- 72 -
turned largely on the lack of credibility of both parties.
The record does not reflect the outcome of Mr. Kersting's
complaint filed with HODC against Mr. Kozak.
C. Collection Actions
In Dixon II, the Court described Mr. Kersting's 1980 dunning
letter to more than 30 program participants and several lawsuits
brought during the period 1983-86 in the names of Kersting
corporations against Kersting program participants to collect
amounts purportedly due on promissory notes. See Dixon II, 62
T.C.M. (CCH) at 1466-1467, 1505-1506, 1991 T.C.M. (RIA), at 91-
3007 to 91-3008, 91-3048 to 91-3050. Summarized below are the
Court's findings and conclusions in Dixon II regarding the
collection lawsuits.
1. Steve Hane
In 1983, a Kersting company, Atlas Funding, commenced an
action on a $30,000 renewal primary note for a stock subscription
plan against Kersting program participant Steve Hane. The Court
noted that the Hane litigation was the only example in the record
37(...continued)
recovery was expected in the future. In 1991 the
assets on which the recovery was anticipated
disappeared because the corporation was absorbed and
ceased to exist.
Upon examination of the Alexanders' returns for 1990 and
1991, the Commissioner disallowed the claimed NOL's and fraud
loss. After the Alexanders agreed to these adjustments, the
Commissioner issued a notice of deficiency to the Alexanders
determining accuracy-related penalties attributable in part to
the disallowed losses. In Alexander v. Commissioner, T.C.
Summary 1997-80 (docket No. 8948-95S), the Court sustained the
Commissioner's determinations.
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