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attributable to omitted income if, upon signing his or her tax
return, the taxpayer had reason to know about the income-
producing transaction that produced the omitted income. Reser v.
Commissioner, supra at 1265; see also Sanders v. United States,
509 F.2d 162 (5th Cir. 1975); Terzian v. Commissioner, 72 T.C.
1164, 1170 (1979).
Here, the record establishes that a reasonably prudent
taxpayer would have known about the omitted income. Although
Ms. Evans was involved in the family finances and knew about
Mr. Evans' ranching activity, she took no steps to assure herself
that petitioners' tax returns were filed properly. She did not
ask (or even care) to see the returns or the underlying records.
She was not concerned with, and turned a blind eye to, her tax
obligations. A reasonable person in her position would have at
least asked about the accuracy of the income reported on the 1989
return. This is especially true in the instant setting where
Ms. Evans could easily have discussed the contents of the returns
with Mr. Evans at or before the time that she signed them. She
was not coerced into signing the returns, and Mr. Evans did not
exercise undue influence over her with respect to their financial
affairs. See Adams v. Commissioner, 60 T.C. 300, 303 (1973).
We hold that Ms. Evans is not an innocent spouse in any of
the years in issue. In reaching all of our holdings herein, we
have considered all arguments made by petitioners for contrary
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