David C. Jonson and Estate of Barbara J. Jonson, Deceased - Page 18

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               substantial understatement.  Factors to consider in                    
               analyzing whether the alleged innocent spouse had                      
               "reason to know" of the substantial understatement                     
               include: (1) the spouse's level of education; (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 living, and                
               spending patterns; and (4) the culpable spouse's                       
               evasiveness and deceit concerning the couple's                         
               finances.  [Citations omitted.]                                        
                    (2)  Discussion                                                   
                    (a)  Education                                                    
               Barbara was highly educated, with a master’s degree relating           
          to education, her chosen professional field.                                
                    (b)  Involvement in Financial Affairs                             
               Barbara was peripherally involved in David’s consulting                
          business; she kept him advised of collections and reminded him to           
          pursue delinquent accounts.  She had full responsibility for                
          writing the checks for household bills, reviewing the bank                  
          statements, and balancing the family checkbook.  She controlled             
          the investment of her own retirement savings.  She was a                    
          coinvestor with David in a real estate limited partnership, and             
          she was a coowner with him of an apartment building, which                  
          building they sold, at least in part, on the basis of her advice            
          to David that the investment was unprofitable.  She was shown the           
          documents relating to the investment in Vulcan and understood               
          that it would result in substantial tax savings.  She was also              
          aware of the large deductions taken on the returns for the audit            

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