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Dyckman) had been a carpet salesman and petitioner wife (Mrs.
Dyckman) had been an elementary school teacher. In 1982,
petitioners' gross income was approximately $60,000 and their net
worth was approximately $50,000.
Petitioners were referred to Mr. Ira Kipness, a certified
public accountant (C.P.A.). Mr. Kipness was touted as a
knowledgeable, experienced, and trustworthy accountant. Mr.
Kipness began to prepare petitioners' tax returns in 1975. Soon
thereafter, petitioners became close friends with Mr. Kipness and
his family. Mrs. Dyckman began to tutor Mr. Kipness' daughter.
Mr. Kipness and his family moved to California in 1984.
Petitioners continued to mail Mr. Kipness their tax information,
and he continued to prepare their returns for sometime after the
move to California.
Petitioners had virtually no experience in financial or
investment matters. Until the year in issue, petitioners'
investment experience had been limited to bank accounts, a few
certificates of deposits, and securities financed through
withholdings from their paychecks for investment through employer
plans. Mr. Kipness advised petitioners that because they were
approaching retirement, they should seriously consider investing
for their future. Petitioners requested Mr. Kipness to suggest a
suitable investment for that purpose. Mr. Kipness suggested
investment in a "waste management" or "recycling" program. Mrs.
Dyckman was concerned about the environment and had organized a
paper recycling program in her school. She was especially
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