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Recalling the withdrawal of Seery, Sims was concerned by the
potential conflict of interest from Kersting’s paying the fees of
the attorney representing the test case petitioners.
Accordingly, he wanted to keep DeCastro in the trial of the test
cases as an independent attorney, paid by the taxpayer, to
provide an apparent safeguard against the trial appearing to be
slanted toward protecting the promoter’s (as opposed to
petitioners’) interest.
McWade and DeCastro also apparently discussed the status of
an outstanding Federal tax lien on the Thompsons’ house
(unrelated to their participation in Kersting shelters), which
the IRS had yet to remove more than a year after the Thompsons
had satisfied the underlying liability.17 On November 22, 1988,
respondent issued a certificate of release with respect to the
Federal tax lien on the Thompsons’ house.
Shortly before trial of the test cases in this Court in
January 1989, McWade and DeCastro reached an oral agreement (the
new agreement) calling for reduced amounts of agreed deficiencies
for 1979-1981 of zero, $15,000, and $15,000, respectively. The
purpose of the reductions was to compensate the Thompsons for the
cost of having an attorney represent them at the trial of the
17Under sec. 6325(a)(1), the IRS was required to release the
lien not later than Oct. 7, 1987, 30 days after the liability had
been satisfied.
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