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1984, the Thompsons filed a pro se petition in this Court seeking
a redetermination of the asserted deficiency.
On March 1, 1985, Kersting sent a letter to Kersting program
participants stating that he had retained attorney Brian Seery
(Seery) to represent them in the Tax Court at no charge to
individual petitioners. The letter requested that each Kersting
program participant provide written authorization for Seery’s
representation.11 Seery’s compensation for legal services
rendered to Kersting program participants was always paid by one
of Kersting’s alter ego corporations. On March 20, 1985, Seery
entered appearances for the Thompsons in their Tax Court cases
for their 1979 and 1980 taxable years. He also entered his
appearance for hundreds of other taxpayers.
On May 31, 1985, the Los Angeles District Director issued a
statutory notice of deficiency with respect to the Thompsons’
1981 taxable year, disallowing claimed Kersting deductions of
$80,782 and determining a deficiency in tax of $36,294.52. The
notice of deficiency also determined negligence additions against
the Thompsons under section 6653(a)(1) and (2), a late filing
addition under section 6651(a)(1), and increased interest under
section 6621(c). Respondent did not disallow the $8,000 claimed
11In a letter to program participants dated Aug. 11, 1986,
Kersting recommended that program participants not attempt to
resolve their cases on their own and instead rely on counsel he
had hired.
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