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Received by Thompsons:
$30,000.00 Refunded July 11, 1989, pursuant to
request of McWade, endorsed to
DeCastro.
32,225.00 Refunded February 19, 1993, pursuant
to request of DeCastro and endorsed
to DeCastro.
32,116.68 Third refund check, dated October 22,
1993, for $32,116.68, representing
interest on overpayment resulting from
advance payment of deficiencies.
4,107.93 Refund, with interest, of overpayment
resulting from application of $59,545
interest payment against 1980-81
deficiencies and interest.
98,449.61 Total amount refunded by IRS
for years in issue.
In sum, the Thompsons were refunded $98,449.61 of the
$121,770 they had paid in deficiencies and interest for 1979-
1981. Of the $98,449.61 refunded, $81,225 was paid to DeCastro
as legal fees. Of this amount, $62,225 was paid to DeCastro by
the Thompsons’ endorsement to him of the first two refund checks
they received in 1989 and 1993. The Thompsons apparently paid
DeCastro an additional $19,000 after receiving the third refund
check later in 1993.
On their 1993 tax return, the Thompsons reported both the
$32,116 interest income received from the IRS in October and the
smaller interest payment of $1,850 received in December. Their
return did not reflect the tax benefit arising from the fact
that, while they deducted $44,165 of deficiency interest on their
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