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District of Hawaii sustained the Commissioner's assessments. See
Kersting v. United States, Civil Nos. 90-00304, 91-00747, 92-
00593 (D. Haw., Sept. 30, 1994). Mr. Kersting's appeal of that
decision to the Court of Appeals for the Ninth Circuit, docket
No. 94-16942, was argued and submitted on May 8, 1996, but
subsequently withdrawn from submission (with an opportunity for
supplemental briefing) until after this Court issues its opinion
in these consolidated cases.
D. Kersting Notice of Deficiency
The Commissioner sent Mr. Kersting a notice of deficiency
determining deficiencies in and additions to his Federal income
taxes for the taxable years 1982 through 1988. The deficiencies
were based upon the Commissioner's determination that cash
payments of so-called leverage loan interest received by Kersting
corporations, which were characterized by the District Court in
the promoter penalty cases as "alter egos" of Mr. Kersting, and
which the Court's Dixon II opinion characterized as fees paid to
Mr. Kersting by program participants in exchange for tax
deductions, were includable in Mr. Kersting's gross income.
Mr. Kersting filed a timely petition for redetermination with
this Court (assigned docket No. 7448-96), and the case was tried
at a Honolulu special trial session that commenced January 27,
1999.
9(...continued)
of $1,000 (per incident) upon a person who knowingly aids or
assists another in understating his tax liability.
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