Debra L. Streck and Donald W. Streck - Page 19

                                       - 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  Next

Last modified: May 25, 2011