Harvey I. Epstein and Arlene B. Epstein - Page 12

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          household expenses.  Harvey simply refused to discuss finances              
          with petitioner, and systematically excluded her from his                   
          business affairs, at least the business affairs which he                    
          conducted after he left Dreyfus in 1971, well before the relevant           
          years.  Whatever petitioner spent to indulge her own taste for              
          art and afford herself a few small luxuries, she paid for out of            
          her own meager earnings.  She in fact gave Harvey money to pay              
          "IRS taxes" out of money she received from her father, and used             
          additional funds from that source to rehab the smaller house into           
          which petitioners were forced to move after tax deficiencies                
          required them to sell their larger, more comfortable house in               
          Hewlett Park.                                                               
               (3)  Nothing in the record would lead one to believe that              
          petitioners' lifestyle was lavish either before, during, or after           
          the relevant years.  While petitioner conceded that Hewlett Bay             
          Park is considered to be a wealthy area, she also testified that            
          the couples' house on Piermont Avenue was at the "low end".  We             
          perceive no reason to question the truthfulness of her testimony            
          on this point, and respondent's counsel did not challenge it.               
               (4)  Harvey and his friend, Kreindler, repeatedly kept from            
          Arlene the truth about the tax shelter deductions that were being           
          claimed on the couple's returns for the relevant years, and                 
          systematically refused to explain the returns to Arlene or give             







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