- 115 -
If more than one year is involved, the settlement
reflects a shelter burn-out for the first half of
petitioners’ participation, and a disallowed deduction
for the later years.
Non-Kersting Issues: None.
The Counsel Settlement Memorandum signed by Messrs. Sims and
McWade contains two false statements: (1) That the basis for
settlement represents the Alexanders' out-of-pocket expenses; and
(2) that the case did not include any non-Kersting issues.
The Court entered the parties' stipulated decision in docket No.
30413-86 on April 13, 1989.
The stipulated decisions described above reflect
Mr. McWade's general understanding with Mr. Alexander, made
before the trial of the test cases, to reduce the Alexanders' tax
liabilities, in exchange for Mr. Alexander's cooperation and
assistance at the trial of the test cases.
G. The Kozak Decision
On July 23, 1981, the Commissioner issued a joint notice of
deficiency to Mr. Kozak and his wife, Susan K. Kozak, disallowing
subchapter S losses and interest deductions that the Kozaks
claimed on their tax returns for 1973, 1974, and 1975 with
respect to their participation in Kersting programs that were the
subject of Pike v. Commissioner, 78 T.C. 822 (1982). The Kozaks
filed a petition with the Court, assigned docket No. 25812-81,
contesting the notice of deficiency.
On May 12, 1986, Mr. McWade filed a motion for order to show
cause why a decision should not be entered in the Kozaks' case
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