WFO Corporation, et al. - Page 16

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                                       OPINION                                        
          I.   Motion for Entry of Decisions                                          
               A.   Counsel’s Authority To Settle                                     
               The question of whether counsel has the authority to settle            
          a case on behalf of a taxpayer is factual and must be decided               
          according to common law principles of agency.  Dorchester Indus.,           
          Inc. v. Commissioner, 108 T.C. 320, 331 (1997), affd. without               
          published opinion 208 F.3d 205 (3d Cir. 2000); Adams v.                     
          Commissioner, 85 T.C. 359, 369-372 (1985); Kraasch v.                       
          Commissioner, 70 T.C. 623, 627-629 (1978).  Authority may be                
          granted by express statements or by implication from a taxpayer’s           
          words or deeds.  Estate of Quirk v. Commissioner, T.C. Memo.                
          1995-234.  Where taxpayers challenge the authority of counsel to            
          act on their behalf, the burden of proof rests with the taxpayers           
          to show that their counsel lacked authority.  Newbern v.                    
          Commissioner, T.C. Memo. 1999-112.                                          
               The evidence presented on this issue consists of                       
          petitioners’ various submissions to this Court after cancellation           
          of the trial, documentary evidence introduced at the hearing, and           
          the conflicting testimony of Messrs. McCarthy, Brant, and Neubeck           
          and Mrs. Wolfe, on the one hand, and of Mr. Wolfe, on the other.            
          Distilling truth from the testimony of witnesses, whose demeanor            
          we observe and whose credibility we evaluate, is "the daily grist           
          of judicial life."  Diaz v. Commissioner, 58 T.C. 560, 564                  






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