Estate of Robert E. Sympson, Deceased, Elizabeth C. Sympson Personal Representative and Elizabeth C. Sympson - Page 6

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               throughout the marriage, including the years of                        
               defalcation, there was no dramatic change. * * *                       
               Importantly, there was evidence that the Sympsons had                  
               sufficient cash flow from sources other than the                       
               unreported income to more than cover their family                      
               expenditures during this period. [Id. at 95-2257, 95-1                 
               USTC par. 50,276, at 88,020-88,021.]                                   
          So instructed, we conclude that the Court of Appeals would find             
          that the increasing expenditures would not have given Mrs.                  
          Sympson reason to know.  Therefore, we find that, for tax years             
          1982, 1983, 1984, 1985, and 1986, Mrs. Sympson did not have                 
          reason to know of the substantial understatement.                           
               For 1987, however, another factor is present.  Mr. Sympson's           
          thefts were discovered in July of that year.  Mrs. Sympson became           
          aware of the problem soon after, when her father told her that              
          all the furniture was gone out of Mr. Sympson's office, and she             
          learned that he had been fired.  In August or September 1987,               
          Robert asked her to sign deeds on various properties, telling her           
          that there was a problem with Mrs. Roderick's funds.  In early              
          1988, Mrs. Sympson was served with a copy of a State court suit             
          for more than $14 million.  She read the complaint, which accused           
          her husband of stealing from Mrs. Roderick.                                 
               In the spring of 1988, Mrs. Sympson was told by attorneys              
          that there could be a tax problem with the misappropriated funds.           
          When her husband told her he would treat the withdrawals from               
          Mrs. Roderick's accounts as loans on their income tax return,               
          Mrs. Sympson accepted that without further question, even though            

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