Elizabeth B. Miller - Page 4

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          tax returns.  During those years, Lesile Delmarter (Mr.                     
          Delmarter), a certified public accountant employed by that firm,            
          was responsible for the supervision and performance of those                
          services.  In providing those services to petitioner, employees             
          of PKF, including Mr. Delmarter, relied on the records, such as             
          check registers, check stubs, bank statements, and canceled                 
          checks, that petitioner forwarded to PKF relating to her finan-             
          cial transactions.  Mr. Delmarter and other employees of PKF                
          followed whatever characterization petitioner had reflected in              
          those records as to the nature of her transactions and did not              
          independently determine whether those characterizations accurate-           
          ly reflected the nature of those transactions.  For example, if             
          petitioner had noted on a check stub that a check she wrote was a           
          loan, Mr. Delmarter and other employees of PKF accepted that                
          notation as accurately indicating the purpose for which that                
          check was written.                                                          
          Petitioner's Transfer to Stephen                                            
               Petitioner transferred $100,000 to her son Stephen by giving           
          him two $50,000 checks on June 18, 1982, and on September 9,                
          1982, respectively.  Petitioner wrote the word "loan" on the                
          check register and the check stub, respectively, for those                  
          checks, and she sent those check records to PKF.  Because peti-             
          tioner had written the word "loan" on those records, on December            
          31, 1982, PKF recorded each of the $50,000 checks petitioner                





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