Jerry and Patricia A. Dixon, et al. - Page 79

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               On March 13, 1992, the Court entered decisions against                 
          petitioners in the test cases in accordance with its opinion.               
          On May 14, 1992, the test case petitioners--other than test case            
          petitioner Ralph J. Rina (Rina) and the Thompsons and the                   
          Cravenses--appealed the decisions in their cases to the Court of            
          Appeals for the Ninth Circuit.                                              
               H.   Discovery and Disclosure of the Thompson                          
                    Settlements                                                       
               On May 8, 1992, Sims and McWade, by memorandum, requested              
          the San Francisco Appeals Office to process the Thompsons’                  
          account administratively in accordance with the Thompson                    
          settlement, not the Tax Court’s decisions.  On May 22, 1992,                
          Danny Cantalupo, Regional Director of Appeals for the Western               
          Region, informed Peter D. Bakutes (Bakutes), Deputy Regional                
          Counsel for Tax Litigation for the Western Region in San                    
          Francisco, of Sims’s and McWade’s request to process the Thompson           
          settlement.  Bakutes informed Benjamin Sanchez (Sanchez), the               
          Western Regional Counsel in San Francisco, who informed officials           
          in the National Office of the Office of Chief Counsel in                    
          Washington, D.C.  The circumstances surrounding the Thompson                
          settlement became a matter of widespread concern within the IRS.            
               On May 29, 1992, Sims, at the direction of Sanchez, informed           
          DeCastro by letter that the Thompson settlement would not be                
          honored, and that assessments would be made in accordance with              






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