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Each check was negotiated in Greece. Mrs. Stotis and
petitioner endorsed the $100,000 check issued to Mrs. Stotis;
Maria and petitioner endorsed the $100,000 check issued to Maria;
and Evanthia and petitioner endorsed the $97,500 check issued to
Evanthia.
Seawall issued a Form 1099 to each tenant with whom it
entered into a surrender agreement, including petitioner. At the
end of 1989, Seawall issued to petitioner a Form 1099 in the
amount of $322,500.
Tax Return Preparation
Andrew Sotiriou (Sotiriou) prepared petitioners' Federal
income tax returns (Forms 1040) for the taxable years 1985
through the years in issue. Sotiriou worked as a travel agent,
and he prepared his clients' tax returns as an additional
service.
Petitioner reported gross income from his vending business
of $11,470, $13,810, and $11,320 for the taxable years 1989,
1990, and 1991, respectively, on Schedules C of petitioners'
Forms 1040. Sotiriou did not review any documents related to
petitioner's vending business; he merely relied on petitioner's
statements regarding receipts and expenses.
Petitioner did not report the $322,500 payment from Seawall
for the taxable year 1989. Petitioner did not report the fair
market rental value of the new apartment for the taxable years
1989, 1990, or 1991. Petitioner never provided Sotiriou with the
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