                        T.C. Memo. 2010-199



                      UNITED STATES TAX COURT



                  WAYNE C. EVANS, Petitioner v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent

                 MADELYN F. EVANS, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 24498-07, 24510-07.    Filed September 13, 2010.



     Kirk A. McCarville and Philip C. Wilson, for petitioners.

     Heidi I. Hansen, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     COHEN, Judge:   In a notice sent July 27, 2007, respondent

determined deficiencies in petitioners’ Federal income taxes for

1995 and 1996 of $70,311 and $196,814, respectively.   Respondent

also determined penalties for fraud under section 6663 of
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$52,733.25 and $147,610.50 against Wayne C. Evans (Evans) for

1995 and 1996, respectively.    The issues for decision are whether

petitioners had unreported income resulting in an underpayment of

tax for each year; whether the underpayment of tax for each year

was due to fraud on the part of Evans, justifying the penalty and

negating the bar of the statute of limitations; whether

petitioners are entitled to any deductions not allowed by

respondent; and whether Madelyn F. Evans (Ms. Evans) is entitled

to relief under section 6015. Unless otherwise indicated, all

section references are to the Internal Revenue Code (Code) in

effect for the years in issue, and all Rule references are to the

Tax Court Rules of Practice and Procedure.

                         FINDINGS OF FACT

     Some of the facts have been stipulated between Evans and

respondent, and the stipulated facts are incorporated in our

findings by this reference.    Ms. Evans declined to stipulate,

asserting that she had no knowledge of the relevant facts.    She

did not contradict any of the facts in the stipulation between

Evans and respondent, and the stipulated facts were established

with respect to her, pursuant to a motion, order to show cause,

and order following the procedures specified in Rule 91.

Petitioners resided in Arizona at the time that they filed their

petitions.   At all material times, they were married to each

other and resided together.
                                - 3 -

     From 1986 through the years in issue, petitioners resided on

property on West Calle Concordia in Tucson, Arizona (the

Concordia property).   The Concordia property was purchased by

Stephen and Rosalie Olsen (the Olsens) in 1986 and was refinanced

in 1989 with a loan of $172,194.71 from Household Finance.

Petitioners did not pay rent to the Olsens for their use of the

Concordia property, but during 1995 they made payments on the

Household Finance mortgage and otherwise to prevent foreclosure

on the Concordia property.   The sources and amounts of the

payments are further described below.

The Farming Authority and Huntington Construction

     On August 22, 1995, Evans entered into an agreement with the

Tohono O’odham Farming Authority (the Farming Authority)

pertaining to Evans’ employment as the full-time general manager

of the Farming Authority.    Evans had oversight responsibility for

the approval and disbursement of Farming Authority funds.     The

agreement provided, among other things, that

          The General Manager shall be responsible for
     causing the accounts of the Authority to be maintained
     in accordance with an accounting system established by
     the Authority’s accountant or accounting firm. The
     records and accounts of the Authority will be available
     at all reasonable times for inspection and examination
     by authorized officers of the Authority and the
     Council. The Board may require special examinations to
     be made at any time. The General Manager shall arrange
     for an audit to be made at the close of each business
     year by a certified accounting firm approved by the
     Board.
                               - 4 -

     Evans’ employment agreement specifically prohibited him from

transacting business on the Farming Authority’s behalf with any

company in which he held a direct or indirect interest.   By

transacting business with such a company, Evans would have a

conflict of interest.   Evans’ failure to disclose to his employer

that he was conducting Farming Authority business with a company

in which he had such an interest would be a breach of the

fiduciary duty he owed to his employer.   Any such conduct by

Evans would be grounds for termination.

     Huntington Construction, Inc. (Huntington Construction), was

an Arizona corporation effectively operated and controlled by

Evans during 1995 and 1996.   Evans concealed from the Farming

Authority his ownership, operation, and control of Huntington

Construction.   Evans caused 22 checks totaling $449,005 in 1995

and 28 checks totaling $1,148,208 in 1996 to be paid to

Huntington Construction from the Farming Authority.

     Willie Gilbert (Gilbert) was paid by Evans to sign checks

drawn on the Huntington Construction account to conceal Evans’

ownership and control of Huntington Construction.   Checks were

drawn on Huntington Construction’s bank account to pay for Willie

Gilbert’s travel expenses, including one or more trips to Indiana

where Gilbert had family.   Records were not maintained to

substantiate the business purpose of Gilbert’s travel.    Payments

to Gilbert and other persons for services to Huntington
                                - 5 -

Construction were not reported to the Internal Revenue Service by

Huntington Construction.

