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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.
Background3
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
232(a)(2).
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
cases.
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Last modified: May 25, 2011