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any meaningful answers to any questions she from time to time
asked.
As stated in Friedman, the fact that the innocent spouse-
taxpayer knows of the existence of a tax shelter, and the
deductions it hopefully gives rise to, does not itself establish
that she cannot meet the lack of knowledge requirement of section
6013(e)(1)(C). Friedman v. Commissioner, supra at 530. In the
case before us, petitioner testified that she knew that Harvey
was in the business of selling tax shelters, but was unaware that
he was investing in them himself. While this profession of lack
of knowledge is of course self-serving, petitioner's additional
testimony rings true, namely, that she was led to believe, at
least during the relevant years, that tax shelters were on the up
and up and were, like IRAs, a legitimate way to save taxes. In
the era that encompassed the years 1976-1978, individuals far
more financially sophisticated than petitioner let themselves
believe that the tooth fairy in the guise of a tax shelter would
bring them substantial wealth, at little or no cost to
themselves, which would be entirely paid for out of the National
fisc as tax savings. We, therefore, hold that petitioner had no
reason to know that the returns for the relevant years contained
substantial understatements of tax.
To meet the fourth requirement imposed by section 6013(e) to
validate an innocent spouse claim, the taxpayer must establish
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