Jerry and Patricia A. Dixon, et al - Page 303




                                       - 95 -                                         

                              1979     1980      1981     Total                       
               Tax deficiency     0     $34,425   $30,000   $64,425                   
               Interest           0      35,275    24,270    59,545                   
               0      69,700    54,270   123,970                                      
                    As you can see, this amounts to a substantial                     
               reduction in tax liabilities.                                          
                    4.  Jack correctly understands that his recent                    
               payment of $59,545 was entirely applied to interest.                   
                    5.  The IRS is willing to settle with Jack only on                
               the basis that his test case remains active.  The terms                
               are not contingent upon any specific testimony or                      
               degree of cooperation and will be filed upon completion                
               of the test case.  Jack need only testify, at the trial                
               and is only technically a defendant.  Unless some                      
               dramatic changes in schedule occur, there will be no                   
               depositions.  Essentially, Jack need only testify, be                  
               protected from Kersting, and does not need to prepare a                
               full-blown defense.                                                    
                    6.  As indicated, the IRS insists upon Jack                       
               continuing as a test case defendant for its own                        
               purposes.  That is presently a condition of the                        
               settlement.  In addition, we simply do not trust                       
               Kersting to act in accordance with his promises and                    
               staying in the case appears to be wise insurance to                    
               obtain cancellation of the notes, etc.                                 
                    7.  I enclose a copy of a letter we have sent to                  
               Kersting's attorney regarding the notes issue for your                 
               information.                                                           
                    8.  If we are unable to obtain a cancellation of                  
               notes and recovery of funds invested for Jack through                  
               negotiation, we will certainly look to retain John                     
               Chanin or other local counsel for that purpose.                        
          On February 6, 1987, Mr. Huestis reviewed Mr. DeCastro's letter             
          with Mr. Thompson and was satisfied that Mr. Thompson understood            
          the status of his case.                                                     
               On March 13, 1987, following the Maui session, Mr. McWade              
          sent Mr. DeCastro a revised decision for docket No. 31236-84                
          reducing the Thompsons' tax deficiency for 1980 from $34,425 to             

Page:  Previous  85  86  87  88  89  90  91  92  93  94  95  96  97  98  99  100  101  102  103  104  Next

Last modified: May 25, 2011