- 2 -
In Dixon v. Commissioner, T.C. Memo. 1991-614,
vacated and remanded per curiam sub nom. DuFresne v.
Commissioner, 26 F.3d 105 (9th Cir. 1994), following a
trial of 14 docketed test cases of eight Ps, the Court
sustained R's disallowance of interest deductions
claimed by Ps in various tax shelter programs promoted
by K. After the Court entered decisions against the
test case Ps in accordance with its opinion, R moved to
vacate the decisions entered in three test cases (T, C,
and X). R alleged that, before the trial of the test
cases, R's trial attorney and District Counsel had
entered into contingent settlement agreements with T
and C that had not been disclosed to the Court or to
the other test case Ps or their counsel. R asked the
Court to conduct an evidentiary hearing to determine
whether the undisclosed agreements with T and C had
affected the trial of the test cases or the opinion of
the Court.
The Court granted R's motions to vacate the
decisions entered in the T and C cases, entered revised
decisions in the T and C cases consistent with R's
prior agreements with T and C, denied R's motion to
vacate the decision in the X case, and denied R's
request for an evidentiary hearing on the ground that
the testimony, stipulated facts, and exhibits relating
to the T and C cases had no material effect on the
Court's opinion as it related to the remaining test
case Ps.
On appeal, the Court of Appeals for the Ninth
Circuit vacated the decisions in the remaining test
cases and remanded them to this Court with directions
"to conduct an evidentiary hearing to determine the
full extent of the admitted wrong done by the
government trial lawyers." DuFresne v. Commissioner,
supra at 107. The Court of Appeals, citing Arizona v.
Fulminante, 499 U.S. 279, 309 (1991), directed the
Court to consider "whether the extent of misconduct
rises to the level of a structural defect voiding the
judgment as fundamentally unfair, or whether, despite
the government's misconduct, the judgment can be upheld
as harmless error." Id. Further, the Court of Appeals
directed this Court to consider on the merits all
motions of intervention filed by affected parties. See
id. This Court ordered that the cases of 10 nontest
case Ps, the majority of whom had previously signed
piggyback agreements, be consolidated with the
remaining test cases for purposes of the evidentiary
hearing. Three groups of Ps participated in all
subsequent phases of the evidentiary hearing.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011