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Nevertheless: “The law is well established that a court has some
power to set aside a settlement stipulation filed with it but its
discretion will not be exercised unless good cause is shown.”
Saigh v. Commissioner, 26 T.C. 171, 176 (1956). In Adams v.
Commissioner, 85 T.C. 359, 375 (1985), we set forth criteria
appropriate for determining when we should exercise our
discretion to modify or set aside a settlement stipulation:
The party seeking modification * * * must show that the
failure to allow the modification might prejudice him.
* * * Discretion should be exercised to allow
modification where no substantial injury will be
occasioned to the opposing party; refusal to allow
modification might result in injustice to the moving
party; and the inconvenience to the Court is slight.
* * * [Citations omitted.]
In Himmelwright v. Commissioner, T.C. Memo. 1988-114, we
faced a situation similar to that which we face with respect to
the 1993 docketed cases. In the Himmelwright case, we had
canceled a trial in reliance on the representation of counsel for
one of the parties that a settlement agreement had been reached.
We enforced that agreement, memorialized in a letter from the
taxpayer’s counsel to the Commissioner’s counsel, by analogizing
the taxpayer’s request to be relieved of the agreement to a
motion to vacate a settlement agreement filed on the eve of
trial. In Stamm Intl. Corp. v. Commissioner, 90 T.C. 315 (1988),
the Commissioner moved to vacate a settlement agreement
negotiated shortly before trial was scheduled to commence. We
stated that the settlement agreement had led to the vacation of
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