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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
case.
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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