- 96 -
$33,000. Mr. Sims reviewed and approved Mr. McWade's letter to
Mr. DeCastro. Although the record contains no explanation for
this revision of the Thompson settlement, the revision
effectively increased the Thompson settlement from 19 percent to
approximately 20 percent. On April 7, 1987, Mr. DeCastro sent
Mr. Thompson a letter informing him that the Internal Revenue
Service had reduced his tax liability for 1980 by approximately
$1,000. Mr. DeCastro also informed Mr. Thompson that this
reduction would also save him approximately $1,000 in interest.
On June 4, 1987, the Court granted respondent's Motion to
Withdraw Stipulation of Settlement for Tax Shelter Adjustments in
the Thompson cases at docket Nos. 19321-83 and 31236-84.45
Mr. McWade filed the motions on the stated ground that, because
the Thompsons had been designated as test cases, it was
inappropriate for the Thompson piggyback agreements to remain in
effect. Mr. McWade's motions stated that Mr. DeCastro did not
object to the granting of the motions. Because Messrs. McWade
and DeCastro had previously agreed to settle the Thompson cases,
the above-referenced motion is the first instance in which the
Court was misled by the failure of counsel who were in the know
to disclose that the Thompson cases had been settled.
45 The Thompsons had not signed a piggyback agreement for
their case at docket No. 30965-85. The only other test case
petitioners who had signed piggyback agreements were the Dixons,
in their case at docket No. 9382-83, and Mr. Rina, in his case at
docket No. 17640-83. All the piggyback agreements signed by test
case petitioners had been signed in June 1985 and were in the
form of the 1985 agreement set forth supra pp. 44-45.
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