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WELLS, C.J., concurring: Respectfully, although I concur in
the result reached by the majority in the instant case, I wish to
express my disagreement with the majority’s application of the
economic substance doctrine. The majority rejects the alleged
business purposes underlying the formation of the disputed
partnership but then concludes that the partnership "had
sufficient substance to be recognized for tax purposes", majority
op. p. 16, because the partnership was validly formed under State
law, which altered the legal relationships between the decedent
and others.
I believe that the majority’s stated reasons for holding
that the partnership had substance misapplies the economic
substance doctrine. In cases such as ACM Pshp. v. Commissioner,
157 F.3d 231 (3d Cir. 1998), affg. in part and revg. in part on
another issue T.C. Memo. 1997-115, where the economic substance
doctrine is applied to deny income tax benefits, the doctrine is
applied regardless of the validity of the partnership under State
law. Because the majority has rejected the alleged business
purposes underlying the formation of the partnership in issue in
the instant case, a proper application of the economic substance
doctrine, if it were to apply, would ignore the partnership and
disallow the discounts for minority interest and lack of
marketability.
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