- 9 -
petitioner that Mr. Muhn's compensation was not reported. See
Chandler v. Commissioner, T.C. Memo. 1993-540, affd. without
published opinion 46 F.3d 1131 (6th Cir. 1995). The failure to
review a tax return generally does not absolve a taxpayer of
liability. Hayman v. Commissioner, 992 F.2d 1256, 1262 (2d Cir.
1993), affg. T.C. Memo. 1992-228. A taxpayer may not generally
close her eyes and plead ignorance. Edmondson v. Commissioner,
T.C. Memo. 1996-393. Petitioner was obligated to inquire into the
failure to report that income, and there is no evidence of such an
investigation. See Park v. Commissioner, T.C. Memo. 1993-252,
affd. 25 F.3d 1289 (5th Cir. 1994). Thus, we hold that petitioner
is not entitled to innocent spouse relief with respect to Mr.
Muhn's unreported income from the Ruidoso Valley Chamber of
Commerce.
b. Net Income From PFA
Petitioner argues that she was not involved in the operation
of PFA and signed documents relating to the trust only at her
husband's direction. Consequently, petitioner contends that she
had no knowledge of her husband's role in the trust and did not
know that any such role would result in taxable income.
On brief, petitioner asserts:
The organization [PFA] has a complex
structure. The structure of the organization
utilized a "creator", "trustee" and off-shore
bank as "interim beneficiary". Petitioner did
not understand the complex structure of the
organization to which she was directed by her
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