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that was achieved by increasing the deficiency reduction
percentage from 20 percent to 62 percent in effect should be
disregarded because the refunds generated thereby purchased
nothing of value and provided at most a de minimis increase in
the Thompsons’ net worth.51
2. Petitioners’ Position
In sharp contrast, petitioners view the Thompsons’
settlement of their 1979-1981 deficiencies strictly in terms of
the percentage reduction in the total amount of tax the Thompsons
were required to pay. Thus, petitioners maintain that the
starting point for determining the percentage reduction in
deficiencies to which they are entitled is 62.17 percent,
representing the final total reduction of the Thompsons’ proposed
deficiencies for the years at issue from $79,294 to $30,000.
In addition to their argument that the form of the
Thompsons’ settlement of their 1979-1981 deficiencies (62.17-
percent reduction) provides the starting point for determining
the appropriate sanction in these cases, petitioners dispute
respondent’s assertion that the payment of DeCastro’s fees was
51A more nuanced adoption and application of respondent’s
argument might arrive at some percentage between 20 percent and
62 percent by increasing the 20 percent to reflect the amount of
the refunds actually retained by the Thompsons or the amount they
expected or were expected to retain after their endorsement over
to DeCastro of the first two refunds. Neither side has advanced
such an argument.
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