- 45 -
Just as surely as if Mr. Heitzman had deliberately hidden the
transaction from petitioner, or had deliberately deceived her
about its existence or its tax consequences, the dynamics of
their marital relationship effectively walled petitioner off from
any substantive knowledge of the transaction.
The record also does not reflect any change in the family’s
standard of living during the 1979-80 timeframe. Indeed, the
only change in standard of living was a precipitous decline in
petitioner’s standard of living in the aftermath of their 1983
divorce.
With respect to the appearance on the 1979 return of the
deductions related to Stonehurst, we find that, at the time the
return was signed, their appearance on the return would not have
caused petitioner to have reason to know of the understatement.
To all appearances, they were perfectly valid. Any questions
that their size might have engendered had already been allayed
because Mr. Heitzman had already apprised petitioner of the
purchase in a way that fully legitimized it in her eyes.
Furthermore, the return had been prepared and signed by a
prominent accounting firm as income tax return preparer and was
without any apparent defect. Compare Bokum v. Commissioner, 94
T.C. at 147-148 (taxpayer incurred a duty to inquire by signing a
return prepared, but not signed, by an income tax return
preparer, which contained a huge, unexplained deduction and an
obvious arithmetic error).
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