- 31 -
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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