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The mere fact that the Thompsons received a tax benefit
is insufficient to enable the Court to conclude that
the benefit was part of the settlement. With respect
to each item, it is also necessary to show, or find it
appropriate to assume, that respondent’s counsel played
an enabling or facilitating role in procuring or
assuring the benefit to the Thompsons.
B. Areas of Agreement
The parties’ stipulation of settled issues, in addition to
delineating the beneficiaries of the Court of Appeals’ mandates,
see supra Part I.C., establishes some common ground regarding the
relief to which those beneficiaries are entitled:
3. The “burnout” element of the Thompson
settlement is as follows:
(a) for taxpayers with 2-3 taxable years
before the court, the first year’s
deficiencies are shifted forward and
combined with the deficiencies in the
second year then reduced in accord with
the Ninth Circuit’s mandate; and
(b) for taxpayers with 4 or more taxable
years before the court, the first year’s
deficiencies are shifted forward to the
second year and the second year’s
deficiencies are shifted forward and
combined with the deficiencies in the
third year, after which all deficiencies
are reduced in accord with the Ninth
Circuit’s mandate.
4. No petitioner will incur any penalties
stemming from such petitioners’s [sic] Kersting
deficiencies.
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