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the severity of the investigation and the civil audit in August
of 1997, after which she contacted Robert Beatson II (hereinafter
sometimes referred to as Beatson), an accountant and attorney.
Beatson immediately filed a power of attorney authorizing him to
serve as Mary’s representative with respect to the investigation
and the audit.
Beatson represented to respondent that Mary (1) did not sign
the returns, (2) did not authorize petitioner to sign the returns
on her behalf, and (3) wanted to file separate returns for 1988
through 1991 and for 1994. Before August of 1997, Mary did not
manifest an intention to file a separate return for 1994.
Respondent’s revenue agent, Howard Bell (hereinafter sometimes
referred to as Bell), represented to Beatson that Mary could not
file separate returns until the civil audit was concluded.
By a letter dated June 2, 1998, Bell informed Beatson that
the civil audit was “essentially complete”. Beatson then
prepared married-filing-separately tax returns for Mary for 1988,
1989, 1990, 1991, and 1994. Beatson did not prepare separate
returns for Mary for 1992 and 1993 because respondent (1)
determined that there was no outstanding tax liability for those
years, and (2) represented that the filing of separate returns
for 1992 and 1993 would be administratively inconvenient.
Beatson believed that Mary’s interests vis-a-vis the statute of
limitations as to 1992 and 1993 were adequately protected by the
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