Question

Tax Audit & Notice Services: Requesting Innocent Spouse Relief (2019) Options

1	What conditions make a taxpayer ineligible for separation of liability?
a	A. Actual knowledge of the deficiency.
b	B. Transfer of assets between spouses.
c	C. Both A and B.
d	D. Neither A nor B.

Answer 1

The correct answer for the question is Option C - Both A and B. Relief under the Separation of Liability would make the taxpayer ineligible if the taxpayer had the actual knowledge of the deficiency and there is a transfer of assets between spouses. The taxpayer should not possess any knowledge of the understatment/deficiency in order to claim a righteous relief under the separation of liability rule. Additionally, there should not be any transfer of assets between spouses if there needs to be a valid claim under the Separation of liability rule.

Option A & Option B separately are incorrect . Since both these options are correct, the correct answer is Option C.

Option D is incorrect as we have the answer at Option C.

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