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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1 The parties agree on the decision to be entered in each of

the other five referenced cases.

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,
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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.