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We must examine whether David benefited from either the
embezzlement income itself or from not paying the taxes on that
income. If he did significantly benefit, the factor weighs
against relief; otherwise (under our precedents), it weighs in
his favor. See supra note 3.
The Commissioner argues that David significantly benefited
from his wife’s embezzlement because it allowed them to continue
their free-spending lifestyle, and still have the means to buy a
larger house in 2000, the year the embezzlement ended. He also
points out that the spending did not stop after Rosalee’s
employer discovered the embezzlement, and that the Billingses
even bought three new vehicles after she was discovered. David
counters that it wasn’t Rosalee’s embezzlement that supported
their lifestyle--it was the two paychecks he earned and the
liberal use of his credit cards.
To determine whether the Commissioner erred on this point we
can trace the embezzlement income to see where it was spent and
by whom. Looking first to see where the money went, in 1999,
Rosalee deposited $71,100 into her account and withdrew about
$67,500. Of her withdrawals, $7,200 went into a savings account
she shared with David, $4,100 went toward her car, and $7,500
went toward her credit cards. While some of the remaining
$48,700 paid for their basic living expenses, David received
little marginal benefit from his wife’s extra cash. She spent
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