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information to his accountant and that the incorrect returns were
the result of the accountant’s mistake. Enoch v. Commissioner,
57 T.C. 781, 803 (1972).
Petitioner testified that he sought the advice of Bobrow
with regard to deducting losses resulting from Mary Catherine’s
having been required by its mortgage lenders to write down the
Ridge and Minnechaug to fair market value for financial statement
purposes. Bobrow then prepared petitioners’ returns including
detailed statements disclosing the nature of the writedowns and
resulting losses. Attached to the disclosure statements are the
appraisals and other information about the Ridge and Minnechaug.
Examination of Mary Catherine’s and petitioners’ income tax
returns reveals that petitioner must have provided Bobrow with
all information necessary for his accountants to render tax
advice and prepare the returns. We find that petitioners relied
on the advice of Bobrow, and we hold that petitioners were not
negligent in doing so.
Petitioners made no effort to hide their position from
respondent. Petitioners attached copies of Mary Catherine’s
income tax returns, including the disclosure statements, to their
personal returns. Petitioners also attached copies of the
disclosure statements to each Application for Tentative Refund
that they filed. The completeness and clarity of petitioners’
disclosure statements, and the fact that petitioners attached a
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