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question the legitimacy of the deduction, or his or her tax
liability in general. Id. at 965-966; see also Guth v.
Commissioner, 797 F.2d 441, 445 (9th Cir. 1990), affg. T.C. Memo.
1987-522. If the requesting spouse is aware of sufficient facts
to put that spouse on notice as to the possibility of an
understatement, the duty of inquiry arises, which, if not
satisfied, may cause that spouse to be treated as having
constructive knowledge of the understatement. Price v.
Commissioner, supra at 965; see also Guth v. Commissioner, supra
at 445.
We believe that petitioner had reason to know of the
understatement in each subject year. While in each of those
years the Albins reported a large amount of income (but for the
shelter loss), a large loss (i.e., from the shelter), and
relatively little or no tax liability, petitioner was unconcerned
about her tax obligation and took no steps to assure herself that
the subject returns were filed properly. She did not read the
returns or even ask to see any of the records related thereto.
A reasonably prudent person in the position of petitioner, a
college educated individual, would have at least looked at the
face and signature page of each return (i.e., the front and back
of Form 1040), eyed the clearly reported items of income, loss
(from the shelter) and minimal or no tax liability, and inquired
as to the loss (from the shelter), the minimal or no tax
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