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The issues underlying the enactment of section 414(n) and
(o) have no bearing on this case. The purported employee leasing
arrangements at issue here are not the otherwise presumably valid
leasing organizations addressed in section 414(n).30 The
arrangements in the cases at hand instead fall within the
category of arrangements we have called "generic tax shelters".
See Rose v. Commissioner, 88 T.C. 386, 412-413 (1987), affd. 868
F.2d 851 (6th Cir. 1989).
Petitioners argue that modern employee leasing arrangements
have modified strict employer-employee roles. The evolution of
such arrangements, however, does not lend substance to the
activities of the lessor partnerships in the cases before us.
The parties have asked the Court to take judicial notice of
Willey, The Business of Employee Leasing (2d ed. 1988). Dr.
29(...continued)
526, whose general purpose was to treat certain leased employees
as employees of the recipient of their services for purposes of
the qualified plan requirements. H. Conf. Rept. 97-760, at 79
(1982), 1982-2 C.B. 600, 679. In 1984, Congress added sec.
414(o), Deficit Reduction Act of 1984, Pub. L. 98-369, sec.
526(d)(1), 98 Stat. 875, granting authority to the Secretary to
issue regulations deemed necessary to prevent employee leasing or
other arrangements from being used to avoid statutory employee
benefit requirements. In the Tax Reform Act of 1986, Pub. L. 99-
514, sec. 1146, 100 Stat. 2491, Congress amended sec. 414(n) to
expand further the qualified plan restrictions on the use of
leased employees.
30By a parity of reasoning, the organization and use of
Intercoastal and MIT Personnel in efforts to maximize qualified
plan benefits for Bucci and Ingemi and effectuate other business
purposes have no bearing on the issues in this case, which
concern the efforts to use the MIT partnerships to create tax
benefits for investors and Intercoastal/Machise.
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