- 18 - in such matters prior to March 1989, when he admits he assumed responsibility for writing checks to pay his family’s bills. Perfect knowledge of one’s family’s financial affairs, however, is not required to satisfy the reason to know standard. Shea v. Commissioner, 780 F.2d 561, 567 (6th Cir. 1986), affg. in part and revg. and remanding in part T.C. Memo. 1984-310; Sanders v. Commissioner, supra at 168. We conclude that petitioner had sufficient involvement in his family’s affairs to put a reasonable person in his position on notice that the income reported in the 1988 return was erroneous or that further inquiry was warranted. During 1988, Ms. Dawson caused PAHHS and BHHS to issue to her between 13 and 22 payroll checks per month, with the amounts of the checks ranging from $50 to $1,500. All of the funds embezzled by Ms. Dawson during 1988 were deposited in joint bank accounts over which petitioner had signature authority and on which he wrote checks. The statements for the accounts were mailed to the residence of petitioner and Ms. Dawson, and he opened and looked at least some of the statements. Petitioner knew where the statements were kept at their residence, and he could have reviewed them whenever he desired. Perusal of the bank statements would have alerted petitioner to the actual level of the couple’s income. Furthermore, the number of deposits of payroll checks made by Ms. Dawson in the accounts and the dollar amount of the deposits reflected in the statements would havePage: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
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