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had decided that financial matters were his sole re-
sponsibility and did not seek to discuss tax matters or
investments with Helen. When he had questions, he
discussed issues with his accountant and with his fi-
nancial advisor, trusting upon their judgment.
As mentioned above, Helen Korchak first became
aware of Ernest’s investment in Madison Recycling in
1988, when Ernest showed her a February 16, 1988 notice
from the Internal Revenue Service * * *. Prior to that
time, she had no knowledge or awareness that Ernest
claimed a loss from his Madison recycling investment in
1982. She admittedly did not review the Form 1040
individual income tax return when it was presented to
her for signing where marked. It had been prepared by
Ernest and a certified public accountant, and she
trusted her husband’s judgment. It was not until Er-
nest showed Helen the notice from the Internal Revenue
Service in 1988 that she became aware of the tax loss
claimed and the refund generated. She never received
any financial benefit from the refund. Ernest used the
entire refund proceeds as a loan or capital contribu-
tion for a new startup company, Riverside Polymer Sys-
tems, Inc., that filed for bankruptcy in 1989 and was
ultimately liquidated. In total, not known to Helen
until after the fact, Ernest loaned or invested
$700,000.00 by the time it was ultimately lost in bank-
ruptcy.
Helen Korchak is eligible for retirement. She has
a retirement fund that she has long contributed to.
Unfortunately, she is now faced with the prospect of a
horrific federal tax liability in excess of $2 million,
with interest and penalties. Should she be punished
for being a loving, trusting wife, a homemaker and
mother who also had career aspirations and a keen in-
terest in science? Had she asked any questions about
Madison Recycling, her husband and the accountant would
have reassured her. She never benefited from her hus-
band’s decision to invest in Madison Recycling. The
1982 tax refund was lost as part of her husband’s in-
vestment in a new startup company. Her husband con-
trolled the family’s finances and tax return prepara-
tion. All the facts recited herein concerning the 1982
tax return were not learned by Mrs. Korchak until 1988
through the present. Considering the equities in this
matter, it would be unduly harsh to find Mrs. Korchak
liable for the 1982 tax in question. It would be egre-
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