Investment Engineers, LTD., Robert S. McGlamery, A Partner Other than the Tax Matters Partner - Page 14

                                                 - 14 -                                                   
            economic realities thereof, solely to obtain unallowable tax                                  
            benefits.”  Falsetti v. Commissioner, 85 T.C. 332, 355 (1985).                                
            We conclude here that the partnership lacked the required profit                              
            objective and that the partnership activity had no substance                                  
            beyond the attempted creation of tax benefits.                                                
                  Nothing in the record of this case explains who did what and                            
            when to justify the deductions totaling $881,500 over a 3-year                                
            period.  It cannot be determined reliably from the record how                                 
            much cash actually changed hands, because the exhibits reflect                                
            inconsistent representations by the partnership.  The                                         
            contributions reported on the limited partnership certificates do                             
            not reconcile with the terms of the partnership agreement.  The                               
            Forms 1099-MISC submitted to the Internal Revenue Service do not                              
            reconcile with the reports to the partners.  Payments in evidence                             
            primarily went from the partnership to Knox and back to the                                   
            partners.  The cash payments are a small fraction of the                                      
            deductions claimed.  The size of the payments belies the                                      
            allegation that much work was actually performed.  The only                                   
            indication that anything tangible was done are the diskettes                                  
            produced by Montelius in 1995 expressly for the purpose of being                              
            presented to the Appeals Division in an attempt to settle this                                
                  By contrast, the record contains various exhibits and                                   
            testimony suggesting that the partnership’s primary purpose was                               
            to promote the political and economic views of Knox and,                                      

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