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one of the substantive elements of that settlement. Petitioners
urge that the evidence does not support a finding that the
Thompsons’ use of the refunds generated by the final reduction in
deficiencies was restricted in any way. They point to some
inconsistencies in the estimate of total fees that DeCastro had
given to McWade, as well as DeCastro’s initial reluctance to
acknowledge that respondent had arranged to pay his fees.
Accordingly, petitioners argue that the substance of the
Thompsons’ settlement of their 1979-1981 deficiencies did not
depart from the form in which respondent provided it--that is, a
reduction of 62.17 percent in the deficiencies originally
determined for those years.
3. Analysis
As a threshold matter, we do not believe that the
inconsistencies perceived by petitioners outweigh the direct and
circumstantial evidence that, in substance, the Thompsons’
settlement of their 1979-1981 deficiencies was, in the words of
the Court of Appeals, a “vehicle for paying Thompson’s attorneys’
fees”. The preponderance of the evidence shows that, when they
made their final deal, McWade and DeCastro intended that the
refunds generated by the final reduction of the Thompsons’
deficiencies would go to DeCastro in payment of his fees. The
fact that the Thompsons endorsed the first two refunds--two
checks totaling $62,225--directly to DeCastro’s law firm confirms
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