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Respondent does not dispute that Mrs. Beck meets the
requirements of section 66(c)(1) and (2). Respondent contends,
however, that she fails to meet the requirements of section
66(c)(3) and (4). For the reasons discussed below, we agree with
respondent.
Mrs. Beck has failed to establish that she did not know of
the subject items of community income, within the meaning of
section 66(c)(3). Whether a taxpayer has knowledge of an item of
community income is determined by reference to knowledge of a
particular income-producing activity, rather than of the exact
amount of community income. See McGee v. Commissioner, 979 F.2d
66, 70 (5th Cir. 1992) (and cases cited therein), affg. T.C.
Memo. 1991-510; Roberts v. Commissioner, 860 F.2d 1235, 1239-1240
(5th Cir. 1988), affg. T.C. Memo. 1987-391. Here, Mrs. Beck
clearly was aware that Dr. Beck’s dental practice was an income-
producing activity. Mrs. Beck occasionally worked in Dr. Beck’s
office, often called the office to determine how much money Dr.
Beck earned on a given day, and during the last 2 years in issue
made substantial deposits of income from the dental practice into
her separate bank account and into petitioners’ joint bank
account. After Dr. Beck’s dental license was revoked, she was
actively involved in seeking to have the board dissolved, thus
demonstrating engagement in his business affairs.
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