Carl J.D. Bauman and Margaret A. Bauman - Page 19

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               The issue involving the economic substance of ERL’s lease              
          transaction has twice before been decided in respondent’s favor.            
          In both Coggin v. Commissioner, T.C. Memo. 1993-209, and Suivski            
          v. Commissioner, T.C. Memo. 1993-291, this Court held that ERL’s            
          lease transaction lacked economic substance and, pursuant to the            
          line of cases identified above, was to be disregarded for Federal           
          income tax purposes.  Petitioners have failed to persuade us that           
          a different outcome is now appropriate.                                     
               On brief, petitioners have expended much effort in an                  
          attempt to convince us that ERL was a legitimate entity that                
          should not be disregarded as a sham.  Despite this effort,                  
          however, we find petitioners’ argument cursory and unconvincing.            
          We agree with respondent that the majority of the offering                  
          materials consisted of information pertaining to the tax benefits           
          associated with the venture.  We also agree that such material              
          was extensive and thorough as compared to most of the remaining             
          contents of the offering materials.  The offering materials                 
          provide minimal insight as to the actual profit-making potential            
          of the  coal mining venture.  See Rose v. Commissioner, supra at            
               Petitioners contend that the offering materials focus                  
          principally on the risks rather than the benefits of the                    
          underlying investment.  We disagree.  Having carefully examined             
          the offering materials, we are convinced that such materials,               
          when collectively considered, heavily emphasize relevant tax                

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