- 57 -
1986 and 1987 returns ($16,251 for 1986 and $27,914 for 1987),
the interest on the reduced deficiencies that were ultimately
assessed in 1993 amounted to only $27,506 ($15,371 for 1980 and
$12,135 for 1981). Pursuant to written advice from DeCastro, the
Thompsons deducted the fees paid to him in 1993 totaling $51,225
($32,225 + $19,000) in computing their taxable income. The
description accompanying the deduction claim on the Thompsons’
1993 return was “LEGAL FEES FOR INCLUDABLE INC.”25
J. Respondent’s Disciplinary Action
Against Sims and McWade
On July 29, 1993, Sanchez sent notices of proposed
disciplinary action to Sims and McWade. The notices asserted
that Sims and McWade had violated: (1) Department of the
Treasury Minimum Standards of Conduct, section 0.735-30(a)(2) (an
employee shall avoid any action which might result in or create
the appearance of giving preferential treatment to any person);
(2) Department of the Treasury Minimum Standards of Conduct,
section 0.735-30(a)(6) (an employee shall avoid any action that
might adversely affect the confidence of the public in the
integrity of the Government); and (3) IRS Rule of Conduct 214.5
25The reference to “INCLUDABLE INC.” has not been
satisfactorily explained, even by Poltash, whose office prepared
the return. Petitioners urge that the reference is to “an entity
that never existed.” The Court doubts the reference is to an
entity at all, but the Court’s question to Poltash, whether the
reference was a shorthand reference to “includable income”, as a
justification for deductibility under sec. 212, met with a
protestation of ignorance.
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