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Campbell never discussed the details of his trading activities
with petitioner.
Further, the totality of the circumstances indicates that
Mr. Campbell was evasive about the family finances. Although the
financial statements from petitioner’s Refco account were mailed
directly to her home address, Mr. Campbell had complete control
over the cashflow into and out of her account. He treated the
funds in petitioner’s Refco account as available for use in
offsetting losses in his other trading activities. Mr. Campbell
did not consult her when he withdrew $2.6 million from her Refco
account to invest in the London straddle. In addition, Mr.
Campbell failed to inform petitioner that their accountant warned
him that the loss resulting from the London straddle would be
disallowed. We find that Mr. Campbell’s act of depriving
petitioner of the benefit of the money earned in her account and
using it to finance a tax-motivated transaction without informing
her amounts to evasive conduct.
We next address the issue of whether there is evidence of
any substantial unexplained improvement in the family’s standard
of living. Petitioner did not benefit from the underreported
income. The money invested into the London straddle from
petitioner’s account was never returned to her. There is
evidence that the Campbells’ lifestyle began to deteriorate in
1983, and it continued to do so over the next decade. Because of
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