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Under the Price approach, a spouse’s knowledge of the
transaction underlying the deduction is not irrelevant; the more
a spouse knows about a transaction, the more likely it is that
she will know or have reason to know that the deduction arising
from that transaction may not be valid. Price v. Commissioner,
887 F.2d at 963 n.9; see Hayman v. Commissioner, 992 F.2d at 1261
(citing Price).
a. Education
Petitioner had a high school education.
b. Involvement in Financial Affairs
Petitioner argues that she was not involved in the family’s
financial affairs. Being a homemaker, being focused on family
affairs, and lacking sophistication in financial affairs does not
relieve a taxpayer of joint and several tax liability. Shea v.
Commissioner, supra at 566. Additionally, complete deference to
the other spouse’s judgment concerning the couple’s financial
affairs, standing alone, is insufficient to establish that a
spouse had no “reason to know”. Kistner v. Commissioner, supra
at 1525.
Contrary to her assertion, petitioner was involved in her
family’s financial affairs. Although she may have not played a
“dominant” role or been the initiator, all family investment
decisions were made in consultation with petitioner. Petitioner
and her husband had an agreement to reach a consensus about
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