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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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