Alice M. Beagles - Page 4

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          these programs had commenced, this investigation was suspended              
          pending a criminal investigation of Swanton.  Ultimately, the               
          Department of Justice declined prosecution.                                 
               Thirty partnerships that were involved in the Swanton                  
          programs were formed prior to 1982, and 20, including Wilshire              
          West, were formed subsequent to the effective date of TEFRA.                
          Test cases for litigation of the Swanton coal programs in the Tax           
          Court were selected.  In two cases docketed in 1986, trial                  
          commenced on February 8, 1988.  A second trial began in January             
          1992.  An opinion on the merits of the Swanton coal programs for            
          years prior to the years in issue was filed October 27, 1993.               
          Both the 1988 trial and the 1992 trial involved pre-TEFRA cases.            
          After the 1992 trial was concluded, IRS lawyers began processing            
          the TEFRA cases involving the Swanton coal programs.                        
               On August 14, 1990, the IRS sent to Wilshire West and its              
          TMP, Kuehne, a Notice of Final Partnership Administrative                   
          Adjustment (FPAA).  A petition was filed in response to the FPAA            
          by Kuehne and was docketed in the Tax Court as No. 24109-90.  As            
          of the time of this opinion, decision still has not been entered            
          in the Wilshire West case because one or more of the partners has           
          pursued the litigation.  However, on April 15, 1999, a closing              
          agreement was entered into on behalf of Jackson.  The closing               
          agreement provided, in part:                                                
                    (5) The portion of the taxpayer’s deficiency for                  
               the taxable years 1983, 1984 and 1985 attributable to                  

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