- 15 -
The 1981 return, which was filed untimely on January 31, 1983,
reported a gain of $697,896 on Schedule D that was offset by a
loss of $679,327 reported on Schedule E, which included a loss of
$413,765 from TSM Associates and a loss of $399,489 from APEX
Associates. That return reported adjusted gross income of
$90,658, and tax due of $13,980.12 Both the income and
deductions with respect to Mr. Crowley's commodities straddle
transactions reported on the 1980 and 1981 returns were larger
than the other income and deductions reported by Mr. Crowley and
petitioner. Under such circumstances, petitioner had a duty to
look into the propriety of the deductions taken on the returns in
issue, a duty she has failed to satisfy in the instant case.13
Id. Petitioner cannot obtain the benefits of section 6013(e) by
simply turning a blind eye to facts that would reasonably put her
on notice that further inquiry would need to be made. Bokum v.
Commissioner, 94 T.C. 126, 148 (1990), affd. 992 F.2d 1132 (11th
Cir. 1993). As we have previously noted, section 6013(e) is
12
During 1981, Mr. Crowley earned $148,141 in commissions from
Sinclair Securities Company.
13
Petitioner, however, contends that the tax returns for the
taxable years in issue "indicated a roll of income from prior
years to future years, leading an objective observer to conclude
that any disallowance would wipe out all income and deductions
relating to the transactions resulting in little or no net tax
effect." Such a consideration is not a substitute for the
inquiry required by the information disclosed on the returns in
issue.
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