     On September 8, 1997, the Tohono O’odham Nation filed a

complaint against Evans, Ms. Evans, Willie Gilbert, Jane Doe

Gilbert, Stephen Olsen, Rosalie Olsen, Dawson Riley, Jane Doe

Riley, Huntington Construction, Western Pacific Construction,

Inc., and Voice of God Recordings, Inc., in the U.S. District

Court for the District of Arizona (the District Court) (the civil

case).

     In June 2000, the civil case was settled with an agreement

providing in part that Voice of God Recordings would pay $820,000

to the Tohono O’odham Nation.   (Evans had caused the sum of

$820,000 to be paid by Huntington Construction to Voice of God

Recordings on behalf of petitioners, as further described below.)

Ms. Evans was a party to the settlement agreement.

     On September 22, 1999, Evans was indicted in the District

Court on 18 counts of embezzlement and theft from an Indian

tribal organization; theft or bribery concerning programs

receiving Federal funds; wire fraud; and frauds and swindles.

The first count of the indictment alleged, in part, that

     beginning on or about December, 1994, and continuing
     through on or about September, 1997, in the District of
     Arizona, Wayne C. Evans, * * * did embezzle, steal,
     knowingly convert to his use or the use of another, and
     did willfully misapply and permit to be misapplied,
     approximately $1.597 million of the moneys, funds,
     credits, goods, assets and other property belonging to
     or intrusted to the custody or care of the Tohono
                              - 6 -

     O’odham Indian Nation, by causing those funds to be
     paid to himself through use of Huntington Construction,
     an entity which he secretly and covertly controlled.

     On October 12, 2001, an Information was filed in the

District Court charging Evans with filing a false tax return for

1996 in violation of section 7206(1).   On October 12, 2001,

Evans, represented by counsel, entered into a plea agreement in

which he pleaded guilty to the first count of the indictment and

to the information, specifically admitting facts establishing his

guilt beyond a reasonable doubt.   The facts admitted included the

following:

          Huntington Construction, Inc. was an Arizona
     corporation. Beginning at least as early as 1985,
     Wayne C. Evans effectively operated and controlled the
     affairs of Huntington Construction, Inc.

          Huntington Construction performed work for the
     Farming Authority while Wayne C. Evans was the Farming
     Authority’s general manager and during the time Evans
     controlled its affairs. Between March, 1995 and
     August, 1996, the Farming Authority paid Huntington
     Construction approximately $1.597 million for work
     allegedly performed on Farming Authority projects.
     Wayne C. Evans was responsible for authorizing the
     payment of those funds. Wayne C. Evans failed to
     disclose and concealed from the Farming Authority that
     he effectively owned, operated and controlled
     Huntington Construction and the funds in its bank
     accounts while causing Farming Authority funds to be
     paid to Huntington Construction.

          Once Wayne C. Evans had effected the transfer of
     funds to Huntington, Wayne C. Evans controlled the use
     of those funds and used them for personal purposes.
     Once the funds were deposited to Huntington’s bank
     accounts, Evans concealed his control of those funds by
     directing third-party nominees to sign checks and make
     payments from the Huntington accounts.
                               - 7 -

          On or about January 2, 2001, in Tucson, Arizona,
     Wayne C. Evans filed and subscribed to a joint U.S.
     Individual Income Tax Return for the calendar year
     1996. Wayne C. Evans signed the return under penalties
     of perjury. The return understated Wayne C. Evans’
     total income for the 1996 tax year, in that Wayne C.
     Evans knowingly failed to include the above-mentioned
     monies from tribal funds during the 1996 calendar year.

     A judgment of conviction pursuant to Evans’ guilty plea was

entered September 12, 2002.   Evans was sentenced to 15 months in

prison followed by 3 years of supervised release and was ordered

to pay restitution of $138,935 to the Tohono O’odham Nation.     The

restitution amount was arrived at by taking the total amount of

money Evans illegally received reduced by the $820,000 Voice of

God Recordings paid in settlement of the civil suit.

