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the $49,881 of adjusted gross income reported on the 1988 joint
return, the remaining $23,881 would have had to cover all the
other expenditures the Barrancos made that year: Basic living
expenses not covered by the monthly stipend (e.g., mortgage
payments, insurance, and taxes); tuition, room, and board
expenses associated with two of their children’s college
attendance (one of whom was at a private university); the
$8,000–$10,000 wedding expenses for one of their daughters; a
Ford Probe for their son; and all the other items that allowed
the Barrancos to “live well”, as petitioner states on brief. We
are unpersuaded that a reasonably prudent person in petitioner’s
position would have thought that the $49,881 of gross income
reported on the Barrancos’ joint return was sufficient to cover
all these expenditures. The record does not suggest that the
Barrancos had available to them resources other than the omitted
income to support their lifestyle.
On brief, petitioner contends that the Barrancos’ lifestyle
was not lavish or unusual, but it was simply the “lifestyle of a
hard-working orthopedic surgeon’s family.” In support of this
contention, petitioner states on brief that “orthopedic surgeons
generally do have very good incomes”. Therein lies the rub.
Although the Barrancos were enjoying the lifestyle of a “hard-
working orthopedic surgeon’s family” during the years at issue,
Dr. Barranco and petitioner were reporting much less than the
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