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IX. Posttrial Developments
A. First Thompson Refund
Around the time of the Dixon II trial, Mr. DeCastro asked
Mr. McWade to arrange for the Thompsons to receive a refund of
$30,000 of their advance payments, in accordance with the second
revision of the Thompson settlement. In a memorandum dated
April 10, 1989, Mr. McWade requested Mr. Stevens to process a
$30,000 refund to the Thompsons. Mr. McWade's April 10, 1989,
memorandum states:
The above-named taxpayers are part of the Kersting
Interest Deduction Project. Because their case was
designated as one of the "test cases", the basis for
settlement agreed to prior to trial cannot be finalized
until after the Court enters its decision, projected to
be after mid-year 1990.
The basis for settlement will result in
approximate deficiencies, as follows:
Tax Year Deficiencies Interest Total
1980 $15,000.00 $19,241.66 $34,241.66
1981 $15,000.00 $15,191.44 $30,191.44
Based upon the enclosed transcript, the taxpayers
have made advance payments as follows:
Tax Year Advance Payment
1979 $63,000.00
1980 $35,373.09
1981 $145.88
In an effort to minimize the interest expense to
the government, it is requested that $30,000.00 of
advance payment be refunded to the taxpayers, the
allocations and/or inter-year adjustments being made,
as necessary.
Following the refund, there will be sufficient
advance payments to full pay the agreed deficiencies,
plus accrued interest, with a $4,085.87 reserve.
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