- 19 -
on petitioners' returns.16 We find that Mrs. Streck knew or
should have known that there were understatements of tax on the
returns in issue.
Mrs. Streck has also failed to show that it would be
inequitable to hold her jointly and severally liable for the
disputed taxes. An important factor in determining whether it is
inequitable to hold a spouse liable is whether that spouse
significantly benefited, either directly or indirectly, from the
understatement of taxes. Belk v. Commissioner, 93 T.C. 434, 440
(1989); Purcell v. Commissioner, 86 T.C. 228, 242 (1986), affd.
826 F.2d 470 (6th Cir. 1987); sec. 1.6013-5(b), Income Tax Regs.
Normal support is not considered a significant benefit. Terzian
v. Commissioner, 72 T.C. 1164, 1172 (1979). Mrs. Streck bears
the burden of proving that she received no significant benefit
from the unreported income other than normal support, and this
burden must be supported with specific evidence of lifestyle
expenditures, as well as asset acquisitions. Bokum v.
Commissioner, 94 T.C. at 157; Estate of Krock v. Commissioner, 93
T.C. 672, 681 (1989).
Mrs. Streck failed to provide any specific evidence that her
lifestyle and asset acquisitions were normal support. There is
no evidence of petitioners' lifestyle prior to 1983. Petitioners
16On their tax returns, petitioners reported taxable income
of zero in 1983, $66,857 in 1984 (after amendments), $31,561 in
1985, and $103,836 in 1986.
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011