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Additionally, child support of approximately $6,500 per month was
deducted from the gross annual lottery payments made to Mr.
Gagliardi during the years in issue.
Mr. Hunner prepared Mr. Gagliardi’s Federal income tax
returns for 1997, 1998, and the years in issue. Mr. Hunner used
the same method to prepare Mr. Gagliardi’s returns for 1997 and
1998 as he did for the years in issue. Mr. Hunner never stated
to Mr. Gagliardi that the records Mr. Gagliardi gave to him were
inadequate to prepare his tax returns.
After receiving voluminous documentation and records from
Mr. Gagliardi regarding his gambling during the years in issue,
Mr. Hunner was comfortable preparing Mr. Gagliardi’s returns for
the years in issue, especially with regard to the gambling loss
deductions claimed on the returns, given the nature and extent of
Mr. Gagliardi’s gambling. Mr. Hunner believed that Mr.
Gagliardi’s gambling losses were greater than the amounts of
gambling loss deductions claimed on Mr. Gagliardi’s returns. Mr.
Gagliardi reported the following amounts on his returns:
Year Casino Winnings State Lottery Winnings Casino Losses
1999 $127,073 $666,500 ($502,433)
2000 270,052 666,500 (802,921)
2001 631,629 666,500 (1,170,140)
In calculating the amounts of gambling loss deductions to
claim on Mr. Gagliardi’s returns, Mr. Hunner added all of Mr.
Gagliardi’s checks, charges, and withdrawals made at the casinos
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Last modified: March 27, 2008