Julian O. Von Kalinowski and Penelope J. Von Kalinowski - Page 18

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          knowledge of their contents.  See Hayman v. Commissioner, supra             
          at 1262; Terzian v. Commissioner, 72 T.C. 1164, 1170 (1979).                
          Petitioner is thus deemed to have known that, in 1981, the tax              
          shelter investments resulted in losses totaling $368,675 compared           
          to her husband’s law firm and royalty income of $456,645.                   
          Similarly, petitioner is charged with knowledge that her                    
          husband’s 1982 income from such sources of $370,263 was offset by           
          tax shelter losses of $228,133.  “Tax returns setting forth large           
          deductions, such as tax shelter losses offsetting income from               
          other sources and substantially reducing * * * the couple’s tax             
          liability, generally put a taxpayer on notice that there may be             
          an understatement of tax liability.”  Hayman v. Commissioner,               
          supra at 1262; see also Levin v. Commissioner, T.C. Memo. 1987-             
          67.  We find that the size of the losses claimed on the return              
          should have alerted petitioner to question their legitimacy.11              
               Where a spouse has a duty to inquire as to the legitimacy of           
          a deduction, the failure to satisfy such duty may result in                 
          constructive knowledge of the understatement being imputed to               
          her.  See Price v. Commissioner, 887 F.2d at 965; see also Levin            
          v. Commissioner, supra.  A spouse cannot obtain relief from joint           

               11  The investment tax credits generated by the tax shelter            
          investments and carried back by petitioners to prior tax years              
          (including years prior to their marriage) with respect to which             
          petitioners filed joint and separate Forms 1045 would seemingly             
          have provided petitioner with an additional justification to seek           
          more information regarding the investments.                                 

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