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as they always had a beautiful home and a good car, they always
ate well, and they always went to good restaurants. She believed
that the only extravagance in their lives was the purchase of the
Camelot. Ms. Walters believed that the income reported on their
income tax returns was sufficient to support their standard of
living.
Mr. Gherman was considered extravagant in his use of money.
Petitioners entertained FIP's clients and friends at their home
at least five times each year. On occasion, petitioners gave
shopping sprees for relatives at grocery stores and at least one
department store (Macy's). The department store shopping spree
was a Mother's Day gift for Shari and a few other relatives, but
Ms. Walters was not one of the shoppers.
Dating back to 1965, petitioners had a history of making
gifts. Petitioners together made gifts to Shari, Craig, Chasyn,
and Ashtyn. During 1983 through 1987, petitioners made gifts of
$20,000 each to Shari, Craig, and Chasyn. During 1986 and 1987,
they also made gifts of $20,000 to Ashtyn. Petitioners signed
joint gift tax returns for various years on which they reported
that gifts had been made to their children and grandsons. The
Internal Revenue Service (IRS) has no record of any gift tax
returns filed by petitioners for any year. Nonetheless, the
record shows that the IRS had received gift tax returns from
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