- 31 - The lack of knowledge, as contemplated by section 6013(e)(1)(C), is not a mere lack of understanding of the tax consequences of a deduction or credit. Hayman v. Commissioner, 992 F.2d at 1261; Stevens v. Commissioner, 872 F.2d at 1505 n.8; Purcell v. Commissioner, 826 F.2d at 474, 86 T.C. at 237-238; McCoy v. Commissioner, 57 T.C. 732, 734 (1972). We first consider whether Nancy knew of the State Coal investment. Nancy's testimony on this point is clear and credible. The surrounding circumstances are consistent with her testimony. Sheldon wrote the checks to pay for the State Coal investment on his individual checking accounts. It was Sheldon's practice, both before and during his marriage to Nancy, to keep his business and investment activities separate from his home life. The witness who dealt with Sheldon in the State Coal matter testified that, although he had met Nancy several times, he never mentioned State Coal to Nancy, and he never observed anyone else referring to State Coal in Nancy's presence. Nancy's running of the Silverman household with money that Sheldon gave to her for this purpose is not inconsistent with Nancy's lack of knowledge about State Coal. Nancy's service as custodian or trustee for the children's bank accounts or A.T.& T. stock account (see supra table 7) is not at all indicative of whether Nancy knew of State Coal by the time the 1981 tax return was signed. Petitioners' burden on this limited point is merely toPage: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Next
Last modified: May 25, 2011