- 18 -
questionable, we find it to be unreliable and lacking
credibility.3 Accordingly, we conclude that petitioner has
failed to establish that she lacked involvement in her family's
financial and business affairs to an extent sufficient to
conclude that she had no reason to know that the income reported
in the couple's return for taxable year 1991 was erroneous.
The third factor we consider is the presence of unusual or
lavish expenditures by petitioner's family. The presence of
unusual or lavish expenditures may put a taxpayer on notice that
it is probable that income is being omitted from a joint return.
Estate of Jackson v. Commissioner, 72 T.C. 356, 361 (1979). A
taxpayer claiming relief as an "innocent spouse" cannot close his
or her eyes to unusual or lavish expenditures that might have
alerted him or her to unreported income. Terzian v.
Commissioner, 72 T.C. 1164, 1170 (1979); Mysse v. Commissioner,
57 T.C. 680, 699 (1972).
Petitioner's argument with respect to this factor is
considerably thin. It essentially amounts to a general denial
that either she or her former husband experienced any change in
their individual lifestyles and that the couple did not make any
unusual or lavish expenditures during either taxable year at
3As previously noted, uncontradicted questionable testimony
need not be accepted by this Court. See Lovell & Hart, Inc. v.
Commissioner, 456 F.2d 145, 148 (6th Cir. 1972), affg. T.C. Memo
1970-335; MacGuire v. Commissioner, 450 F.2d 1239, 1244 (5th
Cir. 1971) affg. T.C. Memo. 1970-89; Tokarski v. Commissioner, 87
T.C. 74, 77 (1986).
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