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periodic and/or lump sum contributions to a fund (hereafter, the
“Defense Fund” or “Fund”) created to share the cost of the test
case litigation.5
Following a 3-week trial, the Court sustained virtually all
of respondent’s determinations in each of the test cases. See
Dixon v. Commissioner, T.C. Memo. 1991-614 (Dixon II).6 Shortly
thereafter, on June 9, 1992, respondent notified the Court that,
prior to the trial of the test cases, respondent’s trial
attorney, Kenneth W. McWade (McWade), and his supervisor,
Honolulu District Counsel William A. Sims (Sims), had entered
into contingent settlement agreements with two of the test case
petitioners (the Thompsons and the Cravenses) and had failed to
disclose those agreements to their superiors, to the Court, or to
the other test case petitioners or their counsel. Respondent
asked the Court to conduct an evidentiary hearing to determine
whether the undisclosed agreements had affected the trial of the
test cases or the opinion of the Court. The Court denied
respondent’s request for an evidentiary hearing, entered
decisions giving effect to the Thompson and Cravens settlements,
and reentered or allowed to stand the decisions sustaining
5 The Defense Fund was initially known as the Don Belton
Legal Defense Fund and subsequently became known as the Atlas
Legal Defense Fund.
6 Prior to the trial of the test cases, the Court had issued
an opinion rejecting the test case petitioners’ arguments that
certain evidence should be suppressed and that the burden of
proof should be shifted to respondent. See Dixon v.
Commissioner, 90 T.C. 237 (1988) (Dixon I).
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