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1982 joint tax return about the claimed $58,089 Madison Recycling
loss and the claimed Madison Recycling tax credits of $114,407,
which she did not, Mr. Korchak would have assured her that that
claimed loss and those claimed credits were proper.
On May 1, 1983, petitioner and Mr. Korchak signed the 1982
joint tax return, and on May 6, 1983, they filed it with the IRS.
On or about December 24, 1987, respondent issued a Notice of
Final Partnership Administrative Adjustment to Madison Recy-
cling’s tax matters partner for, inter alia, Madison Recycling’s
taxable year ended December 31, 1982 (FPAA). In the FPAA,
respondent, inter alia, disallowed Madison Recycling’s claimed
$704,111 loss and reduced to $0 Madison Recycling’s claimed
$7,000,000 basis for investment tax credit purposes and business
energy investment tax credit purposes (respondent’s reduction to
$0 of Madison Recycling’s claimed basis).
On February 16, 1988, respondent sent a copy of the FPAA to
Mr. Korchak and petitioner in an envelope addressed to both of
them. Consistent with his practice of opening the family’s mail,
Mr. Korchak opened that envelope and reviewed the FPAA. He
showed the FPAA to petitioner because he believed that she should
be aware that the IRS had raised questions about Madison Recy-
cling’s 1982 return, which, in turn, raised questions about the
claimed $58,089 Madison Recycling loss and claimed Madison
Recycling tax credits of $114,407 in their 1982 joint tax return.
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