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The remaining elements of petitioners' theory of fraud upon
the Court merit little discussion. Petitioners assert that
respondent deliberately concealed that respondent had
fraudulently obtained “jurisdiction” over Kersting investors,
including petitioners, and then forced the many taxpayers so
affected into settlement or trial. As discussed above, we reject
the notion that respondent fraudulently obtained jurisdiction
over petitioners. We have no reason to doubt that all
information necessary for petitioners to contest the validity of
the notice of deficiency, i.e., petitioners' 1978 tax return and
the notice of deficiency, was readily available to petitioners at
the time the notice of deficiency was issued.14 Finally, it is
evident that any misconduct of Mr. McWade in arranging
settlements with Messrs. Thompson, Cravens, and Alexander as part
of the test case proceedings bears no relation to the stipulated
settlement that petitioners entered into in this case.
14 Indeed, Mr. Nevels included allegations in the petition
that the notice of deficiency was arbitrary. Further,
allegations were raised in the test cases that the notices of
deficiency issued to the test case taxpayers were invalid due to
the use of materials seized from Mr. Kersting at the same time
that Mr. DeCastro was engaged in settlement negotiations with Mr.
McWade respecting petitioners' case. Although the record does
not disclose whether Mr. DeCastro pursued this particular point
with Mr. McWade, we note that petitioners do not allege, and
there is no evidence in the record, that the issue was not raised
because of any collusion or fraud.
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