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Court. Cinema ‘84 v. Commissioner, 122 T.C. 264, 270 (2004).
Fraud on the Court is a fraud which harms the integrity of the
judicial process. Hazel-Atlas Glass Co. v. Hartford-Empire Co.,
322 U.S. 238, 245 (1944), Standard Oil Co. of California v.
United States, 429 U.S. 17 (1976). Petitioners bear a heavy
burden of establishing specific facts to show “a convincing case
of palpable fraud on the court”. Kenner v. Commissioner, 387
F.2d 689, 691 (7th Cir. 1968).
Petitioners primarily argue that Jacob and respondent’s
counsel committed a fraud on the Court by not appropriately
informing the Court that there were problems under Rule 24(g)(1)
with Jacob’s continued representation of petitioners.6 According
6 Rule 24(g) provides, in relevant part:
(g) Conflict of Interest: If any counsel of
record (1) was involved in planning or promoting a
transaction or operating an entity that is connected to
any issue in a case * * * or (3) is a potential witness
in a case, then such counsel must either secure the
informed consent of the client (but only as to items
(1) and (2)); withdraw from the case; or take whatever
other steps are necessary to obviate a conflict of
interest or other violation of the ABA Model Rules of
Professional Conduct, and particularly Rules 1.7, 1.8,
and 3.7 thereof. * * *
This Rule became effective, as Rule 24(f), on July 1, 1990. It
was subsequently redesignated Rule 24(g) in an amendment which
became effective on Aug. 1, 1998. When the Court adopted Rule
24(f), the precursor to Rule 24(g), we noted:
Paragraph (f) of Rule 24 is new. It has been
added because the Court is concerned about the
integrity of its decisions. All too frequently a
(continued...)
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