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for 1979, 1980, and 1981. Finally, the letter stated that the
Thompsons' refund was attributable to the resolution of Kersting
interest deduction programs, including the Bauspar program. Mr.
DeCastro signed the waivers and returned them to Mr. McWade on
April 27, 1992. Mr. Sims and Mr. McWade initialed the waivers on
May 1, 1992. By letter dated May 8, 1992, Mr. DeCastro wrote to
Mr. Thompson stating in pertinent part: "Finally I have been
advised that the Infernal [sic] Revenue Service is processing a
refund to you. I expect to be in excess of $55,000 [sic] so as I
mentioned it will finally take care of my bill and leave some
left over for you."
During this same period, Mr. Sims informed Larry Martucci
(Mr. Martucci), an Associate Chief of Appeals in the San
Francisco Appeals Office,63 that a Kersting test case petitioner
had accepted the project settlement offer made to all Kersting
petitioners, but, because the petitioner was one of the test
cases, he had tried his case. Mr. Sims told Mr. Martucci that
the Court had entered a decision in the case in accordance with
its opinion. Mr. Martucci told Mr. Sims that he did not know
what could be done. Mr. Martucci told Mr. Sims that, at a
minimum, Mr. Sims should contact Mr. Sanchez, Regional Counsel
for the Western Region, Office of Chief Counsel.
63 From November 1988 through March 1992, Mr. Martucci
supervised the Appeals officers assigned to the Honolulu Appeals
Office, including Gary Lipetzky and Mel Iwane. Mr. Martucci
first became aware of the Kersting tax shelter project in 1988 or
1989 when the project was in District Counsel jurisdiction and no
longer with the Appeals Office.
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