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The Court of Appeals vacated this Court’s decisions in the test
cases and remanded them for “an evidentiary hearing to determine
the full extent of the admitted wrong done by the government
trial lawyers.” Id. In response to the direction of the Court
of Appeals to consider on the merits all motions of intervention
filed by interested parties, this Court ordered that the cases of
10 nontest case petitioners (hereafter, the participating nontest
case petitioners), including the Adairs and the four Jones
petitioners,4 be consolidated with the remaining test cases for
purposes of the evidentiary hearing.
On the basis of the record developed at the evidentiary
hearing, the Court held that the misconduct of the Government
attorneys in the trial of the test cases did not cause a
structural defect in the trial but rather resulted in harmless
error. See Dixon v. Commissioner, T.C. Memo. 1999-101 (Dixon
III). However, the Court imposed sanctions against respondent,
holding that Kersting program participants who had not had final
decisions entered in their cases would be relieved of liability
for (1) the interest component of the addition to tax for
negligence under former section 6653(a), and (2) the incremental
interest attributable to the increased rate prescribed in former
section 6621(c).
4 The remaining five participating nontest case petitioners
have been represented by Robert Patrick Sticht (Sticht).
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Last modified: May 25, 2011