Betty W. Thompson - Page 7

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               Mr. Batson prepared an appraisal report and submitted it to            
          the Company.  Mr. Batson's fee was paid by the Company and                  
          charged as compensation to Mr. Thompson.  It was Mr. Thompson's             
          understanding that both Mr. Batson and Mr. Hawkins, although                
          formally engaged by him, were also representing his wife, here              
          petitioner, with respect to her potential gift tax liability.               
               In due course, petitioner and Mr. Thompson received the                
          revenue agent's report and filed a protest. In May of 1992,                 
          Mr. Hawkins, by letter, submitted the appraisal prepared by                 
          Mr. Batson to the Appeals Office.                                           
               On or about August 11, 1993, statutory notices were issued             
          to petitioner and Mr. Thompson determining gift tax deficiencies            
          and additions to tax under section 6660 based on respondent's               
          valuation of the Company stock.                                             
               The petition was filed on September 1, 1993.  Upon the                 
          filing of respondent's answer on November 1, 1993, the case was             
          at issue.  A Notice Setting Case for Trial, dated November 5,               
          1993, set the case for trial on April 11, 1994, and the Standing            
          Pre-Trial Order directed the parties to file expert witness                 
          reports no later than 30 days prior to the first day of the trial           
          session.                                                                    
               On or about February 16, 1994, Mr. Thompson hired attorney             
          David Aughtry (hereinafter Mr. Aughtry) to represent Mr. Thompson           
          and petitioner at trial.  A valuation expert, Z. Christopher                
          Mercer (hereinafter Mr. Mercer), of Mercer Capital Management,              




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