Patricia A. Hendricks and John J. Hendricks - Page 5

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          preparation of their tax returns.  When Mr. Hendricks brought               
          home the income tax returns prepared and signed by Mr. Grosser,             
          petitioner would sign them in reliance on the accountant’s and              
          her husband’s recommendations to sign.  Except for the years they           
          reported loss activity from Boulder Oil and Gas, i.e., 1980-83,             
          the Hendrickses have neither had their Federal tax returns                  
          examined, nor have they had taxes in excess of the amount                   
          reported on their returns assessed.  The Hendrickses claimed                
          $158,521 in losses arising from Boulder Oil and Gas on their                
          joint 1983 tax return on Schedule E, Supplemental Income and                
          Loss.  This amount did not appear on the face of the return, but            
          was listed on Schedule E, combined with the income and expenses             
          of at least 11 other properties, including the condominiums and             
          an office building.                                                         
               On September 10, 1985, respondent sent the Hendrickses a               
          Form 4549, Income Tax Examination Changes, which reflected                  
          proposed changes to the Hendrickses’ joint Federal income tax               
          returns for 1980-83.  This was the first time petitioner learned            
          of Mr. Hendricks’s investment in Boulder Oil and Gas.  On October           
          11, 1985, the Hendrickses received a notice of deficiency for               
          1980-82.  The Hendrickses failed to petition the Court for                  
          redetermination of the deficiencies set out in the notice of                
          deficiency and consented to an extension of the assessment date.            
          On June 10, 1987, respondent assessed the following amounts as              

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