Joan Walters, f.k.a. Joan Gherman, and Henry Gherman - Page 31

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                 Net losses reported                                                  
               Year          ShariCraig   J. Gherman Productions                      
               1984           $30,105               -                                 
               1985            37,045            $46,825                              
               1986             4,703             65,567                              
          In signing the joint tax returns, Ms. Walters concerned herself             
          only with how much Mr. Gherman was earning.  Although Ms. Walters           
          was aware of the grand jury investigation of Mr. Gherman, the Tax           
          Court cases, and the $800,000 tax lien against Mr. Gherman and              
          her, she did not review the entire return.  She relied on Mr.               
          Gherman's assurances that their income tax returns accurately               
          reflected their income.                                                     
               Mr. Gherman filed separate returns for tax years ended 1987            
          and 1988.  His return for tax year ended 1987 was filed on July             
          25, 1988.  His return for tax year ended 1988 was filed on                  
          October 30, 1989.  On the separate returns filed for years ended            
          1987 and 1988, Mr. Gherman reported Form W-2 wages, income and              
          FICA tax withholding, gross income, itemized deductions, and                
          taxable income as follows:                                                  
          Form                       Gross      Itemized        Taxable               
          Year    W-2 Wages    Withholding    income     deductions       income      
                                                                                     
          1987    $395,810       $48,714     $416,333     $268,262       $146,171     
          1988     122,067        37,626      122,067         -           117,617     
          On the separate return he filed for year ended 1987, Mr. Gherman            
          reported that he had paid interest to FIP in an amount totaling             
          $126,075.  Mr. Gherman claimed the standard deduction on the                
          separate return that he filed for year ended 1988.  Additionally,           





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