- 30 -
the Rinaldis been informed of the Thompson and Cravens
settlements in late 1986, the Rinaldis would have immediately
settled their cases based on the 20-percent settlement offer,
thereby avoiding the accrual of additional interest on their
liabilities, and the Rinaldis would not have continued to
participate in the Kersting programs during the years 1987
through 1991.
We considered and rejected similar claims for relief in
Dixon III; there simply is no justification for adjusting the
Rinaldis' tax liabilities to account for the 20-percent
settlement offer.17 Messrs. Sims and McWade began offering 20-
percent settlements between September and December 1986. During
this period, the settlement offer was not widely disseminated.
All settlement offers were withdrawn on or about December 31,
1986--in advance of the February 1987 Maui session. However,
Messrs. Sims and McWade revived the 20-percent settlement offer
after developments at the February 1987 Maui session led to a
delay in the trial of the test cases. In early 1988, Robert J.
Chicoine and Darrell D. Hallett (collectively Chicoine and
Hallett), then counsel to a number of test case petitioners, sent
letters to the test case petitioners and to other Kersting
program participants recommending that they accept the 20-percent
17 The details concerning the 20-percent settlement offer
are set forth in Dixon III, 77 T.C.M. (CCH) at 1659-1662, 1999
T.C.M. (RIA), at 99-576 to 99-580.
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