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factors include: (1) Whether the spouse seeking relief has been
deserted by the other spouse or is divorced or separated from
that spouse, sec. 1.6013-5(b), Income Tax Regs.; and (2) probable
future hardships that would be visited upon the purportedly
"innocent spouse" were he or she not relieved from liability.
Sanders v. United States, supra at 171 n.16.
Based upon the record in the instant case, we conclude that
petitioner has failed to establish that she did not receive
significant benefits from the funds that Mr. Peterson embezzled
during taxable years 1990 and 1991. For 1990, the record
indicates that the couple enjoyed more disposable income as a
result of the embezzled funds than would have been otherwise
available from the couple's reported earnings. Petitioner has
failed to establish that Mr. Peterson used the embezzled funds in
a manner that did not benefit her significantly. To the
contrary, and particularly with respect to taxable year 1990, the
record indicates that the funds were used for the significant
benefit of the family and its beef farm operation. Petitioner
has not established that such benefits were consistent with her
then existing lifestyle, nor has she established that they
constituted normal support.
When assessing whether it would be inequitable to hold
petitioner liable for the deficiencies attributable to Mr.
Peterson's embezzlement activity, we also consider whether
petitioner was deserted or divorced subsequent to that activity.
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