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Petitioner was aware of all these expenditures. Although
she may not have been aware of the exact dollar amounts of some
of these expenditures, we believe she was generally aware of what
things cost. After all, she had managed the family’s personal
finances for the first 15 years of the Barrancos’ marriage.
Throughout the years at issue, she managed the monthly stipend
that she used to pay for the family’s groceries, clothing, and
incidental expenses. She also maintained her own credit card
account. She participated in discussions with Dr. Barranco about
their sizeable real estate acquisitions. She had completed a
year of nursing school.
It is true that petitioner was excluded from Dr. Barranco’s
business affairs and was unaware of his fraudulent tax scheme.
These considerations weigh in petitioner’s favor. Nevertheless,
in light of the totality of facts and circumstances, petitioner
has failed to convince us that a reasonably prudent person in her
position at the time she signed the return for each year at issue
would not have had reason to know that the family expenditures
greatly exceeded reported income.
For example, in 1988 the Barrancos reported adjusted gross
income of $49,881, omitting gross income of $467,012. That same
year, petitioner received from Dr. Barranco monthly stipends
totaling at least $26,000 to cover household expenses and
Christmas gifts. In order for the Barrancos to have subsisted on
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