- 7 -
1987 840,838
1988 969,316
1989 1,335,995
3461-92 MIT 84 1986 546,300
1987 1,315,352
1988 23,889
1989 1,423,786
3462-92 MIT 86 1987 4,855,505
3551-92 MIT 83 1987 797,976
1988 360,236
1989 1,218,735
3221-93 W & A 1988 3,586,156
The cases in the foregoing dockets have been selected by the
parties as test cases that will resolve common issues in more
than 120 cases in a group identified by respondent as "Fred Bryen
Promotions". Most petitioners in the nontest cases have executed
"piggyback agreements" in which they agree with respondent to be
bound by the outcomes in the test cases.
Issues
The global issue in these consolidated cases is the tax
effect of the purported employee leasing transactions of seven
partnerships. By agreement of the parties, the questions
presented for decision are whether the transactions of the seven
partnerships had (1) economic substance and (2) a profit
objective. Because we answer those questions in the negative, we
hold that neither the partners nor the partnerships are entitled
to loss deductions for payroll costs, that the Pettisani
petitioners are not entitled to deductions for interest on
certain long-term notes, that petitioner Intercoastal Management
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