- 155 -
States v. Stewart, 311 U.S. 60, 71 (1940); Matthews v.
Commissioner, 907 F.2d 1173, 1174, 1178 (D.C. Cir. 1990), affg.
92 T.C. 351, 361 (1989); Bokum v. Commissioner, 94 T.C. at 155,
and cases cited therein.
The parties agree that requirements (1) through (4) have
been satisfied. The parties dispute only whether (5) in signing
the 1986 joint tax return, petitioner knew or had reason to know
that there was a substantial understatement of tax, and (6) it is
inequitable to hold petitioner liable for the tax deficiency that
is attributable to the substantial understatement of tax.
In part I.C., supra, we concluded that petitioner knew and
intended that Betsy had constructive dividend income that was
omitted from petitioner’s and Betsy’s 1986 joint tax return.
Further, petitioner enjoyed a large number of the trips for
which he caused Markette to pay. Under these circumstances, it
is not inequitable to hold petitioner liable for the resulting
tax deficiency. Clevenger v. Commissioner, 826 F.2d at 1382.
We hold for respondent on this issue.
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