Dixon v. Commissioner, Docket No. 9382-83.
Citation | 77 T.C.M. 1630 |
Decision Date | 30 March 1999 |
Docket Number | Docket No. 22783-85.,Docket No. 17992-95.,Docket No. 17646-83.,Docket No. 20119-84.,Docket No. 9382-83.,Docket No. 621-94.,Docket No. 30979-85.,Docket No. 40159-84.,Docket No. 29643-86.,Docket No. 35608-86.,Docket No. 9532-94.,Docket No. 7323-84.,Docket No. 7205-94.,Docket No. 15907-84.,Docket No. 19464-92.,Docket No. 17993-95.,Docket No. 30010-85.,Docket No. 4201-84. |
Parties | Jerry and Patricia A. Dixon, et al.<SMALL><SUP>1</SUP></SMALL> v. Commissioner.<SMALL><SUP>*</SUP></SMALL> |
Court | United States Tax Court |
77 T.C.M. 1630
T.C. Memo. 1999-101
Jerry and Patricia A. Dixon, et al.1 v. Commissioner.*
Docket No. 9382-83.
Docket No. 17646-83.
Docket No. 4201-84.
Docket No. 7323-84.
Docket No. 15907-84.
Docket No. 20119-84.
Docket No. 40159-84.
Docket No. 22783-85.
Docket No. 30010-85.
Docket No. 30979-85.
Docket No. 29643-86.
Docket No. 35608-86.
Docket No. 19464-92.
Docket No. 621-94.
Docket No. 7205-94.
Docket No. 9532-94.
Docket No. 17992-95.
Docket No. 17993-95.
United States Tax Court.
Filed March 30, 1999.
Joe Alfred Izen, Jr., counsel for the petitioners in Docket Nos. 9382-83, 4201-84, 15907-84, 40159-84, 22783-85, 30010-85, 30979-85, 29643-86, and 35608-86. Robert Alan Jones, Las Vegas, Nevada, counsel for the petitioners in Docket Nos. 17646-83, 19464-92, 621-94, and 9532-94. Robert Patrick Sticht, Los Angeles, Calif., counsel for the petitioners in Docket Nos. 7323-84, 20119-84, 7205-94, 17992-95, and 17993-95. Mary Elizabeth Wynne, Steven A. Wilson, Andrew J. Gottlieb, Milton J. Carter, Jr., Robert E. Casey, and Richard S. Goldstein, for the respondent.
CONTENTS
[CCH Pages] Introduction .............................................................................. 1634 FINDINGS OF FACT .......................................................................... 1637 I. Kersting Tax Shelter Programs and Related Matters .................................. 1637 A. The Pike Case .................................................................. 1637 B. Kersting Criminal Investigation ................................................ 1637 C. Assessments of Kersting Promoter Penalties ..................................... 1638 D. Kersting Notice of Deficiency .................................................. 1638 II. Notices of Deficiency Issued to Kersting Program Participants ...................... 1638 A. Form of Notices of Deficiency .................................................. 1638 B. Thompson Notices of Deficiency ................................................. 1639 C. Cravens Notices of Deficiency .................................................. 1639
D. Alexander Notices of Deficiency ................................................ 1640 1. 1974 and 1975 .............................................................. 1640 2. 1976 and 1977 .............................................................. 1640 E. Validity of Notices of Deficiency .............................................. 1640 F. Errors in Notices of Deficiency ................................................. 1640 III. Commencement of Kersting Project ................................................... 1641 A. Tax Shelter Projects and Test Case procedures .................................. 1641 1. Overview ................................................................... 1641 2. National Office Tax Shelter Branch Functions ............................... 1641 B. Petitions for Redetermination .................................................. 1642 C. Brian J. Seery ................................................................. 1642 D. Respondent's Counsel ........................................................... 1642 1. Kenneth W. McWade .......................................................... 1642 2. William A. Sims ............................................................ 1642 E. Adoption of Test Case Procedures in Kersting Project ........................... 1642 1. The Honolulu Session (June 1985) ........................................... 1642 2. Test Case Procedure ........................................................ 1643 3. Test Case Array ............................................................ 1644 IV. The Maui Session (February 1987) ................................................... 1646 A. Trial Notice ................................................................... 1646 B. Piggyback Agreements ........................................................... 1647 C. Mr. Seery's Withdrawals as Counsel ............................................. 1649 1. The Thompsons .............................................................. 1649 2. The Test Cases ............................................................. 1649 D. Entries of Appearance by Chicoine and Hallett .................................. 1649 E. Evidentiary Issues ............................................................. 1650 1. The Maui Session ........................................................... 1650 2. Dixon I Opinion ............................................................ 1651 V. Kersting Disputes With Program Participants ........................................ 1651 A. The Thompsons .................................................................. 1651 1. The Bauspar Program ........................................................ 1651 2. Deterioration of Thompson/Kersting Relationship ............................ 1651 B. The Alexander Dispute .......................................................... 1655 C. Collection Actions ............................................................. 1656 1. Steve Hane ................................................................. 1656 2. Carl Mott, George Vermef, and Robert Peterson .............................. 1656 VI. Settlements ........................................................................ 1657 A. Internal Revenue Service Policy ................................................ 1657 1. National Office Position ................................................... 1657 2. Regional Counsel ........................................................... 1657 B. Official Kersting Project Settlement Offer (7-Percent Reduction of Deficiency or Out-of-Pocket Expenses) ...................................................... 1658 C. Deviations From Official Project Settlement Offer .............................. 1658 1. Modified 7-Percent Settlement Offer ........................................ 1658 2. 20-Percent Settlement Offer ............................................... 1659 3. Negotiations for 50-Percent Settlement Offer ............................... 1659 4. Revival of 20-Percent Settlement Offer ..................................... 1660 D. The Thompson Settlement ........................................................ 1662 1. Initial Thompson Settlement Agreement ...................................... 1662 2. First Revision of Thompson Settlement ...................................... 1663 3. Second Revision of Thompson Settlement ..................................... 1665 E. The Cravens Settlement ......................................................... 1665 F. The Alexander Understanding .................................................... 1667 G. The Kozak Decision ............................................................. 1670 VII. Pretrial Developments .............................................................. 1670 A. The Kersting Deposition—Postponed (January 1987) ............................... 1670 B. John Doe Summons/Assessments of Promoter Penalties ............................. 1671 C. Chicoine and Hallett's Withdrawal as Counsel ................................... 1671 D. Mr. Izen's Entry of Appearance ................................................. 1672 E. The Kersting Depostion (October 1988) .......................................... 1672 VIII. Trial of Test Cases (January 1989) ................................................. 1672 A. Mr. Cravens .................................................................... 1673 B. Mr. Thompson ................................................................... 1673
C. Mr. Kersting.................................................................... 1674 D. Mr. Alexander .................................................................. 1675 E. Mr. DeCastro ................................................................... 1675 F. Comfort Letters ................................................................ 1676 G. Mr. Izen's Introduction of Evidence of Collection Litigation ................... 1676 IX. Posttrial Developments ............................................................. 1677 A. First Thompson Refund .......................................................... 1677 B. Mr. Izen's Motion To Reopen Record ............................................. 1679 C. Dixon II Opinion ............................................................... 1679 D. Disclosure of Thompson Settlement .............................................. 1679 E. Disclosure of Cravens Settlement ............................................... 1682 F. Respondent's Motions To Vacate ................................................. 1683 G. Attempted Discovery by Counsel for...
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