Hoyt W. and Barbara D. Young, et al. - Page 5

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          (Kersting) during the late 1970s through the 1980s.  Under the              
          test case procedure, nontest case petitioners in more than 1,000            
          docketed cases entered into “piggyback” agreements in which they            
          agreed that their cases would be resolved in accordance with the            
          outcome of the test cases.2                                                 
               The test cases initially consisted of 14 docketed cases of             
          eight petitioners, six of whom (including the Youngs) were                  
          represented by Izen at trial.  Kersting, who had retained Izen to           
          represent those six test case petitioners, initially paid Izen’s            
          fees, either directly or through alter ego corporations.                    
               Following a 3-week trial, the Court sustained virtually all            
          of respondent's determinations in each of the test cases.  See              
          Dixon v. Commissioner, T.C. Memo. 1991-614 (Dixon II).3  However,           
          on June 9, 1992, respondent notified the Court that respondent’s            
          management had just discovered that, prior to the trial of the              
          test cases, respondent's trial attorney, Kenneth W. McWade, and             
          McWade’s supervisor, Honolulu District Counsel William A. Sims,             

          2 Upon the final disposition of the test cases, the                         
          relatively few nontest case petitioners who did not enter into              
          piggyback agreements will generally be ordered to show cause why            
          their cases should not be decided in the same manner as the test            
          cases.  See, e.g., Lombardo v. Commissioner, 99 T.C. 342, 343               
          (1992), affd. on other grounds sub nom. Davies v. Commissioner,             
          68 F.3d 1129 (9th Cir. 1995).                                               
          3 Prior to the trial of the test cases, the Court had issued                
          an opinion rejecting the test case petitioners' arguments that              
          certain evidence should be suppressed and that the burden of                
          proof should be shifted to respondent.  See Dixon v.                        
          Commissioner, 90 T.C. 237 (1988) (Dixon I).                                 

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