- 151 -
should it be charged with the corresponding interest income or
other income reported, but not actually received as a result of
the sham transactions with the partnerships. This again is a
matter for administrative adjustment by the parties.
C. No Need To Address Other Issues
As noted above, the Court of Appeals for the Third Circuit
has recently stated that "economic substance is a prerequisite to
any Code provisions allowing deductions." United States v.
Wexler, 31 F.3d at 124 (citing Lerman v. Commissioner, supra).
Here, the parties have raised other issues, some of them highly
technical. In view of the pervasive lack of economic substance
in the transactions before us, we need not and do not address
them.
To reflect the foregoing,
An appropriate order will
be issued.
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