Frederic W. Thrane, Jr. - Page 3

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              Petitioner retained a certified public accounting firm,                
          Oliva, Sahmel & Goddard (OSG), to provide tax and accounting                
          services both for Windsor and for himself.  For 2001, OSG                   
          provided tax and financial accounting services to Windsor,                  
          including the preparation of Windsor's Federal income tax return,           
          and prepared petitioner's individual Federal income tax return.             
          Windsor employed a part-time bookkeeper/accountant who served as            
          the main point of contact between OSG and Windsor.  Windsor and             
          petitioner had been clients of OSG for at least 3 years at the              
          time the 2001 returns were prepared.                                        
               Philip Wright was a certified public accountant employed by            
          OSG since 1999.  In March of 2002, Wright prepared Windsor's                
          audited financial statements for the year ended December 31,                
          2001.  The audited financial statements were signed by the OSG              
          audit partner, Thomas Goddard, and were prepared for, among other           
          reasons, compliance with requirements set by the U.S. Department            
          of Housing and Urban Development for mortgage lenders.                      
               After completion of the audited financial statements, Wright           
          prepared Windsor's 2001 Form 1120S, U.S. Income Tax Return for an           
          S Corporation.  The Form 1120S was prepared using a tax                     
          accounting computer program that electronically stored the                  
          return, matched debits and credits, and allowed other OSG                   
          personnel to electronically access the return.  After Wright                







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