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gross income and petitioner's bank statements would have revealed
that expenses exceeded reported adjusted gross income by almost 2
to 1. See Chandler v. Commissioner, supra; Tafolla v.
Commissioner, T.C. Memo. 1991-576. The record does not indicate
that petitioner was prohibited from reviewing those documents or
investigating the family finances, or that Mr. Muhn was deceitful
about the family finances. See Cousins v. Commissioner, T.C. Memo.
1995-129. Such an inquiry would have seemed appropriate given that
the 1991 return was filed during Mr. Muhn's audit. Thus, we hold
that petitioner is not entitled to innocent spouse relief with
respect to the net income from PFA.
2. Inequities of Holding Petitioner Liable
Assuming arguendo that petitioner did not know or did not have
reason to know of the omitted income on the 1991 Federal income tax
return, petitioner failed to meet her burden of proof with respect
to the inequities of holding her liable for the deficiencies and
additions to tax. Rule 142(a).
In examining the inequity of holding petitioner liable, we
focus on whether she received significant benefit from the omission
of income, Estate of Krock v. Commissioner, 93 T.C. 672, 677-678
(1989), and whether she was deserted, divorced, or separated, sec.
1.6013-5(b), Income Tax Regs. We may also consider whether
petitioner will suffer undue hardship as a result of the
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