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The Court of Appeals for the Tenth Circuit is the likely
venue for any appeal of this case. We have found no published
authority of the Court of Appeals for the Tenth Circuit adopting
the Price approach. In an unpublished order and judgment,
however, the Court of Appeals for the Tenth Circuit recently
quoted Price, as follows: “A spouse has ‘reason to know’ of the
substantial understatement if a reasonably prudent taxpayer in
her position at the time she signed the return could be expected
to know that the return contained the substantial
understatement.” Estate of Sympson v. Commissioner, 79 AFTR 2d
97-2942, at 97-2944, 97-1 USTC par. 50,484, at 88,288 (10th Cir.
1997).
Because we believe that Barbara had reason to know of the
understatements under the more lenient approach followed by the
Court of Appeals for the Ninth Circuit in Price v. Commissioner,
supra, any disparity between our interpretation of section
6015(b)(1)(C) and that of a court following Price is immaterial
to our disposition of this case.
b. Reason to Know
(1) Introduction
In Price v. Commissioner, supra at 965, the Court of Appeals
for the Ninth Circuit said:
A spouse has "reason to know" of the substantial
understatement if a reasonably prudent taxpayer in her
position at the time she signed the return could be
expected to know that the return contained the
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