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Lindenbaum and Mr. Sherland discussed the values in the January
14, 2002, telephone conversation. The calculations faxed to Mr.
Sherland on that day were to support Mr. Lindenbaum’s proposed
value of $1,124,410. Upon receipt, Mr. Sherland knew that the
value of $1 million was different from the $1,124,410 value
discussed in the telephone conversation held just before.
Instead of requesting clarification, the estate’s representatives
tried to agree to the lower value because it was to their
advantage. Mr. Lindenbaum immediately contacted the estate’s
representative, Mr. Sherland, to clarify the error. As apparent
from the faxes afterwards, both parties acknowledged that Mr.
Lindenbaum made an “honest mistake”. Holding that a settlement
basis had been reached would allow the estate to take an unfair
advantage of a simple, honest error that was immediately
corrected.
The estate argues that our holdings in Stamm Intl. Corp. v.
Commissioner, 90 T.C. 315 (1988), and Dorchester Indus., Inc. v.
Commissioner, 108 T.C. 320 (1997), affd. 208 F.3d 205 (3d Cir.
2000), are “unusually clear and precise” in supporting its
argument that the Court should not vacate the alleged settlement
agreement based upon respondent’s unilateral mistake. In Adams
v. Commissioner, 85 T.C. 359, 375 (1985), we set forth criteria
to be used when determining whether we should exercise our
discretion to modify or set aside a settlement stipulation:
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