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representing him, said that he was prepared to pay his half of
the income tax liability, and said that Rothhammer was
responsible for the remaining half of the tax liability.
On August 2, 1996, Matthias wrote a letter to petitioner and
Rothhammer in which he referred to: “Re: Elektra/Hemisphere Tax
Court Litigation, Docket No. 22961-88” and sought joint
instructions for how to proceed in the Tax Court case.
Petitioner responded with a letter to Matthias on August 9, 1996,
in which he again referred to docket No. 22961-88 and enclosed a
check for $50,000 toward a “good faith settlement.” Matthias &
Berg forwarded the check to respondent as payment against
potential tax liability for 1980. Respondent applied it to
petitioner’s and Rothhammer’s 1980 tax liability. Petitioner
used the other docket number on another letter when writing about
the same $50,000 payment. Petitioner sent or received nine other
letters which referred to docket No. 22961-88. Petitioner
believed that he had only one Tax Court case when he wrote these
letters.
E. The Court’s Order To Show Cause Hearing
In response to respondent’s subpoena and on a date not
specified in the record, Matthias searched Matthias & Berg’s
files to prepare for a hearing on an Order to Show Cause in
docket No. 22961-88. He discovered that the firm had two files
for petitioner, even though Matthias & Berg usually had one file
for each of their clients. They had a third file for Rothhammer.
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