Herbert L. Mitchell, deceased, and Ella Marie Mitchell - Page 5

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            proceeds in U.S. Treasury securities.  He did not roll over the                            
            proceeds into an Individual Retirement Account (IRA).  Petitioner                          
            and Mr. Mitchell received two Forms 1099-R from the State of                               
            Maryland indicating that the taxable portion of the transfer                               
            refund distribution was $629,083.14.  Petitioner was aware of the                          
            timing and amount of the transfer refund distribution and knew                             
            that Mr. Mitchell had purchased Treasury securities with the                               
                  In January 1992, and for approximately 5 months thereafter,                          
            petitioner was suffering from shingles, the severity of which                              
            caused her to be bedridden at various times and absent from work                           
            for extended periods.  In March of 1992, Mr. Mitchell died                                 
            suddenly as the result of a pulmonary embolism.  Sometime shortly                          
            after April 15, 1992, petitioner contacted Mr. Emerson Browne,                             
            the family’s longtime tax adviser, concerning the preparation of                           
            a 1991 Federal income tax return.  She provided Mr. Browne with                            
            the records she could find, including the Forms 1099-R issued by                           
            the State of Maryland with respect to the transfer refund                                  
            distribution.  She did not find, and therefore did not provide to                          
            Mr. Browne, the letter from the Maryland State Retirement and                              
            Pension Systems that had advised Mr. Mitchell that the transfer                            
            refund was potentially subject to taxation whether rolled over or                          

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