Patricia A. Hendricks and John J. Hendricks - Page 4

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          gave the broker an initial installment check from one of his                
          business checking accounts.  Mr. Hendricks completed the purchase           
          by paying two additional installments over the next 2 years by              
          checks drawn on his business accounts.  The partnership interest            
          in Boulder Oil and Gas was placed in Mr. Hendricks’s name alone.            
               Petitioner had no knowledge that Mr. Hendricks was making an           
          investment in Boulder Oil and Gas.  Mr. Hendricks did not consult           
          petitioner about making the investment.  Petitioner did not                 
          receive any mail regarding Boulder Oil and Gas because all mail             
          from the partnership was sent to Mr. Hendricks’s business                   
               Just prior to Mr. Hendricks’s investment in Boulder Oil and            
          Gas, on January 31, 1980, Mr. Hendricks traded various pieces of            
          farmland that the Hendrickses had previously owned for 10                   
          condominiums in Fort Collins, Colorado.  The condominiums were              
          not acquired from proceeds made available through Mr. Hendricks’s           
          investment in Boulder Oil and Gas.  The condominiums were owned             
          jointly by the Hendrickses.                                                 
               During the relevant years, the Hendrickses relied upon Mr.             
          Grosser, who had promoted Boulder Oil and Gas, to prepare their             
          tax returns.  Petitioner’s only involvement in preparing the tax            
          returns for the relevant years at issue was to complete a                   
          questionnaire about personal and household expenses.  Petitioner            
          relied on Mr. Hendricks to communicate with Mr. Grosser for the             

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