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offered therein. Alt v. Commissioner, 119 T.C. 306, 313 (2002),
affd. 101 Fed. Appx. 34 (6th Cir. 2004).
Respondent argues that Mrs. Kosinski has failed to meet the
requirements of subparagraphs (C) and (D) of section 6015(b)(1).
Petitioners argue that Mrs. Kosinski meets the requirements of
section 6015(b)(1)(C) because she had no actual knowledge of
improper deductions taken on petitioners’ tax return and because
she did not benefit from the improper deductions “because of the
volume of income on the tax return.” Petitioners urge the Court
to consider “how a reasonable person would react to a 1997 tax
return where $1,392,874.00 of taxable income is reported and
$521,305.00 of tax is paid, knowing that her spouse had withdrawn
large amounts of cash from the bank.” We understand petitioners’
argument to be that Mrs. Kosinski was not capable of
understanding that excessive costs of good sold and deductions
were improperly claimed on their tax return for 1997 because
there was too much money involved overall for her to notice the
discrepancy. Given Mrs. Kosinski’s education and employment
history, as well as her substantial and active role in the cash
structuring transactions, we are not persuaded by this argument.
Petitioners also argue that Mrs. Kosinski was unaware of any
necessary increase in petitioners’ income due to the $21,252 of
expenses related to improvements to petitioners’ home that was
paid out of T.J. Construction’s account and deducted as business
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