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to file a second motion to set aside the stipulations of settled
issues in which they could assert that O'Donnell lacked authority
to settle the partnership issues.
Discussion
1. Position of Petitioners, O'Donnell, and Respondent
Petitioners contend that O'Donnell did not have authority to
sign the stipulations of settled issues and that Mr. Newbern did
not intend to settle these cases on the basis stipulated. Mr.
Newbern asserts that he authorized O'Donnell in November 1994 to
concede petitioners' claim that Mrs. Newbern was an innocent
spouse but not to concede or settle the partnership issues.
O'Donnell had no written authority from petitioners to
settle the cases, but he stated in his affidavit that he
remembers that he felt comfortable signing the stipulations of
settlement based on a telephone conversation he had with
petitioners.
2. Background
Whether an attorney has authority to act on behalf of a
taxpayer is a factual question to be decided according to common
law principles of agency. Dorchester Indus. Inc. v.
Commissioner, 108 T.C. 320, 330-331 (1997); Adams v.
Commissioner, 85 T.C. 359, 369-372 (1985); Kraasch v.
Commissioner, 70 T.C. 623, 627-629 (1978). Generally, a lawyer
may settle a client's claim only if the client expressly
authorizes the lawyer to do so. See Smith v. Washburn & Condon,
297 P. 879, 880 (Ariz. 1931); see also Model Rules of
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