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the underpayment. There is no evidence, much less clear and
convincing evidence, that the parties made a mutual mistake. All
we have is competing contentions of counsel. We conclude that
the basis of settlement for fraud should not be reformed based on
mutual mistake.
b. Nonsensical Result
Petitioners contend that respondent's interpretation of the
statement of the basis of settlement in the transcript is
nonsensical because, under respondent's interpretation,
petitioners did not benefit by having a 20-percent rate apply to
the fraud penalty for Mrs. Lorenz.
Petitioners' contention that the basis of settlement in the
transcript is nonsensical is based on their contention that
respondent's counsel knew petitioners' financial status.
Respondent's counsel denied that they knew petitioners' financial
status; petitioners' counsel contends that they did. There is no
evidence to support petitioners' allegation that respondent's
counsel knew that the estate of Mr. Lorenz had sufficient assets
to pay the fraud penalty on the entire underpayment.
Petitioners' accountant alleged in a letter to respondent's
counsel that respondent's counsel should have known that the
estate of Mr. Lorenz had enough assets to pay the fraud penalty
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