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reviewed this transaction before reporting it on petitioners'
1983 return and reached the conclusion that the sale to the Mid-
Continent corporations occurred during 1983. Home believed that
the downpayment was low, but that it was an installment sale that
occurred during 1983. In subsequent research, Home discovered a
revenue ruling (Rev. Rul. 234, 1953-2 C.B. 29) that permitted,
for tax purposes, installment sales of intangibles.
Home prepared petitioners' 1983 income tax return and relied
on representations of petitioner in preparing the return.
Petitioner, for 1983, advised Home that he had made repayments of
amounts received from the Mid-Continent corporations, and Home
claimed $90,000 as repayment of the reimbursement of
preincorporation expenses. The $90,000 was one-half of the
claimed value of Riley that Roy and petitioner placed in the Mid-
Continent corporations.
Petitioner also advised Home that he had incurred expenses
during 1983 on behalf of the Mid-Continent corporations that
could be considered repayment of amounts received from the
corporations. Home, however, did not include them on the 1983
return because petitioner did not provide the details or
specifics for the expenditures.
The State of Indiana did not pursue the securities charges
on which the cease and desist order had been based; however, the
Federal Government ultimately prosecuted, convicted, and
sentenced to prison petitioner, Cooper, and Roy. Petitioner was
indicted on June 9, 1988, on numerous counts, including one count
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