. Leiba). Mr. Leiba submitted a
statement in lieu of testimony at trial, admitting that before
the death of Mr. Pacheco, he was “generally aware of innocent
spouse relief, but not specific provisions. To the best of my
knowledge and recollection, if * * * [petitioner] benefitted from
the tax returns, she couldn’t take advantage of it.”
Before the death of Mr. Pacheco, relief under subsection (c)
was not yet available to petitioner. Nevertheless, petitioner
could have raised relief under subsections (b) and (f), but her
counsel, in his judgment, decided not to do so.
Upon the death of Mr. Pacheco on May 22, 2000, however,
petitioner became eligible to elect relief under subsection (c).
At the time, the prior proceeding was still pending.
The proper time to elect relief under section 6015 is at any
point after a deficiency has been asserted by the IRS. See
Vetrano v. Commissioner, supra at 279. “‘This is the least
disruptive for both the taxpayer and the IRS since it allows both
to focus on the innocent spouse issue while also focusing on the
items that might cause a deficiency.’” Id. (quoting H. Conf.
Rept. 106-1033, at 1023 (2000)). It also permits every issue,
including the innocent spouse issue, to be resolved in a single
administrative and judicial process. Id.
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