Court Opinion

ID: 4474057
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:10:44.088043+00
Date Added: 2024-06-11T15:04:26.593827
License: Public Domain

Thornton, J., concurring: No relief is available under section 6015(c)(3)(C) if the Commissioner shows that the spouse seeking relief had “actual knowledge * * * of ‘any item giving rise to a deficiency (or portion thereof)”’. Majority op. p. 194. The majority opinion appropriately construes this statutory language to require, in the case of omitted income, “actual and clear awareness of the omitted income.” Thus, I believe, the majority opinion inherently rejects respondent’s argument that actual knowledge of an “item” means actual knowledge merely of the event or transaction giving rise to the deficiency. This result comports with the ameliorative purposes of section 6015(c). It is also consistent with the statutory framework. In particular, if a spouse qualifies under section 6015(c), the relief provided under section 6015(d) is an allocation between spouses of the “items” giving rise to the deficiency. In this context, “item” clearly signifies the item of omitted income, not the underlying event or transaction. The majority opinion harmonizes with the legislative history. The relevant Senate and conference reports state that section 6015(c) provides no relief if the Commissioner proves that the spouse seeking relief had “actual knowledge that an item on a return is incorrect.” What does it mean for an “item on a return” (as opposed to the tax treatment of such an item) to be “incorrect”? In the context of omitted income, and in the light of the section 61 provisions defining gross income by reference to various “items”, it most likely means that gross income from a particular source, such as a pension, is incorrectly reported (by virtue of either understatement or omission) on the return. The other statements of legislative purpose cited by the dissent evince no clear consensus about any other standard of general applicability and dictate no contrary result. Here the question is whether Mrs. Cheshire had actual knowledge of the gross income from the pension that gave rise to the deficiency. Clearly she did. Whether she believed the pension proceeds distribution was nontaxable in whole or part on the ground that it was used to pay down a mortgage or under some other mistaken theory is immaterial. Whalen, Halpern, Laro, Foley, and Vasquez, JJ., agree with this .concurring opinion.