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as well as monthly expenses of (a) $3,000 for the mortgage loan
and maintenance on the Lincoln Plaza residence, (b) $325 for
garage space, and (c) $460 for the lease of a car.
Mr. Gordon repaid Ms. Gordon at least $14,240 of the house-
hold expense loans by allowing her to retain a Federal income tax
refund in that amount received around July 1990 that the Gordons
claimed in their joint Federal income tax return (return) for
1989. Mr. Gordon did not repay all the household expense loans.
The Gordons' 1983 Through 1990
Returns and the IRS Examination
of Their 1986 and 1988 Returns
Mr. Gordon, who had some knowledge of the Federal income tax
laws based on conversations that he had with his colleagues and
other professionals, and Ms. Gordon, who did not have much
knowledge of those laws, filed a joint return for each of the
years 1983 through 1990 and amended returns for 1986 and 1988.
With the exception of the 1990 return which was prepared by
Bonnie Wolpe (Ms. Wolpe), all of those returns were prepared by
B&S. The date April 15, 1987, appeared next to the signature
line in the Gordons’ 1986 return. The original return that the
Gordons filed for 1988 was destroyed by the IRS as part of its
record retention policy.
Ms. Gordon knew that she was obligated to file returns and
that B&S and Ms. Wolpe, respectively, prepared the Gordons' 1983
through 1989 returns and the 1990 return. Ms. Gordon partici-
pated in the preparation of those returns by providing Mr. Gordon
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