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In this case, even though petitioner failed to meet all
seven of the threshold requirements, respondent did consider
other factors after petitioner appealed respondent’s initial
determination. Namely, respondent applied Rev. Proc. 2003-61,
sec. 4.02, 2003-2 C.B. at 298, which lists factors to be
considered in determining whether to grant equitable relief for
underpayment. Equitable relief under section 6015(f) for an
underpayment of tax 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.
Petitioner was divorced from her ex-spouse in 2003 and
therefore satisfies the first element. The second element is not
met under these facts because at the time the return was filed,
she knew that the income tax liability was not being paid.
Finally, as to the third element, whether the requesting spouse
will suffer economic hardship if relief is not granted,
petitioner has failed to prove that she would be unable to pay
her reasonable basic living expenses were relief denied. See
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