Linda S. Dillon - Page 16

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          review the tax returns before signing them.  Further, all of the            
          account statements were handled by Thomas Dillon at Dillon                  
          Securities.  We find that the record supports petitioner's con-             
          tention that she lacked actual knowledge of this account.                   
               Further, we refuse to impute constructive knowledge of this            
          account to petitioner.  Respondent has cited a number of cases              
          wherein a taxpayer either had reason to know about a substantial            
          understatement or had sufficient knowledge such that the taxpayer           
          was put on notice that an understatement existed.  See Hayman v.            
          Commissioner, 992 F.2d 1256 (2d Cir. 1993), affg. T.C. Memo.                
          1992-228; Stevens v. Commissioner, 872 F.2d 1499 (11th Cir.                 
          1989), affg. T.C. Memo. 1988-63; Zimmerman v. Commissioner, T.C.            
          Memo. 1996-223; Kenney v. Commissioner, T.C. Memo. 1995-431.                
          These cases are all distinguishable from the case at bar.  The              
          taxpayers in Hayman and Stevens, supra, were charged with                   
          constructive knowledge of deductions listed in their tax returns.           
          However, in those cases, even a cursory review of the return                
          would have revealed the existence of substantial deductions.                
          Here, the understatement results from the omission of a rela-               
          tively small amount of investment income.  Petitioner, given her            
          limited knowledge and lack of education, would not have noticed             
          anything amiss by simply reviewing the return.                              
               Kenney v. Commissioner, supra, and Zimmerman v. Commis-                
          sioner, supra, involved situations where income had been omitted            





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