- 99 -
particular, Mr. McWade agreed to reduce the Thompsons'
deficiencies in an amount sufficient to compensate them for the
cost of having an attorney represent them at the trial of the
test cases. Mr. DeCastro estimated that his legal fees for
representing the Thompsons at the trial of the test cases would
be approximately $60,000. Under the revised settlement
agreement, the Thompsons' tax deficiencies were reduced to the
following:
Year Deficiency Additions to Tax
1979 --- ---
1980 $15,000 ---
1981 15,000 ---
By reason of the Thompsons' having previously remitted $121,770
to the Internal Revenue Service for the taxable years 1979, 1980,
and 1981, Mr. DeCastro and Mr. McWade calculated that the above-
described reductions of the Thompsons' deficiencies would
generate refunds of tax and interest to the Thompsons of
approximately $60,000. Mr. DeCastro and Mr. McWade understood
that the refunds generated by the reduced deficiencies would be
used for the purpose of paying the Thompsons' attorney's fees to
Mr. DeCastro.
Although Mr. McWade and Mr. DeCastro agreed to revise the
Thompson settlement in this manner before the trial of the test
cases, the first written confirmation of their agreement appears
after the trial, in the form of an April 10, 1989, memorandum
from Mr. McWade to Tom Stevens (Mr. Stevens), Chief of Special
Procedures in the Collection Division of the Honolulu District
Page: Previous 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 NextLast modified: May 25, 2011