the kitchen table of petitioners' home while petitioner was
present in the kitchen.
Furthermore, the DEA agents who searched petitioners'
home found cash throughout the house. They found $136,000
in the rear basement closet, an area of the house that
petitioner claimed she could not enter. However, they also
found $2,681 in the basement closet where the fur coats
were found, $2,652 in a dining room closet, along with
financial records, $23,850 in a playroom closet, and
$26,917 in the master bedroom. The agents also found
$3,015 in safe deposit box No. 301640, the box where
petitioner stored her jewelry.
Based upon the above, we find that petitioner has
failed to prove that she did not know, and had no reason
to know, of the substantial understatement of tax in 1985,
which was attributable to Mr. DiMichele's illegal drug
business. Concomitantly, we find that petitioner has also
failed to prove that she did not know, and had no reason to
know, of the substantial understatement of tax in 1986
computed by respondent using the bank deposits method.
The only other issue we must decide is whether
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