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attributable to assets acquired for the beef farm and $65,219 is
attributable to out-of-pocket Schedule F expenses. Despite
whether petitioner was aware of the tax withholdings, or even the
depreciation deductions claimed on the return, she was fully
aware of the out-of-pocket expenditures. Not only did she write
checks in order to pay many of the farm expenses, petitioner's
former husband did not conceal the assets acquired for the
couple's farm; i.e. the vehicles, farm equipment, livestock, etc.
In fact, the nature of such assets make them noticeable, so
petitioner was undoubtedly aware of there existence. In any
event, a summary review of the return indicates that, even
without regard to living expenses, the expenditures and tax
withholdings totaled at least $101,325 more than the $90,181
reported as gross income for taxable year 1990.
We conclude that petitioner had sufficient involvement in
her family's financial affairs to put a reasonable person in her
position on notice that the income reported in her 1990 return
was erroneous or that further inquiry was warranted.
Taxable Year 1991
Just as she did for taxable year 1990, petitioner managed
her family's checkbooks for taxable year 1991. On their 1991
return, petitioner and her former husband reported $45,000 of the
$186,000 that Mr. Peterson had embezzled during the taxable year.
Petitioner maintains that at the time she signed the return on
August 15, 1992, she believed that all funds embezzled by Mr.
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