Philip H. and Anna Friedman - Page 3

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            test; i.e., whether, under the circumstances, it would be                                      
            inequitable to hold her jointly liable for the deficiencies.                                   
                  The U.S. Court of Appeals for the Second Circuit reversed                                
            our holding that petitioner failed the third, or knowledge, test                               
            as to the tax shelter item only, and remanded the matter to this                               
            Court to find additional facts, if necessary, and to decide                                    
            whether petitioner has shown that, under the circumstances, it                                 
            would be inequitable to hold her jointly liable for the                                        
            deficiencies.                                                                                  
                                           FINDINGS OF FACT4                                               
                  Petitioner met Philip Friedman in 1976 when she was hired as                             
            his secretary.  They were married in 1979, the year that Philip                                
            obtained a divorce from his prior wife.  In the course of that                                 
            divorce, Philip gave almost everything he owned to his first                                   
            wife.  Petitioner was a young widow with two small children and                                
            depleted savings at the time of her first husband's death.                                     
            Petitioner had only a few assets when she married Philip,                                      
            including a cooperative residence and an automobile.                                           
                  When petitioners were first married, they lived in a rented                              
            apartment in New York, New York, with petitioner's two daughters,                              


                  4 By this reference, the facts found in Friedman v.                                      
            Commissioner, T.C. Memo. 1993-549, are incorporated to the extent                              
            that they are in accord with the opinion of the U.S. Court of                                  
            Appeals for the Second Circuit, which affirmed in part and                                     
            reversed in part our decision.  We repeat some of these findings                               
            here, as relevant to the issue now before us.  The parties have                                
            agreed that we may proceed to find facts and decide this matter                                
            on remand based on the existing record and the briefs that have                                
            been filed in this Court by the parties.                                                       



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