Terri L. Steffen - Page 6

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          of securities.4  On their Form 1040, they reported adjusted gross           
          income and tax liability of $6,099,966 and $3,005,166,                      
          respectively.  Petitioner and Mr. Bilzerian reported an                     
          overpayment of tax of $2,053,708.  Petitioner knew that a                   
          considerable portion of the income realized by petitioners in               
          1986 was related to the purchase and sale of the Hammermill                 
               Petitioner and Mr. Bilzerian’s 1986 individual tax return              
          was prepared by Dwight Norris (Mr. Norris).  Mr. Norris prepared            
          their individual tax returns for the taxable years 1982 through             
          1986.  Mr. Norris also prepared partnership tax returns for 1986            
          for South Bay Fashion Center and South Bay Fashion One.5  Mr.               
          Norris graduated from Ohio State University in 1956 and has been            
          working as a certified public accountant since that time.  At the           
          time he prepared petitioner and Mr. Bilzerian’s 1986 return, Mr.            
          Norris worked for the accounting firm of Porterfield & Co.,                 
          C.P.A.s, located in Sacramento, California.6  In connection with            
          his preparation of the 1986 tax return, Mr. Norris received a               
          package of information from Mr. Bilzerian’s office consisting of            

               4Petitioner and Mr. Bilzerian reported deductions of                   
          $14,101,394, resulting in a net loss of $6,038,117.                         
               5In 1982, Mr. Norris was a business partner with Mr.                   
          Bilzerian in South Bay Fashion One.                                         
               6At the time of trial, Mr. Norris resided in California.               

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