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surrender policy, Judge Goffe's reliance upon alternative bases
to support the conclusion that Kersting promissory notes did not
constitute genuine debt convinces us that Mr. Alexander's
testimony was not material to the outcome in Dixon II.
4. Summary
We hold that the Government misconduct in the trial of the
test cases in Dixon II resulted in harmless error in the trial of
the test cases insofar as the Court concluded that: (1) The
Kersting transactions were shams; (2) the Kersting promissory
notes did not constitute genuine debt; and (3) interest on
Kersting loans was not paid within the meaning of section 163(a).
In so holding, we reject Messrs. Izen's and Jones'
contention that, by virtue of the totality of the Government's
misconduct, their clients were denied due process.
We likewise reject Mr. Sticht's contention that his
clients--nontest case petitioners--were denied due process on the
ground that Judge Goffe effectively was precluded from
supervising the trial of the test cases. Although Judge Goffe
might have removed the Thompson and Cravens cases from the test
case array and struck Mr. Alexander's testimony if he had been
informed of the Thompson and Cravens settlements and the
Alexander understanding, we are convinced that the outcome in the
trial of the test cases would not have changed.
Consistent with the preceding discussion, we are convinced
that the test case and nontest case petitioners enjoyed a fair
trial, encompassing "not only fair notice and an adequate
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