- 15 -
See Hayman v. Commissioner, 992 F.2d 1256, 1261 (2d Cir. 1993),
affg. T.C. Memo. 1992-228; Terzian v. Commissioner, 72 T.C. 1164,
1170 (1979). Petitioner is thus deemed to have known, for
example, the amounts of taxable income and adjusted gross income
reported on the joint returns. Although the record does not
reveal with specificity the total amount of adjusted gross income
the Barrancos reported over the 10 years at issue, it does reveal
that the total amounts reported were understated by $5,878,813.
The annual shortfalls ranged from a low of $464,142 (in 1992) to
a high of $805,819 (in 1983). For the years 1987-92 (the only
years for which the record reveals the amounts of gross income
reported on the Barrancos’ joint returns), the omitted gross
income exceeded the amounts of reported adjusted gross income by
an annual average of over 670 percent. On the basis of the
limited evidence in the record, it appears that the pattern of
underreporting for the years 1983-86 was similar.9
What became of these large amounts of omitted income? From
the limited evidence in the record, we can only conclude that
they were used largely to finance the Barrancos’ substantial
9 The Barrancos’ 1987-92 joint returns reported total
adjusted gross income of $732,632 and omitted gross income of
$3,354,291. The record does not contain the Barrancos’ 1983-86
joint returns or otherwise reveal the amount of adjusted gross
income they reported for those years. The record does indicate,
however, that for those years the Barrancos reported total
taxable income of $164,787, while omitting gross income of
$2,524,522.
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