- 147 -
participants before the trial. Mr. Sims told Mr. Wise that he
was concerned about the piggyback cases because the Thompsons
would be getting a better settlement and the Government had won
all the test cases.
Mr. Wise believed that Mr. Sims' request to make an
assessment that differed from a Tax Court decision required
higher level approval. On May 15, 1992, Mr. Wise forwarded
Mr. Sims' May 8, 1992, memorandum to his supervisor, Christian G.
Beck, Chief of the San Francisco Appeals Office. Mr. Wise told
Mr. Sims that he did not have authority to process his request
and indicated he was going to seek approval from Danny Cantalupo
(Mr. Cantalupo), Regional Director of Appeals for the Western
Region. On May 22, 1992, Mr. Cantalupo informed Peter D. Bakutes
(Mr. Bakutes) Deputy Regional Counsel (Tax Litigation) for the
Western Region, that the Appeals Office had received a request
from Mr. Sims to make an assessment in a Kersting test case on a
basis that differed from the Tax Court's decisions.
Under the management structure of the Western Regional
Counsel's Office, Mr. Bakutes reported directly to Mr. Sanchez.
As Deputy Regional Counsel, Mr. Bakutes was responsible for
general oversight of tax litigation in the Western Region,
including tax shelter cases, and for evaluating how such cases
should be handled. Mr. Bakutes had experience with tax shelter
procedures before becoming Deputy Regional Counsel. Mr. Bakutes
expected that, in the Western Region, a project attorney and the
attorney's manager would contact the Regional Office if they
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