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filing, answering telephones, and general office work. She is
now retired. Mrs. McPike has no previous investment experience
other than her personal residence.
Prior to 1982, petitioners either prepared their own tax
returns or hired someone to prepare them. They did not have a
regular return preparer. In 1982, petitioners saw an
advertisement in a local newspaper for tax return preparation by
Daniel Lukensow (Lukensow). According to the advertisement,
Lukensow's background consisted of 7 years as an internal revenue
agent and 8 years of private practice in the areas of tax law,
tax return preparation, and tax audits. Petitioners contacted
Lukensow, made an appointment, and hired him to be their tax
return preparer. They never investigated Lukensow's background.
Lukensow advised petitioners that they could save a
considerable amount of money through investment in tax shelters.
He promoted and sold two different tax shelters, one involving a
computer rental program and the other involving a marine dry
cargo container program. Petitioner discussed these programs
with Lukensow, but Mrs. McPike was not involved. She relied on
petitioner to make the decisions regarding investments.
Petitioner believed that the proposed investments would reduce
their Federal income tax liability, allow them to provide better
financial assistance to their blind son, and generate a pension
after their retirement.
In 1983, petitioners invested in the container leasing
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