Jerry and Patricia A. Dixon, et al. - Page 4

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          attorney’s fees and expenses under section 7430,2 originally                
          filed with the Court of Appeals in the aftermath of Dixon v.                
          Commissioner, 316 F.3d 1041 (9th Cir. 2003), revg. and remanding            
          T.C. Memo. 1999-101.                                                        
          Petitioners (the Dixons, DuFresnes, Owenses, and                            
          Hongsermeiers) are, along with one other couple--the Youngs--the            
          remaining test case petitioners in the Kersting tax shelter                 
          litigation.  That litigation arose from respondent’s disallowance           
          of interest deductions claimed by participants in various tax               
          shelter programs promoted by Henry F.K. Kersting during the late            
          1970s through the 1980s.  Under the test case procedure, most of            
          the other Kersting program participants who had filed Tax Court             
          petitions (“nontest case petitioners”) entered into “piggyback”             
          agreements in which they agreed that their cases would be                   
          resolved in accordance with the Court’s opinion in the test                 
          cases.4  Eventually, more than 300 nontest case petitioners made            

          2 Unless otherwise indicated, section references are to the                 
          Internal Revenue Code of 1986, as amended, and Rule references              
          are to the Tax Court Rules of Practice and Procedure.                       
          3 The following background statement is based on the                        
          existing record and additional information submitted by the                 
          parties in connection with the appellate fee requests.  We have             
          not found it necessary to hold an evidentiary hearing.  See Rule            
          4 Upon the final disposition of the test cases, the                         
          relatively few nontest case petitioners who did not enter into              
          piggyback agreements will generally be ordered to show cause why            
          their cases should not be decided in the same manner as the test            

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