William Grant Lee - Page 3




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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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