PUBLIC LAW 105-206—JULY 22, 1998 112 STAT. 735 "(1) an individual who has made a joint return may elect to seek relief under the procedures prescribed under subsection (b); and "(2) if such individual is eligible to elect the application of subsection (c), such individual may, in addition to any election under paragraph (1), elect to limit such individual's liability for any deficiency with respect to such joint return in the manner prescribed under subsection (c). Any determination under this section shall be made without regard to community property laws. " (b) PROCEDURES FOR RELIEF FROM LIABILITY APPLICABLE TO ALL JOINT FILERS. — "(1) IN GENERAL. — Under procedures prescribed by the Secretary, if— "(A) a joint return has been made for a taxable year; "(B) on such return there is an understatement of tax attributable to erroneous items of one individual filing the joint return; "(C) the other individual filing the joint return establishes that in signing the return he or she did not know, and had no reason to know, that there was such understatement; "(D) taking into account all the facts and circumstances, it is inequitable to hold the other individual liable for the deficiency in tax for such taxable year attributable to such understatement; and i,, "(E) the other individual elects (in such form as the Deadline. Secretary may prescribe) the benefits of this subsection not later than the date which is 2 years after the date the Secretary has begun collection activities with respect to the individual making the election, then the other individual shall be relieved of liability for tax (including interest, penalties, and other amounts) for such taxable year to the extent such liability is attributable to such understatement. "(2) APPORTIONMENT OF RELIEF.—I f an individual who, but for paragraph (1)(C), would be relieved of liability under paragraph (1), establishes that in signing the return such individual did not know, and had no reason to know, the extent of such understatement, then such individual shall be relieved of liability for tax (including interest, penalties, and other amounts) for such taxable year to the extent that such liability is attributable to the portion of such understatement of which such individual did not know and had no reason to know. " (3) UNDERSTATEMENT. —For purposes of this subsection, the term ^understatement' has the meaning given to such term by section 6662(d)(2)(A). "(c) PROCEDURES TO LIMIT LIABILITY FOR TAXPAYERS NO LONGER MARRIED OR TAXPAYERS LEGALLY SEPARATED OR NOT LIVING TOGETHER. — "(1) IN GENERAL. —Except as provided in this subsection, if an individual who has made a joint return for any taxable year elects the application of this subsection, the individual's liability for any deficiency which is assessed with respect to the return shall not exceed the portion of such deficiency properly allocable to the individual under subsection (d).
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