- 20 - to perform on a continuing basis all necessary acts with respect to petitioners’ tax affairs. Levy’s conduct in filing the petition was of the same general nature as, and incident to, those functions that he was employed to perform. [Id.] In the present case, the record clearly demonstrates that neither James nor John, nor any of petitioner’s other employees, possessed any expertise in Federal tax matters and that, as a consequence, James and John retained, and relied on for a period of 7 or 8 years, CJ&J, and particularly Jaffe, to provide tax services, including the representation of petitioner before the Internal Revenue Service. The record also clearly demonstrates that James and John trusted Jaffe and had confidence in him. Indeed, they regarded Jaffe as their friend, and they gave him full and unfettered access to petitioner’s books and records; Jaffe was even authorized to deal directly with the vice president of petitioner’s bank. Because James and John trusted and relied on Jaffe, neither brother paid close attention to petitioner’s tax matters. Rather, they adopted a hands-off approach and essentially delegated responsibility for petitioner’s tax matters to Jaffe. They also instituted, or acquiesced in, an office procedure whereby tax-related mail was routed to James’ office, where it was placed, generally unopened and unread by James, in a box reserved for Jaffe’s use. They also frequently signed, without scrutiny or inquiry, tax-related documents that were presented toPage: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Next
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