Clarissa Ybarra - Page 7

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          erroneous items of the nonrequesting spouse; (3) at the time of             
          signing the return, the spouse seeking relief did not know, and             
          had no reason to know, of the understatement; (4) taking into               
          account all the facts and circumstances, it is inequitable to               
          hold the spouse seeking relief liable for the deficiency in tax             
          attributable to the understatement; and (5) the requesting spouse           
          seeks relief within 2 years of the first collection activity                
          relating to the liability.                                                  
               Respondent concedes that the first and last requirements of            
          section 6015(b)(1) (i.e., that a joint return was filed and that            
          petitioner timely requested relief) are met.  Respondent                    
          acknowledges in his pretrial memorandum that he has no evidence             
          upon which to challenge petitioner’s assertion that she did not             
          know, and had no reason to know, of Mr. Olivas’s retirement                 
          income at the time she signed the return.  And we are satisfied             
          (and thus conclude) that the aforesaid third requirement of                 
          section 6015(b)(1) is met.                                                  
               Respondent contends that petitioner has not met the second             
          requirement for relief under section 6015(b)(1); i.e., that there           
          be an understatement of tax attributable to erroneous items of              
          Mr. Olivas.  See sec. 6015(b)(1)(B).  Respondent points to the              
          fact that the understatement5 on the return resulted from                   

               5Sec. 1.6015-2(b), Income Tax Regs., provides that the term            
          “understatement” has the meaning given to that term by sec.                 

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