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Price v. Commissioner, 887 F.2d 959, 963 (9th Cir. 1989).14
Consequently, we first examine whether petitioner had reason to
know of the items giving rise to the deficiency, applying the
same factors used in Price: (1) The spouse’s level of education;
(2) the spouse’s involvement in the family’s business and
financial affairs; (3) the presence of expenditures that appear
lavish or unusual when compared to the family’s past levels of
income, standard of living, and spending patterns; and (4) the
culpable spouse’s evasiveness and deceit concerning the couples’
finances. Id. at 965. If we conclude that petitioner did not
have reason to know, we next examine whether petitioner had
knowledge of sufficient facts to impose upon her a duty to
inquire. Id. Finally, we examine whether petitioner satisfied
her duty to inquire. Id.
In this case, petitioner, who graduated from both an LPN
course and an RN course, was actively involved in the family’s
financial affairs. She was responsible for paying the family’s
household bills, wrote and signed checks drawn on the joint
checking account, and, together with Mr. Abelein, decided on and
saved for large purchases.
14We believe this to be so even though Price v.
Commissioner, 887 F.2d 959, 963 (9th Cir. 1989), involves a
different statute. For a discussion of the “reason to know”
analysis used in Price and its applicability, see Capehart v.
Commissioner, T.C. Memo. 2004-268.
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