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refund claims constituted an admission against interest.
Respondent opposed Mr. Izen's motion on the grounds that the
taxpayers in question had claimed Kersting interest deductions
for the 3 taxable years before the year that they reported a
capital gain, and that the Commissioner had accepted those tax
returns as filed. Respondent asserted that under the
circumstances it was not inequitable for the Commissioner to deny
the taxpayers the claimed refunds. On February 26, 1991, the
Court denied Mr. Izen's motion.
C. Dixon II Opinion
Messrs. Sims and McWade did not inform Judge Goffe, the
National Office, Regional Counsel, or Mr. Izen of the Thompson
and Cravens settlements or the Alexander understanding before the
issuance of the Court's Dixon II opinion.
On December 11, 1991, the Court filed its Dixon II opinion.
In particular, the Court rejected Mr. Izen's contention that the
cases should be dismissed for lack of jurisdiction on the ground
that the notices of deficiency issued to his clients were
invalid. The Court also sustained respondent's disallowance of
the interest deductions claimed with respect to the Kersting
stock purchase, stock subscription, leasing corporation, and CAT-
FIT plans. The Court determined that the loans were sham
transactions lacking economic substance and that the loans did
not constitute genuine indebtedness. Finally, the Court
sustained respondent's determinations against test case
petitioners who had been charged with additions to tax for
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