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without such expertise. Tippin v. Commissioner, 104 T.C. 518,
534 (1995). Petitioner in this case specialized in tax shelter
planning and litigation and had over 20 years of experience. In
addition, he had litigated tax shelter cases for the IRS and
possessed extensive knowledge of tax shelters similar to those at
issue in this case.
Petitioner makes two arguments in support of his contention
that he was reasonable in taking the deductions. First,
petitioner argues that we should conclude he was not negligent,
because he researched and wrote an opinion letter analyzing the
transactions. Petitioner concluded in his opinion letter that
the deductions relating to the transactions would be permissible
under the Code. The transactions involved the circular transfer
of funds among related entities (both domestic and foreign) for
the sole purpose of generating tax deductions. In Wolverine,
Ltd. v. Commissioner, supra, we concluded that the transactions
lacked economic substance. At the time petitioner claimed the
deductions, case law uniformly indicated that transactions
lacking economic substance would not be respected for tax
purposes. See, e.g., Gregory v. Helvering, 293 U.S. 465, 469
(1935); Bercy Indus., Inc. v. Commissioner, 640 F.2d 1058, 1062
(9th Cir. 1981), revg. 70 T.C. 29 (1978). Petitioner has failed
to establish that he, as an experienced tax practitioner, was
reasonable in claiming a distributive share of the deductions
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