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Mr. McWade for any reduction of the tax liabilities on his joint
returns for the years 1974, 1975, 1976, and 1977.
4. Mr. McWade
Mr. McWade appeared at the evidentiary hearing and testified
that, when settlement discussions first arose in the Thompson
and Cravens cases, he believed he had a problem with conflicting
Government policies. In particular, Mr. McWade testified that
while he was obliged by Internal Revenue Service policy to treat
similarly situated taxpayers alike, the Internal Revenue Service
also had a policy against settling test cases.79 Mr. McWade did
not confer with anyone in the National Office or the Regional
Counsel's office regarding resolution of the conflict that he
perceived; Mr. Sims was the only person with whom Mr. McWade
discussed the alleged conflicting policies. Mr. McWade did not
feel any obligation to coordinate the Thompson settlement
arrangement with the National Office or Regional Counsel because
he had discussed the arrangements with Mr. Sims.
Mr. McWade testified that the Thompson settlement was
revised in the summer of 1989 in order to dispose of the Bauspar
issue. Mr. McWade denied that the Thompson settlement was
revised to provide a means for the Thompsons to pay
Mr. DeCastro's attorney's fees.
79 Contrary to Mr. McWade's testimony, we found that the
Internal Revenue Service did not maintain a policy prohibiting
the settlement of a test case. See supra p. 76.
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