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inconsequential. Accordingly, we find that petitioner's level of
education supports respondent's claim that petitioner knew or had
reason to know of the substantial understatements contained in
the joint returns for both taxable years at issue.
The second factor we consider when assessing whether a
taxpayer had reason to know of the existence of a substantial
understatement at the time such taxpayer signed his or her return
focuses on the taxpayer's involvement in his or her family's
business and financial affairs. We separately analyze this
factor with respect to each taxable year at issue.
Taxable Year 1990
Petitioner managed her family's checkbooks during taxable
year 1990. She also was her household's principal bill payer.
During taxable year 1990, petitioner drew checks totaling
approximately $97,052 against the family's bank accounts.
Similarly, petitioner's former husband drew checks totaling
approximately $27,296 against the accounts. Additionally,
another $18,228 was drawn against the accounts. Consequently, at
least $142,576 passed through these accounts during taxable year
1990. This was approximately $52,000 more than the gross income
of $90,181 reported on the Petersons' return for 1990. As
manager of the bank accounts, petitioner was obviously aware of
this activity.
Petitioner attempts to clarify this disparity by explaining
that her former husband borrowed substantial amounts of money and
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