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knew that he had to substantiate his claimed deductions related
to American Redball with receipts, and he provided his business
receipts to his tax return preparer.
Eugene Hunner (Mr. Hunner) prepared Mr. Gagliardi’s tax
returns when Mr. Gagliardi owned American Redball. Mr. Hunner
has a B.A. in accounting and is a certified public accountant.
He worked 5 years at a national accounting firm, is two courses
shy of his master’s in tax at the University of Southern
California, and has prepared tax returns for over 30 years.
Ninety percent of Mr. Hunner’s professional work is preparing tax
returns. Mr. Hunner prepares between 120 and 160 returns per
year.
1991: Mr. Gagliardi Wins the Lottery
In 1991, Mr. Gagliardi won approximately $26,660,000 from
the California lottery (lottery proceeds). Mr. Gagliardi elected
to receive payment of the lottery proceeds in 20 annual payments
of approximately $1,333,000 each (original annual lottery
payment).
At the time he won the lottery proceeds, Mr. Gagliardi was
29 years old, was married, and had two children. Since winning
the lottery proceeds, Mr. Gagliardi has not been employed. After
winning the lottery proceeds, and before 1996, Mr. Gagliardi
purchased a new home and custom-built motorcycles and regularly
went on vacations. With the exception of the above expenditures
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