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Given these facts and circumstances, we conclude that it
would be inequitable to hold Mrs. Gaskins liable for the
deficiencies in tax arising from Mr. Gaskins' understated income
for the taxable years 1979, 1980, and 1981.
Mrs. Ouinn
Knowledge of the Understatement
Mrs. Quinn argues she did not know, and had no reason to
know, of any substantial understatements of income on the
Quinns' returns. Respondent counters by stating that Mrs. Quinn
has not met her burden of proof on this required element for
relief. The record is clear that Mrs. Quinn had no actual
knowledge of the understatement of Mr. Quinn's income. Thus, we
must decide whether she had reason to know of such
understatement.
Mrs. Quinn has a high school education and work experience
as a legal secretary; she had no special knowledge of financial
matters. She controlled the family finances. Mrs. Quinn
deposited their paychecks, paid the household bills, balanced
the checkbook, and managed their savings. Their savings were in
passbook savings accounts, Government savings bonds, IRA
accounts, employer retirement or pension plans, and certificates
of deposit. She prepared the Quinns' joint tax returns for the
years at issue.
Mrs. Quinn was not familiar with or involved in the
operations of West Pine. She was not an officer or director.
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