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Court denied.3 Also on June 6, 1994, respondent filed a motion
to dismiss for failure properly to prosecute as to all issues
upon which petitioners had the burden of proof. The Court orally
granted respondent's motion on that date and set the case for
trial on June 13, 1994, on the fraud issues as to which
respondent had the burden of proof. On June 10, 1994, Attorney
Riley filed a motion to set aside the default. In an affidavit
attached to the memorandum in support of this motion, Attorney
Riley stated that his representation of petitioners was on a pro
bono basis, and that he had not billed the petitioners nor did he
intend to be compensated by them for his time or expenses in
connection with these cases.
During a recess of the oral argument on petitioners' motion
to set aside the default, the parties met privately and agreed to
a partial settlement. Petitioner husbands conceded the
deficiencies in income tax for all years at issue and the
additions to tax for fraud for 1979 and 1980. Respondent
conceded the fraud additions for 1981. These concessions left
only the innocent spouse issues remaining and also resolved
Attorney Riley's conflict of interest so that he could represent
petitioner wives on their innocent spouse claims. See supra note
1. Attorney Riley agreed to provide documents in regard to the
3 Actually Attorney Riley had mailed the motion for
continuance to the Clerk's Office in Washington, D.C., where it
was received on the morning of June 6, 1994.
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