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partnerships' businesses, in comparison with the management’s
background in structuring and promoting tax shelters.
Simon v. Commissioner, 830 F.2d 499 (3d Cir. 1987); see Seaman v.
Commissioner, 84 T.C. 564, 589 (1985). Here, neither Fred nor
Bruce has demonstrated any effective knowledge of either employee
leasing or the fuel trucking industry. Fred and Bruce are,
however, experienced accountants who have extensive backgrounds
in structuring and promoting tax shelters. Their firm handled
the tax reports and filings of all parties that participated in
the employee leasing deals. We are convinced that Fred and Bruce
were selling their clients tax savings, and nothing else of
substance.
Some partners of these partnerships have testified that they
were motivated to invest by the profits offered by Machise's oil
trucking activities. However, the investors played essentially
passive roles; in determining profit motivations, we look to the
activities of Fred and Bruce, who managed the partnerships.
Moreover, in determining the existence of a profit objective, we
give greater weight to objective facts than to a taxpayer's
statement of intent. Simon v. Commissioner, supra; Thomas v.
Commissioner, 84 T.C. 1244, 1269 (1985), affd. 792 F.2d 1256 (4th
Cir. 1986); sec. 1.183-2(a), Income Tax Regs. The promoters and
partners knew enough to stress at trial their personal hopes of
great profits. Thus, while Fred urged them to "tell the truth",
he also reminded the partners that their attorney "will expect
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