Jerry and Patricia A. Dixon, et al - Page 299




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               On March 9, 1988, Mr. Kersting issued a letter to program              
          participants characterizing Chicoine and Hallett as "scoundrels",           
          and stating that he had fired them and retained Mr. Izen to                 
          represent the test cases (excluding the Thompsons and the                   
          Cravenses).                                                                 
               By letter dated April 22, 1988, Mr. Chicoine notified                  
          Kersting program participants that the Court had ruled in the               
          Government's favor in Dixon I; he restated his support for the              
          20-percent settlement offer described in his February 9, 1988,              
          letter and revealed that, because of a disagreement with                    
          Mr. Kersting, Chicoine and Hallett would withdraw as counsel for            
          the test cases.43                                                           
               Mr. Kersting later carried out his threat to sue Chicoine              
          and Hallett for legal malpractice.  Mr. Izen served as an expert            
          witness for Mr. Kersting in his lawsuit against Chicoine and                
          Hallett.                                                                    
               By letter dated April 8, 1988, Mr. McWade notified                     
          Mr. DeCastro that, after June 15, 1988, respondent would no                 

          43  Coincidentally, on Apr. 20, 1988, Mr. DeCastro wrote a                  
          letter to a client, James Losey, expressing similar sentiments in           
          favor of settlement of the Kersting cases.  After outlining the             
          deadlines that Mr. McWade had set for the acceptance of                     
          outstanding settlement offers, Mr. DeCastro's letter states in              
          pertinent part:                                                             
                    There is now an urgent need for your friends and                  
               acquaintances to consult their legal counsel and                       
               seriously consider settling their case with the IRS.                   
               The evidence continues to build against the taxpayers                  
               in these cases and despite Mr. Kersting's assurances,                  
               we feel the trial will be won by the IRS.  The result                  
               would be very serious for the taxpayers.                               

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