6015(b), it is apparent there are significant factual differences that led to the taxpayer losing in Appeals Court. In Julie’s situation, the income simply wasn’t reported. With her limited knowledge of understanding of tax or financial literacy, it’d be almost impossible for her to detect income that wasn’t reported. In light of these facts, a “reasonably prudent person” standard that the Erdahl case adopted, should hold that there is very little Julie could have done to have determined income on their joint return was understated. She wasn’t the main financial expert in the family, was led to believe the CPA correctly prepared the return, nor did she have the necessary financial background. Her graduate degree in Art has no bearing on additional business or financial expertise that would have helped her spot the unreported income.

A. Unequitable to Hold Taxpayer Liable

Code Section 6015(b)(1)(D) requires a taxpayer to show that it would be unequitable to hold individual liable for the tax deficiency when petitioning for innocent spousal relief under section 6015(b). Various case law has explored this requirement and …show more content…
Thus, holding Julie responsible for such tax liability should prove inequitable because the dishonesty and concealment was committed by her spouse, and she neither took part in such wrongdoing as well nor could have known of such