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petitioners were liable for the section 6662(a) accuracy-related
penalty.
During the afternoon of December 16, 2003, Montgomery held a
telephonic conference with Ms. Keil and Tan, and he tried to
persuade Ms. Keil to accept the settlements. He told Ms. Keil
and Tan that if they later found any mistake in his computations,
his law firm and his insurance carrier would pay for the mistake,
the accounting fee, and the tax bill. Ms. Keil refused to accept
the settlements.
Near the end of this conference, Montgomery asked Tan to
hang up so that he could speak privately with Ms. Keil. After
Tan did so, Montgomery asked Ms. Keil if she was proceeding with
her plans to divorce Mr. Keil. Ms. Keil replied that she was and
that Mr. Keil would be served with divorce papers in January
2004. Montgomery replied that the divorce was good news in that
either petitioner alone could now settle petitioners’ case and
then, if either petitioner wanted, argue later that the resulting
decision should be vacated because neither petitioner was
entitled to settle on behalf of both petitioners due to their
pending divorce. Montgomery suggested that he (on her behalf)
could then accept the settled amount or see if he could get a
better deal. Ms. Keil declined this offer. Later that evening,
Montgomery spoke to Tan for approximately 2 hours. Montgomery
relayed to Tan his scheme of filing with the Court a stipulated
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