- 50 -
either directly or indirectly, from the unreported income.
Hayman v. Commissioner, 992 F.2d 1256, 1262 (2d Cir. 1993), affg.
T.C. Memo. 1992-228; Belk v. Commissioner, 93 T.C. 434, 440
(1989); Purcell v. Commissioner, 86 T.C. at 242; H. Rept. 98-432
(part 2), at 1501, 1502 (1984); sec. 1.6013-5(b), Income Tax
Regs. Normal support is determined by the circumstances of the
taxpayers. Sanders v. United States, 509 F.2d at 168; Estate of
Krock v. Commissioner, 93 T.C. 672, 678 (1989); Flynn v.
Commissioner, 93 T.C. 355, 367 (1989).
Petitioners argue that petitioner wife did not benefit from
the substantial understatement of income by petitioner husband
or receive substantial amounts from petitioner husband in the
years at issue. Petitioners point out that petitioner wife owned
the home in which petitioners lived and she owned a home on
LaGrange which she sold in 1987. Her net cash proceeds were
$23,562, $14,848 of which she deposited in her household account.
She also received $64,482 from the sale of her home in 1988,
which she deposited in her own account.
Petitioner wife benefited from the understatements on
petitioners' 1987, 1988, and 1989 returns. Petitioner wife had
wages of $15,500 in 1987, $10,200 in 1988, and none in 1989, and
therefore depended on petitioner husband for her support. In
1987 and 1988 petitioner husband deposited funds in her bank
accounts which she used to pay household expenses. In 1989,
petitioner husband used the Premiere and Canta corporate accounts
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