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After the settlement, the estate, under the guidance of a
new attorney, wishes to advance a theory that the $929,350 was a
nontaxable capital contribution--a theory that was not advanced,
prior to the settlement, on the estate tax return, by the
estate’s accountant or by the estate’s attorney. The estate, on
brief, has also provided several legal theories that it believes
show it would be successful if the agreed decision were vacated
and it were allowed to proceed to trial.
In terms of a judgment entered by consent of the parties,
“the parties are held to their agreement without regard to
whether the judgment is correct on the merits.” Stamm Intl.
Corp. v. Commissioner, 90 T.C. 315, 322 (and cases cited
therein). We note that in Stamm this Court enforced a settlement
of the issues in which the amount of tax had not yet been
calculated or reduced to a decision document. In that case, the
Government sought to be relieved from the settlement agreement
because of its unilateral error about the amount of tax resulting
from the settlement agreement. In holding that the Government
would not be relieved from its agreement, we explained that the
standards for vacating a settlement agreement are “akin to those
involved in vacating a judgment entered by consent.” Id. at 322;
see also Quinones v. Commissioner, T.C. Memo. 1988-269. (The
Government was not relieved from its stipulated
decision even though it was believed by the Government that it
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