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paperhanging or construction jobs to pay household or business
bills. Petitioner deposited these checks in a bank account in
the name of Mr. Barber or his business, for which she was an
authorized cosignatory. Other times, Mr. Barber cashed checks
for paperhanging and construction jobs at the banks of the
drawers. Petitioner did not know what happened to the money from
those transactions.
In the early years of their marriage, petitioner filed
Federal income tax returns as “married filing separately.” At a
certain point, at the behest of Mr. Barber, she stopped filing
separately in order that the two of them could jointly file, but
thereafter no returns were filed for a period of years. The
reasons given by petitioner and Mr. Barber for not filing
included poor record keeping for Mr. Barber’s business, financial
difficulties, and marital and personal stress.
In the early 1990s, the Internal Revenue Service (IRS)
contacted petitioner and Mr. Barber about their 1987 through 1991
years for which no returns had been filed. The IRS prepared
joint returns for those years, including the year at issue.
Petitioner and Mr. Barber met with an IRS examiner in connection
with these returns. Petitioner later regretted her decision to
file joint returns because, as she stated, during most of those
years, she had earned little or no income. The 1987 through 1991
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Last modified: May 25, 2011