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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
redetermination.
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
return.
OPINION
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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