Estate of Raymond E. Jones, Deceased, Dorothy J. Jones, Independent Executrix, and Dorothy J. Jones - Page 23

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          Petitioner was an enterprising individual, savvy enough in                  
          business affairs and bookkeeping to have built the successful               
          businesses that she operated.  We are satisfied, based on the               
          record in the instant case, that petitioner had the ability to              
          understand that there was a substantial understatement on the               
          1981 return and that she was sufficiently put on notice that she            
          needed to inquire further into the partnership deductions                   
          generating the understatement.  Consequently, we hold that                  
          petitioner has failed to prove that she did not have reason to              
          know that there was an understatement of tax on the return for              
          the 1981 taxable year and that petitioner is therefore not                  
          entitled to relief as an innocent spouse under section 6013(e).6            
               To reflect the foregoing,                                              
                                                       Decision will be               
                                                  entered under Rule 155.             











          6                                                                           
               Because we hold that petitioner had reason to know of the              
          understatement, we need not address the questions of whether the            
          Choate Square partnership deductions were grossly erroneous or              
          whether it would be inequitable to hold petitioner liable for the           
          deficiency attributable to the understatement.                              




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