     On three occasions, in 2004, 2008, and 2009, Evans attempted

to have the restitution provision in his sentence vacated, but

the District Court and the Court of Appeals for the Ninth Circuit

held that he was barred by his plea agreement from contesting the

sentence.

     No income tax return was filed for Huntington Construction

for 1995 or 1996.   In January 2001, petitioners filed joint

individual income tax returns for 1995 and 1996 on which they

reported $12,204 and $7,210 of income from Huntington

Construction for 1995 and 1996, respectively.   Petitioners did

not provide bank records reflecting income or expenses or

receipts substantiating their expense deductions to their return

preparer when the returns were prepared.   The returns did not
                                - 8 -

report all of the income petitioners received as a result of

payments from the Farming Authority to Huntington Construction

and disbursements from Huntington Construction to or for

petitioners.

     After examining records of payments made by the Farming

Authority to Huntington Construction and checks written on the

bank accounts of Huntington Construction, respondent determined

that petitioners had unreported income, that certain business

expenses and personal itemized deductions were allowable, and

that other checks represented payments for the personal benefit

of petitioners and constituted taxable income to them.    The

personal itemized deductions allowed included charitable

contributions to Voice of God Recordings.

     Checks drawn on Huntington Construction’s account payable to

its bank for cashier’s checks or for cash totaled $39,760.29 in

1995 and $1,174,555.79 in 1996.

Specific Items of Unreported Income

     On May 23, 1995, funds were withdrawn from Huntington

Construction’s bank account and used to purchase cashier’s checks

to Voice of God Recordings for $100,000 and to Coots Funeral Home

for $5,980.    At the same time, $700 in cash was withdrawn from

the account.   Coots Funeral Home provided funeral services for

Evans’ brother.
                              - 9 -

     On May 23, 1995, funds were withdrawn from the Huntington

Construction account to purchase a $2,000 cashier’s check payable

to Western Pacific Construction, Inc. (Western Pacific).    Western

Pacific (sometimes referred to in the stipulation of facts as

Pacific Western) was an Arizona corporation owned and controlled

by petitioners.

     On July 26, 1995, funds were withdrawn from the Huntington

Construction account to purchase a $16,025 cashier’s check

payable to the Olsens.

     On October 4, 1995, $11,084 was withdrawn from the

Huntington Construction account to purchase a vehicle for one of

petitioners’ children.

     On December 14, 1995, funds were withdrawn from the

Huntington Construction account to purchase a $1,500 cashier’s

check payable to the widow of Evans’ brother.

     On January 30, 1996, funds were withdrawn from the

Huntington Construction account to purchase a $159,422.79

cashier’s check payable to Household Finance to be applied to the

mortgage on the Concordia property.   In conjunction with the

payment, the Concordia property was transferred from the Olsens

to the Campo Bello Irrevocable Trust.   Petitioners are the

grantors of the Campo Bello Irrevocable Trust and, along with

their children, are the beneficiaries of the trust.
                                - 10 -

     On August 15, 1996, funds were withdrawn from the Huntington

Construction account to purchase two $1,000 cashier’s checks used

to pay personal debts of petitioners.

     In September 1996, funds were withdrawn from the Huntington

Construction account to purchase $820,000 and $70,000 cashier’s

checks payable to Voice of God Recordings on behalf of

petitioners.

     During 1995 and 1996, Western Pacific received income

totaling $83,009.92 and $7,603.12.       Certain of the income was

received from the Farming Authority, and much of it was received

from Huntington Construction.    No income tax returns were filed

for Western Pacific, and petitioners did not include any income

from Western Pacific on their return for 1995 or 1996.

     On February 1, 1995, funds totaling $26,756.54 were

withdrawn from Western Pacific’s bank account to make payments by

or on behalf of petitioners to prevent a foreclosure on the

Concordia property.    During the years in issue, 43 checks written

on Western Pacific’s bank account were payable to petitioners or

members of their family or to cash.       Ms. Evans signed most of the

checks written on the Western Pacific account.

Ms. Evans’ Liability

     Petitioners’ Federal tax returns for 1995 and 1996 were

filed in January 2001.   Ms. Evans was aware of Evans’ indictment

and arrest at the time that she signed the joint returns, and she
                              - 11 -

knew or should have known of the underreporting of income and

understatement of taxes on those returns.    She signed checks on

the Western Pacific account by which that corporation’s income

was distributed to petitioners or to members of their family; she

knew or should have known that such income had not been reported

by Western Pacific or by petitioners on their returns.    She

received the benefits of the unreported income and the resulting

underpayment of taxes to the same extent as Evans.

