- 120 -
As previously mentioned supra pp. 18-19, in October 1989,
the Commissioner assessed promoter penalties of $1,545,201 and
$2,330,000 against Mr. Kersting pursuant to sections 6700 and
6701, respectively, for the years 1982 through 1988.
C. Chicoine and Hallett's Withdrawal as Counsel
By February 1988, Mr. Kersting's dissatisfaction with
Chicoine and Hallett over evaporation of the 50-percent
settlement and their promotion and reporting of 20-percent
settlements led him to terminate their employment as counsel for
the test cases and to encourage their other Kersting program
clients to recall their settlement retainers. In April 1988, the
Court granted Chicoine and Hallett's motions to withdraw their
appearances as counsel for test case petitioners.
D. Mr. Izen's Entry of Appearance
In February 1988, Mr. Kersting retained Mr. Izen to
represent the test case petitioners, other than the Thompsons and
the Cravenses. At the time, Mr. Izen had no experience
representing test case taxpayers in the Tax Court, although he
did have experience representing taxpayers who had signed
piggyback agreements to be bound by the outcome of test cases in
a tax shelter project.
Mr. Izen filed entries of appearance as counsel for test
case petitioners during February 1988 through January 1989.
Mr. Izen examined the deductions claimed by the test case
petitioners he represented to determine whether they were
representative of the Kersting programs. Mr. Izen analyzed the
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