Terri L. Steffen - Page 9

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          for the Second Circuit.  United States v. Bilzerian, 926 F.2d               
          1285 (2d Cir. 1991).                                                        
               On October 21, 1991, respondent issued separate notices of             
          deficiency to petitioner and Mr. Bilzerian for the taxable year             
          1986.  In the notices of deficiency, respondent determined that             
          petitioner and Mr. Bilzerian were liable for additions to tax for           
          negligence due to the omission from their originally filed 1986             
          return of the approximately $4 million of taxable income from               
          gains related to the purchase and sale of Hammermill stock.                 
          Petitioner filed a petition to this Court seeking a                         
               In 1992, Mr. Bilzerian sued Mr. Norris for malpractice for             
          the omission of the $4 million of taxable income from the                   
          Bilzerians’ originally filed 1986 return.  In connection with the           
          malpractice lawsuit, Mr. Norris denied any liability with respect           
          to the preparation of petitioner and Mr. Bilzerian’s 1986 tax               
               In Bilzerian v. Commissioner, T.C. Memo. 2001-187, we                  
          sustained respondent’s determination that Mr. Bilzerian was                 
          liable for the additions to tax for negligence under section                
          6653(a)(1)(A) and (B) for 1986.  We found that Mr. Bilzerian                
          failed to establish that he reasonably relied on his return                 

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