- 14 -
Commissioner, 6 T.C. 1158 (1946), affd. 162 F.2d 513 (10th Cir.
1947); see also Glimco v. Commissioner, 397 F.2d 537, 541 (7th
Cir. 1968, affg. T.C. Memo. 1967-119); Frierdich v. Commissioner,
925 F.2d 180 (7th Cir. 1991).
Petitioner also attempts to restrict the amount of weight we
attribute to her involvement in her family's financial and
business affairs by arguing that Mr. Peterson's embezzlement
activities occurred at his law office and not at the couple's
residence, explaining that the embezzled funds were funneled
through the law practice and that she possessed minimal knowledge
about such practice. This argument is without merit as it
attempts to shift our focus of inquiry from her family's
financial activities to Mr. Peterson's law practice. Granted,
petitioner may not have known much about her former husband's law
practice, but she knew how much money the family was spending and
how much it was reporting as income.
A taxpayer claiming "innocent spouse" relief cannot simply
turn a blind eye to facts within his or her reach that would have
put a reasonably prudent taxpayer on notice that further inquiry
was necessary. Sanders v. United States, 509 F.2d at 169; Bokum
v. Commissioner, 94 T.C. at 148; McCoy v. Commissioner, 57 T.C.
732, 734 (1972). Even a cursory examination of petitioner's 1990
return should have placed her on notice that something was amiss.
The return listed expenditures and tax withholdings totaling
approximately $191,506. Of this amount, roughly $95,319 is
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011