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of the joint returns for 1989, 1991, 1992, and 1993, petitioner,
who received three degrees, including a law degree, from the
University of Pittsburgh, was aware, inter alia, (1) that such
returns claimed substantial losses in Schedules C ranging from
$24,275 to $187,336 and in Schedules E ranging from $58,533 to
$334,910,48 (2) that such claimed losses reduced income reported in
such returns, and (3) that there were (a) no tax shown due in the
1989 joint return or the 1991 joint return, (b) tax shown due of
$1,255 in the 1992 joint return, and (c) tax shown due of $274 in
the 1993 joint return. Moreover, in signing each of the joint
returns for the taxable years 1989, 1991, 1992, and 1993, peti-
tioner did not raise any questions with Mr. Monsour or Mr. Iezzi,
the preparer of those returns, regarding any of them.49
48Most of the losses claimed in Schedules C and in Schedules
E of the 1989 joint return, the 1991 joint return, the 1992 joint
return, and the 1993 joint return were with respect to Laurel
Valley Farms, the Three Crowns Hotel, Azure Tides, Inc.,
Georgetown Square, and the Three Crowns Hotel Back Court.
49Petitioner knew of the risk of an IRS challenge with
respect to at least the Three Crowns Hotel and the Three Crowns
Hotel Back Court. That is because (1) in the notice for the
taxable years 1987 and 1988 respondent made determinations to
disallow deductions of $126,632 and $136,641 for 1987 and 1988,
respectively, with respect to the Three Crowns Hotel and
(2) before respondent issued that notice petitioner and Mr.
Monsour agreed to respondent’s proposed determinations to in-
crease their income by $10,681 and $3,171 for 1987 and 1988,
respectively, with respect to the Three Crowns Hotel Back Court.
In addition, we presume that petitioner knew of the risk of an
IRS challenge with respect to certain losses that petitioner and
Mr. Monsour claimed in their joint returns for 1987 and 1988 with
respect to certain partnerships and S corporations. That is
(continued...)
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