- 55 -
so as to permit her to inquire into the appropriate tax treatment
of such transactions. See Bokum v. Commissioner, 94 T.C. at
148.26 As also discussed above, at the time petitioner signed
the 1982 joint tax return, she was not even aware of Mr.
Korchak’s Madison Recycling investment, let alone the circum-
stances of the transactions in which Madison Recycling engaged
that resulted in Madison Recycling’s erroneously claimed $704,111
loss and erroneously claimed $7 million basis for investment tax
credit purposes and business energy investment tax credit pur-
poses.27
On the record before us, we find that a reasonably prudent
taxpayer under petitioner’s circumstances at the time of signing
the 1982 joint tax return would not have had a duty to investi-
gate further whether the tax liability stated in that return was
erroneous.28
26See also Hillman v. Commissioner, T.C. Memo. 1993-151.
27See supra note 23.
28The Court has held that a requesting spouse may satisfy a
duty to inquire by questioning his or her spouse about the
accuracy of a joint tax return and receiving a plausible explana-
tion. See, e.g., Foley v. Commissioner, T.C. Memo. 1995-16;
Estate of Killian v. Commissioner, T.C. Memo. 1987-365. Assuming
arguendo that we had found that petitioner had a duty to inquire,
she would have satisfied that duty by asking Mr. Korchak before
she signed the 1982 joint tax return about the claimed $58,089
Madison Recycling loss and the claimed Madison Recycling tax
credits of $114,407 and receiving assurance from him that that
claimed loss and those claimed credits were proper. Mr. Korchak
testified credibly, and we have found, that if petitioner had
questioned him before she signed the 1982 joint tax return, he
(continued...)
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