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deceitful about the couple's finances. Under case law, this
factor is to be viewed in a broader context by looking at the
totality of the circumstances. As such, this factor can include
a taxpayer's refusal to be forthright about the couple's income
or a taxpayer's refusal to discuss investments. Sanders v.
United States, 509 F.2d 162, 167 (5th Cir. 1975).
Besides the monthly allowance, Mr. Aude dominated all
aspects of the financial situation. There is no evidence that
Mr. Aude was deceitful regarding the finances. However, if
petitioner asked Mr. Aude any question regarding their finances,
Mr. Aude would say it was his money and thus not her concern. It
was only after the marriage ended that petitioner learned more
details regarding the financial affairs for the years at issue,
including the financial worth of the household. By keeping
petitioner uninformed about "his money," Mr. Aude was not open
about the couple's finances. His refusal to discuss the family
finances and investment impeded petitioner's "reason to know"
about the understatement.
Considering all of the circumstances concerning these
returns, we conclude that a reasonably prudent person under
petitioner's circumstances--living a modest life, uninvolved in
the financial affairs of the family, and without any financial
background -- at the time of signing could not be expected to
know that Mr. Aude's deductions would give rise to an
understatement of tax.
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