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Petitioner did, however, enjoy the benefits of traveling to
resorts in connection with gambling activities, and some of that
travel was lavish. The amount of travel was about the same,
before, during, and after the tax years for which the grossly
erroneous deductions were claimed.
Philip's reported gross income, without considering
deductions or the grossly erroneous amounts, ranged from a low of
$297,982 to a high of $1,264,674 from 1981 through 1985. The
record reflects that his reported income in other years was
similar in amount. His income fluctuated due to the nature of
his business activity--mortgage broker. That amount of income
would have provided petitioners with a high standard of living
without considering the tax savings generated by the tax shelter
in question. A substantial portion of the tax savings was likely
consumed by Philip's gambling losses. About $700,000 of tax
savings is attributable to the grossly erroneous deductions
generated by the subject tax shelter. During the same period,
Philip's gambling activity consumed as much as $650,000. In
subsequent years, Philip's gambling activity appears to have
increased, and his losses also likely increased, ultimately
ending in the conflict with petitioner that led to separation
and, allegedly, to divorce. Our record does not reflect whether
petitioner and Philip were actually divorced, but references to
the divorce appear in the appellate briefs connected with this
case. We are also unaware of the ultimate divorce settlement,
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