- 22 -
hardships that would be imposed on the spouse seeking relief, if
such relief were denied. Sanders v. United States, supra.
Petitioner contends that she did not enjoy any economic
benefit beyond normal support from the understatement. In
support of her contention, petitioner claims that Emmens "never
spent any money on her" and that Emmens' girlfriends benefitted
from his unreported income. This contention overlooks the fact
that petitioner moved to a new house, drove a new Cadillac,
occasionally utilized the planes and boats from the drug
smuggling operation for personal and social use, and generally
lived a lifestyle that exceeded normal support.
Considering all the facts and circumstances involved herein,
we conclude that it would not be inequitable to hold petitioner
liable for the determined understatement.
Accordingly, we hold that petitioner is not an innocent
spouse under section 6013(e).
Issue 2. Addition to Tax for Fraud
Respondent determined that petitioner is liable for the
addition to tax for fraud under section 6653(b) for the years at
issue. Petitioner asserts that she is not liable for the
addition to tax for fraud because she lacked fraudulent intent
and had no knowledge of Emmens' illegal activities.
If any part of an underpayment is due to fraud, a taxpayer
is liable for an addition to tax equal to 50 percent of the
Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NextLast modified: May 25, 2011