- 157 -
discovered by Messrs. Miller, Kane, and Dombrowski in their
investigation of the Thompson settlement. Respondent alleged
that, sometime before the test case trial, Messrs. Sims and
McWade had agreed to settle the Thompson cases by reducing the
Thompsons' deficiencies in amounts sufficient to compensate the
Thompsons for their projected attorney's fees. Respondent
alleged that this "New Agreement" was designed--and constituted
an agreement by Messrs. Sims and McWade--to pay Mr. DeCastro's
legal fees. Respondent alleged that the "New Agreement" was
unauthorized and had no legal basis. Consequently, respondent
asked the Court to enter decisions in the Thompson cases
consistent with the initial McWade-DeCastro agreement of December
1986, which had allowed the Thompsons a reduction of
approximately 19 percent of their deficiencies with the burnout
feature; i.e., deficiencies of zero, $34,425, and $30,000 for the
taxable years 1979, 1980, and 1981, respectively.
On August 26, 1992, the Court granted Mr. DeCastro's motions
for entry of decision and entered decisions in the Thompson cases
as follows:
Year Deficiency Additions to Tax
1979 --- ---
1980 $15,000 ---
1981 15,000 ---
In January 1993, respondent entered assessments against the
Thompsons for the taxable years 1979, 1980, and 1981 based upon
the decisions entered by the Court in August 1992. Shortly
thereafter, the Thompsons received a refund check for $32,225,
Page: Previous 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 NextLast modified: May 25, 2011