Herbert L. Mitchell, deceased, and Ella Marie Mitchell - Page 7

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            However, the return itself indicated that only $1,083.14 of the                            
            distribution was taxable.   An attached schedule showed tax-free                           
            rollover treatment of $628,000 as invested in a qualified plan.                            
                  At the time she signed the return, petitioner did not                                
            understand the tax consequences of the transfer refund                                     
            distribution or the purpose of the rollover she was advised to                             
            effect.  She did not ask why a relatively small amount of the                              
            entire distribution was taxable.  She relied upon Mr. Browne, her                          
            tax adviser, in concluding that the amount of the  distribution                            
            treated as taxable on the return was correct.  When she signed                             
            the return, she was not aware that the treatment of the                                    
            distribution thereon was incorrect.  She was not aware that her                            
            failure to treat $629,083.14 of the distribution as taxable                                
            income would give rise to a deficiency.                                                    
                  After signing the return, petitioner made expenditures from                          
            the various IRA accounts she had created with the proceeds of the                          
            distribution.  Among other things, she made repairs and                                    
            improvements to her residence; she paid down the mortgage; she                             
            paid her family’s medical bills; she made gifts to her children                            
            and her mother; and she paid off her children’s college loans and                          
            credit card balances for various family members.  Her spending                             
            over the 3 years 1992 through 1994 totaled more than $441,000.                             
            She also established a trust for her children in the amount of                             

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