Jerry and Patricia A. Dixon, et al. - Page 53

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          postponed for a year the accrual of interest on the first year’s            
          deficiency, thereby reducing the total interest that accrued on             
          the deficiencies.  This was accomplished by zeroing out the                 
          taxpayer’s agreed deficiency for the first year and adding it to            
          the agreed deficiency for the second year.                                  
          II. The Thompsons’ Participation in the Kersting                            
               Tax Shelters                                                           
                                                                                     
          A.        The Thompsons’ Tax Returns                                        
                    1.   Prepetition Years--1977 and 1978                             
               Although the Thompsons participated in one of Kersting’s               
          programs during 1977, they did not claim any Kersting-related               
          interest deductions on their income tax return for that year,               
          because their accountant refused to claim those deductions on the           
          return.                                                                     
               The record suggests the Thompsons first claimed Kersting               
          deductions on their 1978 tax return, which was prepared by an               
          accountant recommended by Kersting.                                         
                    2.   Years Before the Court                                       
                                        1979                                          
               The Thompsons filed their 1979 tax return, pursuant to an              
          extension, on May 29, 1980.  The Thompsons reported Kersting                
          deductions of $39,477 on that return.                                       









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