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Court and who “wishes to settle the case on some other basis than
a full concession” is directed to contact respondent’s attorney
or Appeals officer to whom the case is assigned. Then, “If a
settlement is agreed to, the attorney or Appeals Officer will
prepare the appropriate decision document.” Id.
In this case, when they prepaid their interest, the
Thompsons (through DeCastro) had actually reached a settlement of
their liabilities for 1979-1981 with McWade. McWade prepared the
appropriate decision documents, and he and DeCastro both signed
those documents, which reflected the settlement and contained an
express waiver of the restrictions against assessment and
collection of the liabilities. Accordingly, as of December 31,
1986, the Thompsons had agreed to pay approximately 80 percent of
the deficiencies originally determined against them, and their
attorney had, in fact, executed decision documents to that
effect. Under section C.1.b of Ann. 86-108, the Thompsons’
agreement appears to have qualified their payment of deficiency
interest for full deductibility.
Petitioners argue that another provision of Ann. 86-108
applies. Section C.1.c. addresses “Taxpayers Desiring to Make a
Payment in 1986, While Continuing to Contest the Asserted
Deficiency in Tax Court”. That provision directs that, in order
to obtain an interest deduction for payment made in 1986 while
continuing to litigate before the Tax Court, the taxpayer must
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