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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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