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standard settlement offer was made available to taxpayers in
nondocketed Plastics Recycling cases. See Baratelli v.
Commissioner, T.C. Memo. 1994-484. The standard settlement offer
allowed a deduction for 50 percent of the amount of the
taxpayer’s cash investment, Government concessions of the
negligence addition to tax, and the taxpayer’s concession of the
valuation overstatement addition to tax and increased interest.
The standard settlement offer expired in 1989 following the trial
of Provizer v. Commissioner, supra. See Baratelli v.
Commissioner, supra n.3.
Petitioner and His Involvement in SAB
Petitioner is an experienced attorney who has litigated
cases for more than 35 years. Petitioner is well aware that
cases can be resolved through settlement at various stages of
litigation.
In 1981, petitioner acquired a limited partnership interest
in SAB. As a result of petitioners’ investment in SAB, they
claimed a net operating loss deduction of $39,697 and investment
tax credits and business energy credits totaling $82,558 on their
1981 Federal income tax return, which was limited to petitioners’
1981 income tax liability (as reduced by the partnership loss) of
$58,232. The balance of the credits, $24,326, was carried back
to the years 1978 and 1979 to generate tax refund claims of
$11,489 and $12,837, respectively.
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