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hand, maintain that the Thompson settlement covered a number of
years between 1979 and 1993, thereby increasing the percentage
reduction in Kersting deficiencies to which they are entitled to
79.95 percent.57 They base this percentage on their calculation
that, absent the settlement, the amount of taxes the Thompsons
would have paid respondent for the taxable years 1979-1983, 1986-
87, and 1993 was $143,894.10, while the amount they actually paid
was $28,894.87 ($30,000 reduced by $1,105.13 that respondent
maintains Mr. Thompson improperly received as reimbursement for
his travel to Hawaii to testify in the Dixon II trial). We
examine various suspect benefits below.58
57In a separate brief, petitioners’ counsel Sticht argues
for a “cashflow” approach to the calculation of the reduction
percentage, which would bring the initial reduction percentage to
86.8 percent of petitioners’ aggregate deficiencies, additions,
and interest. Without closely following the mechanics of
Sticht’s calculation, we reject the cashflow approach out of
hand. It completely disregards the time value of money
principles that underlie our Preliminary Comments. See text
accompanying notes 38, 39, and 40, supra.
We also note that, in the course of the evidentiary hearing
required by the Dixon V mandates, petitioners’ counsel O’Donnell
and Jones filed motions for summary judgment of “100-percent
discount” as a sanction. We denied the motions and the motions
for reconsideration of our denials because of numerous
outstanding issues of material fact. With the completion of the
evidentiary hearing and issuance of our opinion herein, we now
regard petitioners’ motions to characterize the Thompson
settlement as a 100-percent reduction in the Kersting-related
deficiencies as having been denied on the merits.
58We note that petitioners do not question the settlement of
the Thompsons’ 1978 tax year, which was apparently the first year
for which the Thompsons claimed Kersting deductions. In any
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