- 286 -
compromise of the taxpayer's case but merely prescribe the
procedure for the adjudication of the case. See Adams v.
Commissioner, 85 T.C. at 369. Nevertheless, we have relied
upon general principles of contract law in construing piggyback
agreements and settlement agreements alike. See Gridley v.
Commissioner, T.C. Memo. 1997-210; see also Saigh v.
Commissioner, 26 T.C. 171, 177 (1956); Fisher v. Commissioner,
T.C. Memo. 1994-434; Applestein v. Commissioner, T.C. Memo.
1989-42.
Mr. Izen contends that the piggyback agreements constitute
public contracts that are governed by the Federal common law of
contracts. Neither respondent nor the other petitioners have
addressed the question.117 In any event, as in Fisher v.
Commissioner, supra, we see no consequential choice of law
problem in the cases at hand. We are satisfied that the general
contract principles relied upon herein are consistent with the
principles applied by State courts.
Petitioners argue that the piggyback agreements may be set
aside because of Messrs. Sims' and McWade's failure to disclose
the true status of the Thompson and Cravens cases at the time
nontest case petitioners executed the agreements. Every contract
117 For a detailed discussion whether Federal or State law
governs the validity of a purported joint return that is impugned
on the ground of duress, reviewing the matter under 1
Restatement, Contracts 2d (1981), and New Jersey common law, see
Berger v. Commissioner, T.C. Memo. 1996-76. The Berger opinion
concludes that the result would be same under the State law and
the putative Federal common law.
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