education and no formal training in finance or accounting.
She also argues that, during the years in issue, she had
limited involvement in the financial affairs of the family
and that she and her husband made "no unusually lavish
expenditures * * * when compared to their past levels
of income, standard of living and spending pattern."
Petitioner emphasizes that she was not involved in any way
in her husband's illegal activities, and she notes that the
Government's investigation of her husband did not implicate
her in any illegal activity. Finally, she argues that the
testimony of Mr. Michael Madgin, a Government informant, is
incredible and should be disregarded.
We find that petitioner did not meet her burden of
proving that she did not know, and had no reason to know,
that there was a substantial understatement of tax on her
joint returns for 1985 and 1986. There is ample evidence
from which we infer that petitioner knew of Mr. DiMichele's
illegal drug business and, hence, knew or should have
known of the substantial understatements of tax in 1985 and
1986, which were attributable to the unreported income from
that business. The record shows that Mr. DiMichele
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