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investment in that company. It was only after Riverside filed
for bankruptcy in 1989 that petitioner became aware that Mr.
Korchak had invested approximately $700,000 in that company.
As was true of petitioner’s reliance on Mr. Korchak with
respect to their family’s finances, petitioner also relied upon
Mr. Korchak to retain a professional to prepare joint tax returns
for them. Petitioner’s role in the preparation of such returns
was limited to providing Mr. Korchak with any Forms W-2, Wage and
Tax Statement (Form W-2), and Internal Revenue Service (IRS)
information returns that she received as well as any other tax-
related information that she had.
Since around the mid-1970s until the time of the trial, the
professional that Mr. Korchak retained to prepare Form 1040, U.S.
Individual Income Tax Return, for petitioner and himself (joint
tax return) was Hilton Sokol (Mr. Sokol), a certified public
accountant. Mr. Sokol was an employee of Miller, Ellin and
Company (Miller Ellin) in New York, which provided accounting
services for, inter alia, Halcon. Many of Halcon’s executives
retained certified public accountants employed by Miller Ellin to
prepare their respective tax returns. Both petitioner and Mr.
Korchak trusted and relied on Mr. Sokol’s professional judgment
to prepare accurately their joint tax returns.
Since around the mid-1970s, the following general practice
remained the same with respect to (1) the preparation of joint
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