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satisfy the purposes of one of the parties to it. * *
* [Fn. ref. omitted.]
Moreover, “a compromise is a contract and thus is a proper
subject of judicial interpretation as to its meaning, in the
light of the language used and the circumstances surrounding its
execution.” Robbins Tire & Rubber Co. v. Commissioner, 52 T.C.
420, 435-436 (1969) (and cases cited therein).
The estate argues that if permitted to proceed to trial it
could show that the $929,350 in payments (25 percent of which was
conceded by respondent in the settlement) were really “disguised
capital contributions to the partnership” and not subject to the
estate or gift tax. The estate further alleges that if Mr.
Harkavy was an “independent counsel” he would have advised the
estate of several legal positions that might have resulted in the
estate’s complete success on the $929,350 issue.
At the time the executor agreed to the settlement with
respondent, she was confronted with the following factors: (1)
Her attorney (Mr. Harkavy) advised that the trial Judge had
expressed a negative view of the estate’s position; (2) the
estate’s accountant was being called as a favorable witness for
respondent; (3) Mrs. Peterson contacted her own accountant but he
would not provide support for the estate’s position; and (4) Mr.
Harkavy’s doubts about the estate’s position and chances of
success.
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