Benness M. Richards and Jane Richards - Page 24

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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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