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petitioner’s position would have been put on notice by
Mr. Ohrman’s evasion and deception with respect to the Dean
Witter account statements. Petitioner was well aware of the
extent of Mr. Ohrman’s past gambling and that he needed access to
money in order to continue gambling. Even though petitioner had
knowledge of these facts, she did not keep close watch over the
Dean Witter account. Although petitioner also suffered difficult
personal circumstances during 1999, she was able to retain
control of other aspects of the family finances. Therefore, when
we consider the entire record of this case, we conclude that
petitioner has not established that she had no reason to know of
the understatement when she signed the joint 1999 return.
We also conclude that petitioner has not satisfied the
requirements of subparagraph (D) of section 6015(b)(1). Taking
into account all the facts and circumstances of petitioner’s
case, it is not inequitable to hold her liable for the 1999 tax
deficiency because the tax-avoidance purpose of the separation
agreement is apparent from the evidence. First, a proposed tax
liability of nearly $43,000 prompted petitioner to meet with
Rackner for advice in early June 2001. Second, petitioner told
Rackner about the proposed tax deficiency during this meeting,
and Rackner informed her that relief from joint and several
liability might be available. Third, with the knowledge that
relief from joint and several liability might be available to
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