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Sometime during 1974, Edward was admitted to New York City
Hospital because of problems he had related to diabetes. One of
his legs was amputated during that hospital stay. Sometime while
he was hospitalized, Katherine and Jack removed all of Edward’s
property from a safe deposit box he had at Chase Manhattan Bank.
See infra for additional discussion relating to the removal of
Edward’s property from his safe deposit box. After Edward’s
release from the hospital, he moved to Ohio to live with Jack.
Edward died in Ohio on September 3, 1974. In the gypsy culture,
Edward’s money would go to a son because it was a gypsy custom
for the first-born son to inherit everything.
Respondent has no record showing that Edward or Mary ever
filed a gift tax return. Respondent has no record showing that
an estate tax return was filed for either Edward or Mary.
F. Other Facts
Frank and Katherine dealt exclusively in cash. Katherine
maintained writing tablets on which she recorded receipts. She
gave those tablets and their bills to Baptiste for use in
preparing the tax returns. There is no evidence that Katherine
or Baptiste presented any of those tablets or bill receipts to
respondent during the audit or afterward.
Frank loved to gamble. He frequently went to greyhound
races in Seminole County, Florida. Once or twice a year, at
Katherine’s expense, the Johnson family, including spouses and
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