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Whether it would be inequitable to hold a spouse liable for
a tax deficiency is determined by taking into account all the
facts and circumstances. Id.7 The two most often cited factors
to be considered are: (1) Whether there has been a significant
benefit to the spouse claiming relief, and (2) whether the
failure to report the correct tax liability on the joint return
results from concealment, overreaching, or any other wrongdoing
on the part of the other spouse. Alt v. Commissioner, 119 T.C.
306, 314 (2002), affd. 101 Fed. Appx. 34 (6th Cir. 2004). We
also consider factors used in determining “inequity” in the
context of section 6015(f).8 Where a refund was received, the
determinative fact is who benefited from it. Juell v.
Commissioner, T.C. Memo. 2007-219.
The record does not reveal how petitioner and Mr. Olivas
shared the loan proceeds from H&R Block (the amount of which was
based on the expected tax refund). Even if a portion of the
rapid refund loan was allocated to petitioner, we are satisfied
7“The requirement in section 6015(b)(1)(D) * * * is
virtually identical to the same requirement of former section
6013(e)(1)(D); therefore cases interpreting former section
6013(e) remain instructive to our analysis.” Doyel v.
Commissioner, T.C. Memo. 2004-35.
8Rev. Proc. 2003-61, sec. 4.03, 2003-2 C.B. 296, 298 lists
nonexclusive factors the Commissioner considers in determining
whether it is inequitable to hold the electing spouse liable for
all or part of a deficiency under sec. 6015(f).
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Last modified: March 27, 2008