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Petitioners' position in these cases is somewhat similar to
that taken by the taxpayers in Fisher v. Commissioner, T.C. Memo.
1994-434, and Estate of Satin v. Commissioner, T.C. Memo. 1994-
435. In the latter cases, the taxpayers executed piggyback
agreements in which they agreed to be bound to the resolution of
tax shelter adjustments, whether by litigation or settlement, in
three test cases. Of the three test cases, two cases were
resolved by way of settlement prior to trial (the settled cases),
in which the taxpayers conceded the deficiencies while the
Commissioner conceded the additions to tax. In contrast, the
remaining test case subsequently was tried on the merits (the
tried case), resulting in a decision sustaining the
Commissioner's determinations with respect to both the deficiency
and additions to tax. Following the conclusion of the tried
case, and upon learning for the first time about the settled
cases, the taxpayers filed, and the Court granted, motions for
entry of decision consistent with the terms of the settled cases.
Specifically, the Court found the piggyback agreements to be
ambiguous insofar as the agreements bound the taxpayers to cases
(the settled cases and the tried case) with divergent results.
In holding for the taxpayers, the Court concluded that, in
advance of the trial of the tried case, the taxpayers should have
been given an opportunity to agree to the terms offered in the
settled cases. Because the Commissioner failed to advise the
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