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In determining whether petitioner had reason to know of the
1979 deficiency, relevant factors to consider include: (1)
Petitioner’s level of education; (2) petitioner’s involvement in
the family business and financial affairs; (3) the presence of
expenditures that appear lavish or unusual when compared to her
family’s past levels of income, standard of living, and spending
patterns; and (4) her husband’s evasiveness and deceit concerning
the couple’s finances. See Kistner v. Commissioner, supra at
1525; Stevens v. Commissioner, supra at 1505. In addition to the
foregoing factors, in the case of a deficiency attributable to
erroneous tax shelter deductions, a tax return setting forth
“dramatic deductions” generally will put a reasonable taxpayer on
notice that further investigation is warranted. A requesting
spouse who has a duty to inquire but does not do so will fail the
“no reason to know” requirement of section 6015(b)(1)(C) and be
precluded from obtaining relief under section 6015(b). See
Hayman v. Commissioner, 992 F.2d 1256, 1262 (2d Cir. 1993), affg.
T.C. Memo. 1992-228; Mora v. Commissioner, 117 T.C. 279, 289
(2001); Cohen v. Commissioner, T.C. Memo. 1987-537; Levin v.
Commissioner, T.C. Memo. 1987-67; see also Kistner v.
Commissioner, supra at 1527; Stevens v. Commissioner, supra at
1506; Bokum v. Commissioner, supra at 148-149.6
6 Sec. 1.6015-2(c), Income Tax Regs., is not applicable to
this case, as petitioner’s Form 8857 seeking relief under sec.
(continued...)
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