Jerry and Patricia A. Dixon, et al - Page 52




                                       - 138 -                                        

               Mr. McWade's memorandum apparently did not raise any                   
          concerns in the Special Procedures office.62  On July 11, 1989,             
          the Government issued a refund check to the Thompsons in the                
          amount of $30,000.  The Thompsons endorsed the check to DeCastro            
          Law Corp. without depositing it in their own checking account.              
               On August 3, 1989, Mr. DeCastro wrote a letter to Mr. McWade           
          confirming the revision of the Thompson settlement that had been            
          agreed to before the trial of the test cases.  Mr. DeCastro's               
          letter states in pertinent part as follows:                                 
               Re: Jack and Maydee Thompson                                           
               Dear Ken:                                                              
                    Please confirm following is our agreement with                    
               respect to settlement of above taxpayer's cases for                    
               open years:                                                            
                    We have agreed that the total taxes due for all                   
               the open years are $15,000 for 1980 and $15,000 for                    
               1981.                                                                  
                    Further, in the event a final decision in this                    
               case is more favorable they are to receive the benefit                 
               of such decision.                                                      
                    Please sign below so I can have for my files.                     

          Mr. McWade signed the letter and returned it to Mr. DeCastro.               
          On August 24, 1989, Mr. DeCastro wrote to Mr. McWade                        
          requesting that Mr. McWade arrange for the Thompsons to receive             
          the balance of their refund.  Mr. DeCastro's letter states in               
          pertinent part:                                                             


          62  Mr. Stevens was not called to testify at the evidentiary                
          hearing.                                                                    

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