                              OPINION

     Respondent relies on section 6501(c)(1) as a defense to

petitioners’ assertion of the bar of the statute of limitations

and, therefore, must prove that petitioners’ 1995 and 1996 tax

returns were false or fraudulent with the intent to evade tax.

Because the question of fraud is determinative as to the

statutory period of limitations as well as the penalty under

section 6663 against Evans, we first discuss the evidence and our

conclusions with respect to fraud.     Respondent has not alleged

fraud by Ms. Evans.   However, proof of fraud against either

spouse prevents the running of the period of limitations as to

both spouses with respect to the income tax deficiencies on joint

returns.   Hicks Co. v. Commissioner, 56 T.C. 982, 1030 (1971),

affd. 470 F.2d 87 (1st Cir. 1972).

     The penalty in the case of fraud is a civil sanction

provided primarily as a safeguard for the protection of the
                               - 12 -

revenue and to reimburse the Government for the heavy expense of

investigation and the loss resulting from the taxpayer’s fraud.

Helvering v. Mitchell, 303 U.S. 391, 401 (1938); Sadler v.

Commissioner, 113 T.C. 99, 102 (1999).     The Commissioner has the

burden of proving, by clear and convincing evidence, an

underpayment for each year in issue and that some part of the

underpayment for each of those years is due to fraud.    Sec.

7454(a); Rule 142(b).   If the Commissioner establishes that any

portion of the underpayment is attributable to fraud, the entire

underpayment is treated as attributable to fraud and subjected to

a 75-percent penalty, unless the taxpayer establishes that some

part of the underpayment is not attributable to fraud.    Sec.

6663(a) and (b).   The Commissioner must show that the taxpayer

intended to conceal, mislead, or otherwise prevent the collection

of taxes.    Katz v. Commissioner, 90 T.C. 1130, 1143 (1988).

     The existence of fraud is a question of fact to be resolved

upon consideration of the entire record.     King’s Court Mobile

Home Park, Inc. v. Commissioner, 98 T.C. 511, 516 (1992).       Fraud

will never be presumed.    Id.; Beaver v. Commissioner, 55 T.C. 85,

92 (1970).   Fraud may, however, be proved by circumstantial

evidence and inferences drawn from the facts because direct proof

of a taxpayer’s intent is rarely available.     Niedringhaus v.

Commissioner, 99 T.C. 202, 210 (1992).     The taxpayer’s entire

course of conduct may establish the requisite fraudulent intent.
                               - 13 -

Stone v. Commissioner, 56 T.C. 213, 223-224 (1971).     Fraudulent

intent may be inferred from various kinds of circumstantial

evidence, or “badges of fraud”, including the consistent

understatement of income, inadequate records, implausible or

inconsistent explanations of behavior, concealing assets, and

failure to cooperate with tax authorities.     Bradford v.

Commissioner, 796 F.2d 303, 307 (9th Cir. 1986), affg. T.C. Memo.

1984-601.   Dealing in cash is also considered a “badge of fraud”

by the courts because it is indicative of a taxpayer’s attempt to

avoid scrutiny of his finances.   See id. at 308.    Additional

“badges of fraud” include handling one’s affairs to avoid making

the records usually made in transactions of the kind.        Spies v.

United States, 317 U.S. 492, 499 (1943).     Evidence of fraud also

includes a taxpayer’s use of a business entity to cloak the

personal nature of expenses.   See Romer v. Commissioner, T.C.

Memo. 2001-168.

     Although Evans’ conviction for subscribing a false Federal

tax return does not collaterally estop him from denying that he

fraudulently understated petitioners’ income tax liability, his

conviction is evidence of fraudulent intent.    See Wright v.

Commissioner, 84 T.C. 636, 643-644 (1985).     Evans contends that

he entered into the plea agreement solely to protect Ms. Evans in

the face of a threat that she might be arrested.    The details

alleged in the counts of which he was convicted and admitted in
                              - 14 -

the plea agreement are specific and convincing evidence of fraud,

and he has not raised any doubt that the facts admitted are

accurate.   His motivation in entering into the plea agreement is

irrelevant and in no way undermines the reliability of the

overwhelming evidence of unreported income accompanied by other

badges of fraud.

