Jerry and Patricia A. Dixon, et al. - Page 7

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          attorneys in the trial of the test cases did not constitute a               
          structural defect in the trial but rather resulted in harmless              
          error.  See Dixon v. Commissioner, T.C. Memo. 1999-101 (Dixon               
          III).  However, the Court imposed sanctions against respondent,             
          holding that Kersting program participants who had not had final            
          decisions entered in their cases would be relieved of liability             
          for (1) the interest component of the addition to tax for                   
          negligence under former section 6653(a), and (2) the incremental            
          interest attributable to the increased rate prescribed in former            
          section 6621(c).                                                            
               After the issuance of Dixon III, the remaining test case               
          petitioners, all of whom were still represented by Izen, and some           
          of the participating nontest case petitioners filed motions for             
          attorney’s fees and costs (the initial fee requests), relying               
          primarily on sections 7430 and 6673.  The Court ordered the                 
          movants to submit documentation pertaining to fees and expenses             
          incurred commencing June 10, 1992 (i.e., the day after the Court            
          learned of the misconduct by the Government attorneys).  In Dixon           
          v. Commissioner, T.C. Memo. 2000-116 (Dixon IV), the Court                  
          rejected the initial fee requests insofar as they relied on                 
          section 7430, on the ground that the movants had not                        
          substantially prevailed on the merits as required by section                
          7430(c)(4)(A)(i).  However, the Court awarded a portion of the              
          claimed fees and expenses under section 6673(a)(2)(B) (relating             

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