- 9 -
years. However, while petitioners apparently also claimed non-
cash-contribution deductions on their 2002 return, the issue was
not raised in the examination, nor were the deductions disallowed
in the 2002 deficiency notice.
The 2002 year (Omaha case) moved though the normal
administrative procedures and became docketed in this Court at a
time when the earlier years’ cases (Phoenix cases) were at a more
advanced stage of development. The Omaha and Phoenix cases were
being handled by different Government counsel, and different
cities had been requested for trial. In a routine manner, the
Omaha case was assigned to Appeals for settlement, and, after
exchanges with Appeals, petitioners sent a letter proposing
settlement. Coincidentally, a few weeks later, Government
counsel in the Phoenix cases moved to continue the cases from the
scheduled Phoenix trial session. After not being able to obtain
a response from Appeals to their 2002 year offer, petitioners
contacted Government counsel in Omaha, who was not aware of the
non-cash-contribution issues in the Phoenix cases and was not
familiar with the details of the negotiations or settlement offer
during the Appeals process. When petitioners’ counsel asked
respondent’s Omaha counsel about the status of the settlement
offer, Government counsel made some affirmation that the matter
was settled (per petitioners) or that settlement was likely (per
respondent). Considering that scenario with those two possible
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Last modified: May 25, 2011