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Kersting programs were filed in this Court. Respondent assigned
the role of Kersting project attorney to Kenneth W. McWade (Mr.
McWade), an attorney in the Internal Revenue Service (IRS)
District Counsel’s office in Honolulu, Hawaii.
The Tax Court cases generated by the Kersting project were
assigned to Judge William A. Goffe (Judge Goffe) for disposition.
Mr. Kersting took an active role in opposing respondent’s
enforcement activities against his tax shelter programs. In a
letter dated March 1, 1985, Mr. Kersting informed Kersting
program participants that he had retained attorney Brian Seery
(Mr. Seery) to represent them in the Tax Court at no charge.
After Mr. Seery entered his appearance in many of the Kersting
project cases in this Court, he and Mr. McWade discussed
settlement options for the cases, as well as procedures for
trying them.
Respondent’s Pretrial Settlement Offer
During 1982 through 1986, respondent had in effect an
official settlement offer for the Kersting tax shelter programs.
The offer permitted the participants to resolve their cases by
agreeing to pay deficiencies that averaged 7 percent less than
those determined in their deficiency notices. The 7-percent
reduction of the deficiencies reflected a deduction equal to an
average of the participants’ actual out-of-pocket expenses in
approximately 25 Kersting project cases. From respondent’s
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