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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
proceeds.
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
not.
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