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was not reported as income. For the years related to the State
income tax refund, State income taxes had been deducted on the
relevant filed Federal income tax returns.
During the years in issue, petitioner used moneys from her
Merrill Lynch account to pay numerous personal expenses. This
included the purchase of a new 1990 Lincoln Town Car for $43,345
and a new 1990 Lincoln Continental for $34,317.
The law firm’s employees did not handle petitioner’s Merrill
Lynch account. The Merrill Lynch account’s monthly statements
were mailed to petitioner’s home address. Petitioner never gave
the law firm’s employees (1) monthly statements for petitioner’s
Merrill Lynch accounts or (2) memoranda from petitioner
discussing deposits into these accounts to include in the monthly
envelope. The Merrill Lynch statements were not on the list of
documents to be sent to Mr. Reiter monthly.
Neither Mr. Reiter nor his staff received monthly statements
for petitioner’s Merrill Lynch account or memoranda from
petitioner discussing deposits into her Merrill Lynch accounts.
No “sealed envelopes” addressed to Mr. Reiter were seen or placed
by the law firm’s employees into the monthly envelope. No
“sealed envelopes” addressed to Mr. Reiter were received by Mr.
Reiter’s office. Neither Mr. Reiter nor his staff was aware that
petitioner was distributing client fees from the client trust
account to one of her Merrill Lynch accounts.
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Last modified: May 25, 2011