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Professional Conduct rule 1.2(a). However, prolonged silent
acquiescence by a client with full knowledge of the facts may be
treated as ratification of an unauthorized act or settlement by
his or her lawyer. Thompson v. D.C. Am., Inc., 951 F. Supp. 192,
195-196 (M.D. Ala. 1996) (a settlement agreement negotiated by
the plaintiff's attorney without her authority was treated as
ratified by the plaintiff because she kept settlement proceeds
for more than a year); Yarnall v. Yorkshire Worsted Mills, 87
A.2d 192, 193 (Pa. 1952) (a settlement stipulation executed
without authority by the plaintiff's attorney was treated as
ratified by the plaintiff in part because he waited 20 months to
repudiate the settlement).
Where taxpayers challenge the authority of counsel to act on
their behalf, the burden of proof is on the taxpayers to show
that their counsel lacked authority. Dahl v. Commissioner, T.C.
Memo. 1995-179, affd. per curiam without published opinion 85
F.3d 643 (11th Cir. 1996); Smith v. Commissioner, T.C. Memo.
1990-430.
3. Whether Petitioners Are Bound by the Settlements
Petitioners deny that they authorized O'Donnell to settle.
O'Donnell believed petitioners had authorized him to sign the
stipulations of settled issues. Petitioners have failed to prove
that O'Donnell lacked express authority to settle. However, even
if we did not believe that O'Donnell had express authority to
settle, petitioners impliedly ratified the settlements by failing
to repudiate them for more than 2 years after they knew about
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Last modified: May 25, 2011