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expenses related to remodeling their house and building the pool,
expenses with which Linda had no familiarity and thus no basis
for comparison,7 the $30,000 difference was not enough for Linda
to suspect that Jerry was keeping income off their returns. See
Pietromonaco, 3 F.3d at 1347 (requesting spouse had no reason to
know when expenses were less than twice reported income). Thus,
we find that a reasonable person in Linda's position would not
suspect that something was going on.
We note that we compared the aggregate expenses and income
from 1990 through 1992. See supra note 6 (comparing expenses and
income for 1993). This raises a potential issue unaddressed by
either party--whether for any one year those extra expenses were
so out-of-whack that they should have triggered the duty of
inquiry. Our own rough calculation is that in 1991, the Haltoms’
adjusted gross income of $51,901 was less than half of their
6(...continued)
did not have access. He also gave Linda an additional $30,000
that she deposited into the joint checking account. These
amounts equal roughly $275,000. We exclude $40,000 of payments
for his cars which Linda did not know about to arrive at
$235,000. The income the Haltoms reported for those 3 years was
$205,828.
In 1993, the Haltoms reported $124,976 in adjusted gross
income on their tax return, while the total Mr. Haltom embezzled
was $21,652; the amount embezzled was so small compared to their
AGI that it would have passed unnoted amidst all their legitimate
income that year.
7 See Ferrarese, T.C. Memo. 1993-404 (neither wife nor many
other recipients of Broadway tickets from husband knew how
expensive they were).
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