T.C. Memo. 2007-37
UNITED STATES TAX COURT
GRAEME C. REVELL AND BRENDA S. REVELL, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 1636-04. Filed February 20, 2007.
Warren N. Nemiroff, for petitioners.
Jack H. Klinghoffer, for respondent.
MEMORANDUM OPINION
LARO, Judge: On March 20, 2006, the parties filed with the
Court a stipulation of settled issues (settlement stipulation)
that included this case and five other cases that had been
consolidated therewith. Respondent now moves the Court to enter
a decision in this case that is consistent with the settlement
stipulation and has attached to his motion the computations
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underlying his requested decision.1 Petitioners object to
respondent’s motion, asserting, as we understand it, that the
decision to be entered in this case should be based not on the
settlement stipulation but on figures computed by respondent
during settlement negotiations. Respondent has filed with the
Court a reply to petitioners’ opposition. For the reasons stated
herein, we shall grant respondent’s motion.
A controversy before this Court may be settled by the
parties through stipulation. See Dorchester Indus. Inc. v.
Commissioner, 108 T.C. 320, 329 (1997), affd. without published
opinion 208 F.3d 205 (3d Cir. 2000). In that a stipulation is
essentially a contract, see Stamos v. Commissioner, 87 T.C. 1451,
1455 (1986), general principles of contract law determine whether
a settlement has been reached and, if so, whether the stipulation
is binding and enforceable, see Dorchester Indus. Inc. v.
Commissioner, supra at 330. Under such principles, we enforce a
stipulation of settlement that has led to the cancellation of the
trial, absent a showing of lack of formal consent, fraud, mutual
mistake, or some similar ground; a mistake by just one party to a
stipulation of settlement is not a sufficient ground to disregard
the stipulation. See Dorchester Indus. Inc. v. Commissioner,
1
The parties agree on the decision to be entered in each of
the other five referenced cases.
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supra; Stamm Intl. Corp. v. Commissioner, 90 T.C. 315, 320-321
(1988).
Petitioners claim that the Court should disregard the
settlement stipulation signed by them because the decision
flowing from the stipulation does not reflect their understanding
of the settlement. We disagree that we should disregard the
settlement stipulation for the reason that petitioners state.
Even if petitioners had mistakenly signed the document, such a
unilateral mistake is not a sufficient ground to set aside an
otherwise enforceable settlement stipulation. Such is especially
so given that petitioners are represented by counsel and that
their signing of the settlement stipulation was on the eve of
their trial. See Stamm Intl. Corp. v. Commissioner, supra at
321-322.
We hold that petitioners are bound by the amounts shown in
the settlement stipulation and the decision that flows therefrom.
We have considered all arguments made by petitioners for a
contrary holding and consider those arguments not discussed
herein to be without merit. To reflect the foregoing,
An appropriate order and
decision will be entered.