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years that were attributable to the Vulcan investment, and she
was made aware of the tax risks by the Vulcan subscription
agreement, with its reference to tax risks, and (for 1982) by the
May 13, 1982, newspaper article confirming Vulcan’s status as an
“aggressive” and “questionable” tax shelter subject to potential
IRS attack. For all of those reasons, it is clear that Barbara
had significant involvement in the family’s financial affairs.
In particular, she had reason to know of the tax benefits and
potential tax risks associated with the investment in Vulcan.
(c) Expenditure Levels, Standard of Living, Etc.
There is no evidence that the tax savings generated by the
investment in Vulcan resulted in lavish or unusual expenditures
benefiting Barbara when compared to prior years’ spending
patterns. That factor is not determinative, however, as to
whether Barbara benefited from such tax savings. See Hayman v.
Commissioner, supra at 1263. In this case, it is clear that the
tax savings were immensely beneficial to both David and Barbara.
For each of the audit years, the losses sheltered in excess of 80
percent of David’s income. The losses, thus, reduced the
Jonsons’ taxes and contributed to their ability to pay for their
children’s college educations and still maintain their normal
standard of living. As Barbara freely admitted in filling out
the innocent spouse questionnaire sent to her by petitioners’
counsel, “IRS tax rates for the upper brackets were very high and
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