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to perform on a continuing basis all necessary acts
with respect to petitioners’ tax affairs. Levy’s
conduct in filing the petition was of the same general
nature as, and incident to, those functions that he was
employed to perform. [Id.]
In the present case, the record clearly demonstrates that
neither James nor John, nor any of petitioner’s other employees,
possessed any expertise in Federal tax matters and that, as a
consequence, James and John retained, and relied on for a period
of 7 or 8 years, CJ&J, and particularly Jaffe, to provide tax
services, including the representation of petitioner before the
Internal Revenue Service. The record also clearly demonstrates
that James and John trusted Jaffe and had confidence in him.
Indeed, they regarded Jaffe as their friend, and they gave him
full and unfettered access to petitioner’s books and records;
Jaffe was even authorized to deal directly with the vice
president of petitioner’s bank.
Because James and John trusted and relied on Jaffe, neither
brother paid close attention to petitioner’s tax matters.
Rather, they adopted a hands-off approach and essentially
delegated responsibility for petitioner’s tax matters to Jaffe.
They also instituted, or acquiesced in, an office procedure
whereby tax-related mail was routed to James’ office, where it
was placed, generally unopened and unread by James, in a box
reserved for Jaffe’s use. They also frequently signed, without
scrutiny or inquiry, tax-related documents that were presented to
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