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Co. & Subsidiaries, the operator of the business for which worker
services were provided, is not entitled to deduct from its
income, ostensible accrued interest, management fees, or override
payments to the partnerships, that none of the transactions at
issue are recognized for the purpose of claiming deductions or
reporting income, and that respondent is not estopped from
asserting any of the deficiencies or proposed adjustments at
issue.
In view of these holdings, we need not answer any of a
series of more particularized substantive tax questions that the
parties posed: Whether the partnerships at issue are actually
partnerships within the meaning of the Internal Revenue Code;
whether the partnerships are employers under the Internal Revenue
Code; whether the losses claimed by petitioner partners exceed
their bases in the partnerships; whether the partners were at
risk with respect to certain notes they issued; and whether the
cash method of accounting selected by the partnerships clearly
reflected their income.
FINDINGS OF FACT
The parties have stipulated some of the facts, and the eight
sets of stipulations of fact and attached exhibits are
incorporated in this opinion.
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