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exposed to the mechanics of commodities straddle transactions.
Respondent, therefore, contends that petitioner knew that the
deductions claimed on the returns for the taxable years in issue
would give rise to substantial understatements. Nothing in the
record, however, establishes that petitioner's studies or her
work as a stockbroker exposed her to the intricacies of
commodities straddle transactions.10 Accordingly, we find that
petitioner, when she signed the returns for the taxable years in
issue, did not have actual knowledge that the deductions would
give rise to the substantial understatements.
Even if a taxpayer does not have actual knowledge that
deductions claimed on a return would give rise to a substantial
understatement, a taxpayer who has reason to know of such an
understatement is not entitled to innocent spouse relief. Sec.
6013(e)(1)(C). At the trial of the instant case, petitioner
admitted that she signed the returns for the taxable years in
issue without reviewing them. Nevertheless, she is charged with
constructive knowledge of their contents. Hayman v.
Commissioner, supra at 1262. Petitioner was educated and should
10
At trial, respondent offered the testimony of several
witnesses in an attempt to establish that the brokerage firm at
which petitioner was employed during 1980 and 1981 routinely
taught its stockbroker trainees about commodities straddle
transactions. The testimony of respondent's witnesses, however,
does not establish that petitioner received detailed instruction
concerning commodities straddle transactions as a part of her
training.
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