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interest in General Investment Group (GIG) partnership. GIG was
a partner in Salmon Realty partnership. Salmon Realty was one of
many partnerships which made up the Kilpatrick shelter.
Petitioner and Vida Lee (his former spouse)2 filed a joint
Federal income tax return for 1980 (1980 return) claiming
partnership losses from GIG totaling $20,705. On April 12, 1984,
respondent issued a notice of deficiency to petitioner and Vida
Lee disallowing the partnership losses of GIG. Respondent issued
similar notices of deficiency to other investors in GIG.
On July 2, 1984, with petitioner's knowledge and on behalf
of petitioner and other investors in GIG, Declan O'Donnell (Mr.
O'Donnell), an attorney, filed a petition in this Court
contesting respondent's disallowance of GIG's losses (the GIG
case). Mr. O'Donnell filed numerous other petitions on behalf of
investors in other Kilpatrick shelter partnerships contesting
respondent's disallowance of similar losses (collectively, the
civil cases).
In 1979, the Securities and Exchange Commission (SEC) began
investigating Mr. Kilpatrick and Mr. O'Donnell regarding their
promotion of interests in the Kilpatrick shelter. In 1982, in a
27-count indictment, Mr. Kilpatrick and Mr. O'Donnell were
charged with conspiracy to defraud the Internal Revenue Service
(IRS) by claiming false partnership deductions in violation of 18
2 In 1989, petitioner and Vida Lee divorced.
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