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ordinarily would lie) substantially aid the Court. Friedman v.
Commissioner, supra; Hayman v. Commissioner, supra.
Issue 1. Whether the Understatement Was Attributable to Grossly
Erroneous Items of Petitioner's Husband Alone
Mrs. Meyer has failed to prove by a preponderance of the
evidence that a substantial understatement of tax exists that is
attributable to grossly erroneous items of her husband alone for
any of the items respondent raised in the notice of deficiency.
The items remaining for discussion concern the omission from
income of the $180,748 constructive dividend, as well as the
disallowed $19,753 Schedule C expense.
The term "grossly erroneous items" is defined by section
6013(e)(2) as "(A) any item of gross income attributable to such
[culpable] spouse which is omitted from gross income, and (B) any
claim of a deduction, credit, or basis by such spouse in an
amount for which there is no basis in fact or law." Whether a
claim is grossly erroneous must be evaluated as of the time of
filing of the tax return. Friedman v. Commissioner, supra at
529.
A. The Constructive Dividend
Omitted income items are automatically grossly erroneous if
solely attributable to the culpable spouse. Sec. 6013(e)(2)(A).
Although petitioner's husband organized and owned AED entirely,
Mrs. Meyer had access to, and use of, the funds held in this
entity's name. In fact, respondent's determination of the
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