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interest deduction reported on petitioners' 1978 tax return and
denied without qualification the allegation that the notice of
deficiency is arbitrary and capricious.
On January 27, 1987, Luis C. DeCastro, Esq. (Mr. DeCastro),
filed an entry of appearance on behalf of petitioners in docket
No. 17445-82. In the interim, on December 23, 1986, respondent's
counsel assigned to the Kersting project, Kenneth McWade, Esq.
(Mr. McWade), had mailed Mr. DeCastro a letter enclosing proposed
decision documents for petitioners and several other taxpayers
with cases before the Court involving Kersting-related
adjustments. On December 30, 1986, Mr. DeCastro executed a
stipulated decision on behalf of petitioners which states that
petitioners are liable for a deficiency in income tax for the
taxable year 1978 in the amount of $23,000 and that petitioners
are not liable for additions to tax under section 6653(a) or
6621(d). On the same date, Mr. DeCastro mailed a check to Mr.
McWade, signed by petitioners and made payable to the IRS in the
amount of $53,571, representing $23,000 in tax and $30,571 in
interest. Mr. McWade executed the stipulated decision on April
27, 1987, and mailed the document to the Court.
On March 30, 1987, Mr. McWade filed a Motion to Sever
petitioners' case from docket No. 17445-82. Shortly thereafter,
the Court granted the motion, severed petitioners' case from
docket No. 17445-82, and assigned the case docket No. 8922-87.
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