- 36 -
by the entities that he controlled. Although petitioner cannot
turn a blind eye to the joint returns in question, Bokum v.
Commissioner, 94 T.C. at 148, she relied on Mr. Morris to prepare
those returns because he was a former revenue agent and an
accountant, she had confidence in his ability to prepare those
returns properly, and, as far as she knew, Mr. Morris never
received any complaints about the returns that he prepared for
others.
In this connection, we note that the tax consequences of
distributions by, and the operations of, corporations and trusts
are not matters that we would expect petitioner to know because
of her level of education.27 Distributions (1) to stockholders
from corporations28 and (2) to beneficiaries from trusts29 are not
27 Petitioner earned a degree from Parkland College during 1987,
and her course work there included two basic accounting courses.
She entered the University of Illinois in the fall of 1987 and
took courses there for two years before she withdrew, including
two intermediate accounting courses.
28 Accu-Data was a C corporation, and not an S corporation,
during the period January 1987 through June 1988. During the
period July 1988 through December 1989, Accu-Data was an S
corporation, as was Meadows throughout 1988 and 1989. Except for
maintaining a checking account at the Champaign National Bank,
MCIC conducted no activities during the years at issue, and it
does not appear that it filed any income tax returns for those
years.
29 The record does not disclose how Trust 768 should have been
treated for Federal income tax purposes during the years at
issue. However, it does establish that beneficial interests in
that trust were held by petitioner and Mr. Morris starting with
its creation at the end of November 1987 through the middle of
June 1988, when they assigned their interest to Meadows. Except
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