-13-
ignorant." Cohen v. Commissioner, T.C. Memo. 1987-537. Had
petitioner reviewed the return, she would have seen that it clearly
disclosed the deductions on the Schedules C and the deferment of
gain on Form 2119.6 Nearly half the deductions related to Glass
Onion Records, a business in which she participated. These items
were of such magnitude compared to the Edmondsons' income that a
reasonable person of petitioner's educational level and background
would have been put on notice that further inquiry should have been
made. See Stevens v. Commissioner, supra at 1507; Bokum v.
Commissioner, 94 T.C. at 148. Moreover, petitioner went on the
Mexican trip for which a deduction was taken. Thus, petitioner knew
or had reason to know of the substantial understatement on the
return. She therefore has not satisfied the third requirement (lack
of knowledge).
C. Inequity of Holding Petitioner Liable
Again assuming, arguendo, that petitioner had satisfied the
knowledge requirement, she still is not entitled to innocent spouse
status because she failed to prove that it would be inequitable to
hold her liable (the fourth requirement). This factor focuses on
whether petitioner benefited from the understatement of tax. Purcell
v. Commissioner, 86 T.C. at 242. "Normal support" is not considered
a significant benefit. Terzian v. Commissioner, 72 T.C. 1164, 1170-
6 The Form 2119 lists the $30,948.64 of deferred gain.
Petitioner was aware that Mr. Edmondson had sold the Seattle
house, and indeed she signed the Form 2119 on which the sale was
reported.
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