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3 years in issue. The amounts embezzled constituted 42 percent
of that amount. It is simply ludicrous for a person who was a
mature full-time college student to say that he had no reason to
know that something was not awry with this situation. It may be
that he did not know exactly where the money came from, but
surely he was aware when the returns were filed that they spent
more than they were reporting on their returns.
The same is true concerning the deductions claimed for the
alleged accounting business. Petitioner knew that Linda worked
full-time. During 1992 and 1993 she either was pregnant or had a
baby. There is no evidence that remotely suggests that Linda's
alleged accounting business was a reality.
Finally, while it is perhaps unnecessary to discuss whether
it would be inequitable to hold petitioner liable for the
deficiencies, see sec. 6013(e)(1)(D), we note that petitioner is
in a poor position to make such a claim. In making this
observation we consider, inter alia, whether petitioner
significantly benefited from the understatement, beyond normal
support, and whether petitioner has been divorced. Belk v.
Commissioner, 93 T.C. 434, 440 (1989); sec. 1.6013-5(b), Income
Tax Regs.
Petitioner may be in the process of being divorced, and
while married to Linda he may not have enjoyed a lavish
lifestyle. But he clearly did not live the life of a full-time
student, and the lifestyle that he did enjoy was due in no small
part to Linda's defalcations. Furthermore, after Linda was
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