Jerry and Patricia A. Dixon, et al. - Page 32

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          hand, it is “not always * * * true” that trial courts “[act] on a           
          soundly reasoned basis in every tax case.”  Huckaby v. U.S. Dept.           
          of Treasury, 804 F.2d 297, 299 (5th Cir. 1986); see also Henry v.           
          Commissioner, 34 Fed. Appx. 342, 345 (9th Cir. 2002) (Court of              
          Appeals had previously “found clear error in the Tax Court’s                
          findings” on negligence issue, which “leads to the conclusion               
          that the Commissioner’s position was not substantially                      
               As noted above, respondent took the position in Dixon III              
          that the acknowledged attorney misconduct amounted to harmless              
          error, and this Court agreed.  While we would like to think that            
          we “[acted] on a soundly reasoned basis” in adopting respondent’s           
          position, the Court of Appeals in Dixon V could not have been               
          more clear in expressing and emphasizing its view that our                  
          holding in Dixon III did not have a reasonable basis in law.  The           
          Court of Appeals began by stating:  “We review the Tax Court’s              
          refusal to grant a motion vacating a judgment on the basis of               
          fraud on the court for abuse of discretion, mindful that only               
          when this Court has a ‘definite and firm conviction that the Tax            
          Court committed a clear error of judgment in the conclusion it              
          reached’ is reversal appropriate.”  Dixon v. Commissioner, 316              
          F.3d 1041, 1046 (9th Cir. 2003) (citations omitted).  The Court             
          of Appeals quickly concluded:  “Because the Tax Court applied the           
          wrong legal standard, it abused its discretion.”  Id.                       
          Specifically, “[t]he Tax Court * * * applied the wrong law when             

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