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them as to actual knowledge and authority or lack of actual
knowledge or authority unreliable. We have said that "the
distillation of truth from falsehood * * * is the daily grist of
judicial life." Diaz v. Commissioner, 58 T.C. 560, 564 (1972).
In these circumstances, we must look to the objective conduct of
petitioners and to their specific testimony, especially that of
Ms. Levin, to determine whether it is consistent or inconsistent
with her having placed authority in Mr. Levin to act on her
behalf. If Mr. Levin had such authority, we have jurisdiction.
Moreover, if he had such authority, there was no fraud on the
Court.
Ms. Levin argues that she did not learn about her innocent
spouse claim until 1993 or her statute of limitations defense
until 1995 and, therefore, her failure to challenge the tax
deficiency earlier is not an indication that she authorized or
ratified the petition. Ms. Levin's argument is misplaced that
her conduct only after she was aware of all of her legal options
can be considered. She essentially is saying: "If I knew then
what I know now, I would have done things differently." The
relevant course of conduct is what she did then. In this regard,
we believe that the specific statements made during her testimony
are more revealing than her generalized denials of actual
knowledge of or authorization of the steps being taken with
respect to her tax liability.
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