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United States, 509 F.2d 162, 166-167 (5th Cir. 1975); Terzian v.
Commissioner, 72 T.C. 1164, 1170 (1979). We conclude that a
reasonably prudent person in petitioner's position would not
have had reason to know of the unreported community income from
Trucking during the years at issue.
In arriving at this conclusion, we emphasize that petitioner
did not complete the ninth grade and was not sophisticated with
respect to financial or tax matters. Prior to and during her
marriage, petitioner did not hold a job. Apparently, she had no
experience with paychecks or income taxes and never filed an
income tax return. Moreover, there is no indication of lavish or
extravagant expenditures that might have given petitioner reason
to know of the unreported income. Rather, petitioner lived a
modest lifestyle.
Trucking was a partnership between Mr. Thompson and his
father. Petitioner was unfamiliar with the financial condition
and business operations of Trucking. Taxation of income from a
partnership is far more complicated than the taxation of an
employee's wages. A partner's income is based upon his or her
"distributive share" of a partnership's tax items. Sec. 702(a).
Without going into an elaborate explanation of partnership
accounting, we merely note that a partner might have take-home
money, without having taxable income from the partnership; e.g.,
a draw. Consequently, petitioner did not have reason to know of
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