Linda S. Dillon - Page 7

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          accountant at Touche Ross, after reviewing the financial package            
          concerning the investment in Supertaps, did not express any                 
          objections relating to the investment.  Petitioner attended the             
          meeting in 1981 in which Thomas Dillon and the accountant from              
          Touche Ross discussed the investment in Supertaps.  In their                
          1981, 1982, and 1983 Federal income tax returns, petitioner and             
          Thomas Dillon reported losses from this investment of $77,739,              
          $115,782, and $107,104, respectively.  However, in 1985                     
          petitioner and Thomas Dillon reported partnership income of                 
          $128,924.                                                                   
               During 1981 and 1982, Thomas Dillon maintained a money                 
          market account with Murphy Favre.  The statements were received             
          by Thomas Dillon at Dillon Securities, and petitioner was not               
          listed as a signatory on the account.  The balance in the account           
          varied between $600,000 and $800,000.  In 1981, petitioner and              
          Thomas Dillon reported income from this account of $22,517.  In             
          1982, the Dillons earned $43,158 in income from this account, but           
          this income was mistakenly omitted from their 1982 Federal income           
          tax return.                                                                 
               Petitioner and Thomas Dillon's 1981 Federal income tax                 
          return was prepared by accountants at Touche Ross.  Petitioner              
          and Thomas Dillon attended a meeting at Touche Ross to review and           
          sign their return.  The accountants at Touche Ross discussed ways           
          in which the Dillons could reduce their Federal income tax                  
          liabilities.  Petitioner did not review the return before signing           



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