- 43 -
We also believe that the Fieldses' expenditures were lavish
and unusual for a couple reporting 1980, 1981, and 1982 taxable
income of $56,847, $71,010, and $5,550, respectively. Mrs.
Fields failed to show that petitioner was not forthright about
the omitted income.26 Funds were always available or made
available for all of petitioners' expenditures, yet Mrs. Fields
never asked petitioner about the source of the large amounts of
money that they spent. She also did not ask him whether the
subject returns were accurate, preferring to assume that they
were. If she had asked, Mrs. Fields testified, he would have
given her the returns to thoroughly review. We believe that a
reasonable person in Mrs. Fields' position would have inquired
about the accuracy of the income reported on the returns, given
the facts of this case. Mrs. Fields cannot turn a blind eye to
her tax obligations and expect innocent spouse relief. See
Estate of Jackson v. Commissioner, 72 T.C. 356, 361 (1979);
Kenney v. Commissioner, T.C. Memo. 1995-431.
We conclude that Mrs. Fields knew (or should have known)
that the subject returns contained substantial understatements.
Based on this conclusion, Mrs. Fields is not entitled to innocent
spouse relief regardless of whether it would be inequitable to
hold her liable for the subject deficiencies. We note quickly in
26 Mrs. Fields failed to establish that petitioner was
evasive or otherwise misled her with respect to the true level of
their income, and we find no evidence that petitioner tried to
hide the unreported income from Mrs. Fields.
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