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must be considered in the totality of the circumstances.
Purificato v. Commissioner, supra at 293; sec. 1.6013-5(b),
Income Tax Regs.
a. 1985 Taxable Year
Petitioner has not demonstrated that she did not realize a
significant benefit from the 1985 insurance proceeds. Petitioner
failed to produce the couple's joint checking account records for
the 1985 tax year as she did for the 1986 and 1987 tax years.
The failure of a party to produce relevant evidence within its
possession or control gives rise to the presumption that, if
produced, it would be unfavorable. Wichita Terminal Elevator Co.
v. Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513
(10th Cir. 1947).
Petitioner failed to meet her burden of proving that it
would be inequitable, within the meaning of section
6013(e)(1)(D), to hold her liable for that portion of the
deficiency related to 1985. Therefore, she is not an "innocent
spouse" in 1985.
b. 1986 Taxable Year
With respect to the 1986 condemnation award, a check
representing Mr. Acquaviva's share of the condemnation award was
deposited into his personal checking account. The bulk of the
condemnation award was used in Mr. Acquaviva's real estate
ventures, which failed in subsequent years. In this regard, we
believe petitioner did not receive any of the benefits of
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