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sports memorabilia, she had no actual knowledge nor reason to
know that the activity produced omitted income.
In deciding whether a spouse "has reason to know" of an
understatement, we recognize several factors that are relevant to
our analysis, including: (1) The level of education of the spouse
seeking relief; (2) the spouse's involvement in the family's
business and financial affairs; (3) the presence of expenditures
that appear lavish or unusual when compared to the family's past
levels of income, standard of income, and spending patterns; and
(4) the other spouses's evasiveness and deceit concerning the
couple's finances. See Butler v. Commissioner, supra.
As to the first factor, level of education, Barbara earned a
college degree in teaching. Although Barbara knew about
Raymond's sports memorabilia activity, she was a full-time
student and, generally, was not involved in the activity.
As to the second factor, involvement in the family's
finances, the record does not clearly show who was responsible
for maintaining the family checkbook. Both Barbara and Raymond
wrote some checks on the National City Bank account to pay the
household bills. Both had access to the National City bank
statements mailed to petitioners' residence. Barbara, however,
did not have access to the Ameritrust account statements that
were delivered to Morova'a store and then taken by Morova to the
warehouse.
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