Dr. Scott initially hired Clem Bailey to prepare his 1986 income tax return, as well as his monthly books and employment tax returns. Scott also gave Bailey the Form K-1 that he received from a limited partnership, Camelback Southwest, Ltd. That form stated that Scott's share of a partnership gain, $233,380, should be reported on Form 4797 and attached to Scott's 1986 individual return. 6 Bailey reported this gain.