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74 F.3d 1528, 1540 (7th Cir. 1996), revg. T.C. Memo. 1994-241
(petitioner wife did not have reason to know there was
substantial understatement where, despite the relative size of
deductions vis-a-vis income, a consistent adjusted gross income
was reported on returns over the years, the returns at issue
involved the "complex financial world" of trading losses, and
there was no appreciable difference in living standard from prior
years). Accordingly, we further hold that Mrs. Meyer had a duty
to inquire. Price v. Commissioner, 887 F.2d at 965-966; Park v.
Commissioner, T.C. Memo. 1993-252, affd. 25 F.3d 1289 (5th Cir.
1994).
The extent of the putative innocent spouse's duty to inquire
may be inversely proportional to the complexity of the items at
issue. In Friedman, the disallowed deduction involved the
labyrinthine world of tax shelters, and the Court held a mere
inquiry of her husband by the relief-seeking spouse entitled her
to relief under section 6013(e). Friedman v. Commissioner, 53
F.3d at 531; see Epstein v. Commissioner, T.C. Memo. 1996-239.
In the instant case, however, the deduction at issue merely
involves business expenses, which Mrs. Meyer failed to show were
complex financial transactions. See Resser v. Commissioner,
supra at 1538.
Petitioner claims that her inability to understand taxes,
her lack of business orientation, and the fact she did not
advance beyond high school should preclude the imputation of
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