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at issue, two or more of the Barranco children were concurrently
enrolled in college.) Two of the children attended public
universities out of State, one attended a private university out
of State, and one attended an in-State university. Dr. Barranco
paid the tuition, room, board, and related fees for each child.
Petitioner knew that Dr. Barranco was paying these expenses,
although she was unaware of the exact amounts.
III. Dr. Barranco’s Tax Evasion Scheme
For each year at issue, Dr. Barranco sought to evade income
taxes by diverting income generated by his medical practice. His
means of this attempted tax evasion was to write checks payable
to various fictitious individuals or organizations set up by his
New York City accountant. These fraudulent “payments” were then
claimed as deductions on the corporate tax return. After taking
10 percent of the fraudulent “payments” as a fee, the New York
City accountant would apply the remaining 90 percent of the
proceeds as Dr. Barranco directed, making deposits into checking
accounts and funds that Dr. Barranco could draw from as needed,
or else into an escrow account that Dr. Barranco used for
investment purposes. Dr. Barranco carried out these acts of tax
evasion without petitioner’s knowledge, consent, or acquiescence.
IV. The Barrancos’ Tax Returns
For each year at issue, petitioner and Dr. Barranco filed a
joint Federal income tax return. On these joint returns, they
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