Beverly Gordon - Page 19

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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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