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illegal income does not support her contention that she had no
reason to know about the understatements of tax. Instead of
exculpating petitioner, the evasiveness should have caused her to
question her then-husband's activities and investigate the tax
returns further. See id. at 1507. Petitioner testified that
Emmens "was always sticking papers in front of [her] to sign",
kept extremely unusual work hours, and was very secretive about
his business. Petitioner further testified that he was a
"dominant person"; however, she was not prevented from examining
the returns or any other documents. A reasonably prudent person
in petitioner's position would have been prompted to inquire
further into the joint tax liability.
During the years in issue, petitioner lived a lifestyle that
far exceeded the income reported on her and Emmens' joint tax
returns. Their legitimate locksmith and beauty salon activities
were only marginally profitable. Accordingly, we find that
petitioner knew, or should have known of the substantial
understatements of tax.
Not Equitable To Hold Petitioner Liable
To be entitled to relief as an innocent spouse, petitioner
must show that it would be inequitable to hold her liable for the
deficiencies in tax for the years at issue. Sec. 6013(e)(1)(D).
Again assuming, arguendo, that petitioner had satisfied the
knowledge requirement, she still is not entitled to innocent
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