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Background
A complete copy of the statutory notice of deficiency is not
a part of the record in this case. Based upon the pleadings, we
find that the deficiencies, additions to tax, and the increased
rate of interest on underpayments of tax due to tax motivated
transactions result from deductions and credits taken by
petitioners as flow-through items from the 1981 partnership year
of "Carrington Equipment Associates".4
Petitioners argue that the issues in the present case were
settled and the taxes paid under prior agreements with the
Internal Revenue Service (IRS). Respondent's answer to
petitioners' argument is that any prior settlements with
petitioners covered matters other than those raised by the notice
of deficiency in this case.
The parties submitted as evidence at trial copies of 3 Forms
870-L(AD), "Settlement Agreement For Partnership Adjustments And
Affected Items". Each agreement is signed by petitioners and
dated January 2, 1990. The three settlement agreements relate
to: (a) "Barrister Equipment Associates, Series 83", for
partnership tax year 1982; (b) "Carrington Equipment Associates"
4Paragraph 4(a) of the petition alleges that "All investment
tax credits were disallowed on Carrington Equipment Associates"
and should have been allowed. Paragraph 5 of the petition
alleges, and respondent admits in her answer that "It is our
information that this case is being tried under a test case on
the 1981 partnership of Carrington Equipment Associates".
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Last modified: May 25, 2011