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reported on their 1988 return. Petitioner has not shown that Ms.
Dawson used the funds exclusively for her own benefit, and it
appears to us that the funds were largely expended for the
benefit of petitioner’s family or Ms. Dawson’s relatives. The
record shows that petitioner enjoyed significant benefits, such
as expensive remodeling of and furnishings for his home, a boat
which was purchased and redecorated at significant cost, and
vacations to the Caribbean and Disneyland. Petitioner has not
established that such expenditures were characteristic of his
accustomed lifestyle, and we conclude that the benefits they
afforded him were unusual for his lifestyle. With respect to the
other factors to be considered, we note that, while petitioner
was not deserted by Ms. Dawson, they separated and were divorced
in 1990. Such circumstance, however, does not outweigh the
significant benefit that petitioner received from Ms. Dawson’s
embezzlement. Petitioner also has not established that any
hardships would be visited upon him were he not to be relieved
from liability for the deficiency attributable to the omission of
the embezzled funds from the 1988 return.
We find, therefore, that it would not be inequitable to hold
petitioner liable for the understatement attributable to the
funds embezzled by Ms. Dawson in 1988.
Based upon the foregoing, we hold that petitioner is jointly
and severally liable for the deficiencies in, and additions to,
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