- 60 -
On the record before us, we find that petitioner has failed
to establish that she did not know, and had no reason to know, of
the transactions relating to Laurel Valley Farms, the Three Crowns
Hotel, Azure Tides, Inc., Georgetown Square, and the Three Crowns
Hotel Back Court that we assume arguendo gave rise to a portion or
all of an understatement for one or more of the taxable years
1989, 1991, 1992, and 1993. See Jonson v. Commissioner, 118 T.C.
at 115-116; Bokum v. Commissioner, 94 T.C. 126, 150-151 (1990),
affd. 992 F.2d 1132 (11th Cir. 1993). On that record, we further
find that petitioner has failed to establish that a reasonably
prudent taxpayer in her position at the time she signed each of
the joint returns for the taxable years 1989, 1991, 1992, and 1993
could not have been expected to know that each of those returns
contained an understatement of tax or that further investigation
was warranted. See Hayman v. Commissioner, 992 F.2d 1256, 1261-
1262 (2d Cir. 1993), affg. T.C. Memo. 1992-228; Price v. Commis-
sioner, 887 F.2d 959, 965-966 (9th Cir. 1989), revg. an Oral
Opinion of this Court; Mora v. Commissioner, 117 T.C. 279, 289
(2001).50
49(...continued)
because before respondent issued the notice for the taxable years
1987 and 1988 petitioner and Mr. Monsour agreed to respondent’s
proposed determinations to disallow such losses.
50There is no published authority of the U.S. Court of
Appeals for the Third Circuit, the Court of Appeals to which an
appeal in this case would normally lie, setting forth that
(continued...)
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