     Petitioners also contend that the amounts paid to Huntington

Construction from the Farming Authority were for work before the

time that Evans became general manager and that, therefore, those

amounts were not embezzled from the Farming Authority in breach

of his duties.   Whether petitioners’ business performed services

for the Farming Authority before the time that Evans became the

general manager is irrelevant in this case.   The payments

received by Huntington Construction and used for petitioners’

personal purposes during the years in issue were income to them

during those years.   The failure to report that income resulted

in underpayments of taxes and is clear and convincing evidence of

fraud.

     Respondent has thus shown by clear and convincing evidence

that petitioners received unreported income during each of the

years in issue, at least in the amounts withdrawn from Huntington

Construction and Western Pacific as set forth in our findings.

Once the receipt of income is shown it is petitioners’ burden to

come forward with explanations of why receipts are not taxable or
                               - 15 -

of offsetting deductions.    See, e.g., Brooks v. Commissioner, 82

T.C. 413, 432-433 (1984), affd. without published opinion 772

F.2d 910 (9th Cir. 1985).    Respondent does not have the burden of

disproving petitioners’ entitlement to deductions, even in a

criminal case where the Government bears a heavier burden of

proof.   See, e.g., Elwert v. United States, 231 F.2d 928, 933-936

(9th Cir. 1956).

     Petitioners did not produce any records to substantiate

their business expenses.    Under the circumstances, we are

entitled to infer that they did not maintain required records or

that any records that were maintained would be unfavorable to

their claims.   See Wichita Terminal Elevator Co. v. Commissioner,

6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th Cir. 1947).

Petitioners suggest that respondent had a burden to show that

“Evans possessed a requisite amount of education and business

experience or sophistication to keep such records.”   Although a

taxpayer’s education and experience may be considered in

determining intent, we are satisfied that the complicated scheme

engaged in by Evans is clear and convincing evidence that he had

the “requisite * * * business experience or sophistication” and

that he knew that records are required to substantiate

deductions.   Under the management agreement with the Farming

Authority, Evans was to maintain records and accounts, among
                                - 16 -

other duties.   Thus his failure to keep or to produce records may

be regarded as concealment.

     Evans admitted in the plea agreement that he concealed his

ownership of Huntington Construction from the Farming Authority.

Petitioners argue that disguising assets or embezzlement,

standing alone, does not establish intent to evade taxes.      These

facts taken together with other badges of fraud, however, are

clear and convincing evidence of fraudulent intent.

     Respondent refers to the untimely filing of petitioners’ tax

returns as evidence of fraud.    Petitioners argue that late

filing, as contrasted with failure to file, is not indicative of

fraud.   The returns in this case, however, were filed after

disclosure of Evans’ criminal conduct in misappropriating funds.

Returns were not filed for the entities through which the

misappropriated funds were channeled to petitioners.    Under these

circumstances, we agree with respondent.

     The evidence is clear and convincing that petitioners dealt

in large amounts of cash during the years in issue.    Petitioners’

response is to point to the paper trail on which respondent

relies; petitioners assert that the paper trail negates

fraudulent intent.   Again the evidence must be considered in the

context of the total factual record.     That petitioners’ schemes

were discovered because they did not successfully hide all

potential evidence is not an exonerating factor.    Even if some
                              - 17 -

portion of the cash was used for business expenses, the “handling

of one’s affairs to avoid making the records usual in

transactions of the kind” has long been recognized as a badge of

fraud.   Spies v. United States, 317 U.S. at 499-500; see Bradford

v. Commissioner, 796 F.2d at 308.

     Another badge of fraud in this case is the record of

implausible and inconsistent explanations of behavior.   Evans

attempts to explain away his guilty plea and plea agreement as

intended to protect his wife from arrest.   He has not shown that

the facts admitted in the plea agreement are inaccurate.    He

attempts to minimize his wrongful conduct toward the Farming

Authority by asserting that funds were owed to Huntington

Construction prior to his employment as general manager, but the

receipt of $1.597 million in 1995 and 1996 calls for more than a

generalized assertion that it was due before mid-1995.   By the

nature of the claim, corroborating documentary or witness

evidence should have been available.   Because such evidence was

not produced, a negative inference again may be drawn.   See

Wichita Terminal Elevator Co. v. Commissioner, supra at 1165.      In

any event, the failure to report the income, regardless of the

legality or illegality of its source, is the key element in this

case.
                               - 18 -

Disallowed Deductions

     As a general rule, with respect to the amounts of the

deficiencies in issue, the taxpayer bears the burden of proof.

Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79, 84

(1992); Rockwell v. Commissioner, 512 F.2d 882, 886 (9th Cir.

1975), affg. T.C. Memo. 1972-133.   That burden may shift to the

Commissioner if the taxpayer introduces credible evidence with

respect to any factual issue relevant to ascertaining the

taxpayer’s tax liability.   Sec. 7491(a)(1).   However, section

7491(a)(1) applies with respect to an issue only if the taxpayer

has complied with the requirements under the Code to substantiate

any item, has maintained all records required by the Code, and

has cooperated with reasonable requests by the Commissioner for

witnesses, information, documents, meetings, and interviews.

Sec. 7491(a)(2)(A) and (B).   For the reasons discussed above,

petitioners’ evidence is unreliable, and their claims are

unsubstantiated.   They have not satisfied the conditions for

shifting the burden of proof to respondent.

     The deductions in dispute are identified by a list of checks

that Evans generally claimed were business expenses of Huntington

Construction, including travel expenses, vehicle expenses, and

meals expenses that were not substantiated in accordance with

section 274(d).    Some disputed payments were made to petitioners’
                              - 19 -

sons.   Evans’ testimony was not corroborated by records or other

testimony, and none of the witnesses could identify specific

services petitioners’ sons performed during 1995 or 1996.   Evans

professed a lack of recollection with respect to many of the

payments.   His testimony asserting that certain payments related

to loan transactions was not supported by any documentation of

loans received or repaid.   Testimony concerning attorney’s fees

was not supported by evidence establishing that the fees were

business expenses rather than personal nondeductible expenses,

such as fees relating to the criminal case.   Business-related

litigation referred to during the testimony apparently occurred 5

or more years before the years in issue.

     Many of the items that Evans asserted were business related

were inherently personal, and the record of diversion of business

income to pay personal expenses undermines the credibility of the

generalized assertions of business purpose.   The failure to keep

adequate records, the use of cash, the absence of tax returns for

Huntington Construction and Western Pacific, the failure to turn

over records to petitioners’ return preparer, and the implausible

claims together render the uncorroborated testimony unreliable.

Petitioners have not shown any error in the deficiency

determinations for 1995 and 1996.

     Respondent has proven that the fraud penalty applies, and

petitioners have not established that any part of the
                               - 20 -

underpayments was not attributable to fraud.    See sec. 6663(b).

Respondent is not barred from assessing petitioners’ 1995 and

1996 tax deficiencies.    The penalty under section 6663 will be

upheld.

Section 6015 Relief

     Ms. Evans asserted in her petition a claim for relief from

joint and several liability for 1995 and 1996 under section 6015.

She does not qualify for relief under section 6015(c) because

petitioners were married and living together at all material

times.    Relief under section 6015(b) requires that she establish

that in signing the return she did not know, and had no reason to

know, that there was an understatement of tax attributable to

items of Evans.   See sec. 6015(b)(1)(C).   Under either section

6015(b)(1)(D) or (f), she must show that taking into account all

of the facts and circumstances, it is inequitable to hold her

liable for the deficiencies.

     At trial, Ms. Evans testified that she did not know anything

about her husband’s activities giving rise to an understatement

of tax for each year, although she signed many of the checks by

which funds were diverted to pay petitioners’ personal expenses.

We are not persuaded that she did not know or have reason to know

of the understatements.    At the time she signed the tax returns,

she knew that Evans was being prosecuted for misappropriation of

funds.    As far as the record reflects, the unreported income was
                              - 21 -

used by petitioners equally, and she has suggested no particular

facts that would support a conclusion of inequity in holding her

liable.   It is not inequitable to hold her liable for the

deficiencies on the joint returns.     We need not, therefore,

discuss the additional factors generally considered in

determining entitlement to relief under section 6015.

     We have considered the other arguments of the parties.      They

are irrelevant to our decision or lack merit justifying

discussion.   To reflect the foregoing,


                                           Decisions will be entered

                                     for respondent.
