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In Dixon V, the Court of Appeals considered the misconduct
of respondent’s attorneys in the test cases, determined that the
misconduct constituted fraud on the court, and formulated the
appropriate sanction. The Court of Appeals then mandated that
this Court enter decisions in these cases on “terms equivalent to
those provided in the settlement agreement with [the Thompsons]
and the IRS”. Dixon v. Commissioner, 316 F.3d at 1047. We must
therefore consider whether the issue of respondent’s alleged
continued misconduct following the trial of the test cases was
addressed and disposed of in a prior proceeding so that the Dixon
V mandates foreclosed further inquiry into that subject. See
Sprague v. Ticonic Natl. Bank, 307 U.S. 161, 164 (1939).
In DuFresne v. Commissioner, 26 F.3d at 107, the Court of
Appeals required the Tax Court to “conduct an evidentiary hearing
to determine the full extent of the admitted wrong done by the
government trial lawyers.” During the course of the evidentiary
hearing required by the Court of Appeals in DuFresne, Izen sought
discovery of documents regarding respondent’s conduct following
the trial of the test cases, alleging that respondent attempted
to “cover up” the fraudulent conduct of the Government attorneys
in the test cases. Following the evidentiary hearing mandated by
DuFresne, this Court issued two opinions, Dixon III and Dixon IV,
addressing sanctions against respondent.
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