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Norris received a package of information from petitioner’s office
consisting of Schedules K-1 and other various schedules in order
to prepare petitioner’s individual return, including the schedule
prepared by Peat Marwick.
Petitioner claims that Peat Marwick characterized a portion
of the gain attributable to Hammermill stock transactions as
personal gain to petitioner when the gains were actually
attributable to the activities of Bilzerian & Mack. Petitioner
contends that this was done for the purpose of accommodating the
Macks’ tax planning objectives and that he did not consent to
participation in this activity.9 As a result, petitioner claims
that the $4 million was improperly omitted from the Schedule K-1
for petitioner attached to Bilzerian & Mack’s 1986 Form 1065.
Petitioner argues that neither he nor Mr. Norris had any way of
knowing that Peat Marwick was characterizing approximately $4
million of gains from Hammermill stock transactions as personal
gain to petitioner instead of reporting it on the Schedule K-1
for petitioner. Petitioner further argues that he was involved
in several hundred million dollars of financial transactions
during 1986, which diminished his ability to recognize that
approximately $4 million of taxable income was omitted from the
return.
9Petitioner claims that the characterizations of personal
gain or gain through Bilzerian & Mack were merely paper entries
to accommodate the Macks.
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