- 58 - 6013(e)(1)(D); Flynn v. Commissioner, 93 T.C. 355, 367 (1989); sec. 1.6013-5(b), Income Tax Regs. A factor to be considered is whether the purported innocent spouse significantly benefited beyond normal support, either directly or indirectly, as a result of the unreported income. Hayman v. Commissioner, 992 F.2d at 1262; Belk v. Commissioner, 93 T.C. at 440; Purcell v. Commissioner, 86 T.C. 228, 242 (1986); sec. 1.6013-5(b), Income Tax Regs. Normal support is determined by the circumstances of the taxpayers. See Sanders v. United States, 509 F.2d at 168; Estate of Krock v. Commissioner, 93 T.C. 672, 678 (1989); Flynn v. Commissioner, supra. Petitioners bear the burden of proving that Ms. Walters received no significant benefit from the understatement other than normal support, and that burden must be satisfied with specific facts regarding lifestyle, expenditures, asset acquisitions, and the disposition of the benefits of the understatement. See Bokum v. Commissioner, 94 T.C. at 157; Estate of Krock v. Commissioner, supra. Petitioners contend that Ms. Walters did not benefit significantly from the unreported income but rather received merely ordinary support that was commensurate with the upper middle class lifestyle that petitioners had maintained before the embezzlement. They assert that Ms. Walters herself was not extravagant in her spending habits. Petitioners contend further that the Camelot benefited FIP through the entertainment of its clients and does not demonstrate an extravagant lifestyle. TheyPage: Previous 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 Next
Last modified: May 25, 2011