- 30 -
them. Although Ms. Walters did not review their joint tax
returns in depth, before she signed them she sought, and
received, assurances from Mr. Gherman that everything was
correctly reported on the returns because she did not want to
have any more trouble with the IRS. She knew before signing the
returns that they had been prepared by a C.P.A. and reviewed by
attorneys who specialized in tax matters.
On the joint returns filed for years ended 1984 through
1986, petitioners reported Form W-2 wages, income and FICA tax
withholding, gross income, itemized deductions, and taxable
income as follows:
Form Form
W-2 wages Withholding W-2 wages Withholding Gross Itemized Taxable
Year (husband) (husband) (wife) (wife) income deductions income
1984 $355,500 $47,178 $87,724 $19,597 $477,197 $209,343 $262,254
1985 512,040 48,374 - - 498,634 360,411 134,528
1986 532,201 48,586 - - 533,901 445,374 85,177
On the returns for those years petitioners reported that they
paid interest to FIP or the FIP Pension Plan as follows:
Year Interest expense
1984 $67,325
1985 143,344
1986 161,422
Additionally, on the returns for those years, petitioners
reported net losses from ShariCraig and J. Gherman Productions,
an S corporation, as follows:
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